question and answers of entrepreneurship

8/10/2019 Question and answers of Entrepreneurship

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1. A business man is hiring child labor to manufacture carpet to make the produce costeffective. Do you think it is an appropriate business practice to earn profit? Give reasons.

Answer: The issue of child labor in Indias hand -made carpet sector has received extensiveattention since the early 1990s. This is in large part due to the fact that India is the largestexporter of hand-made carpets in the world. It is completely unethical and illegal on the part ofbusiness man to hire child labor in order to make the produce cost effective. It is unethicalbecause this practice deprives children of their childhood. Child Labor is a hazard to a childsmental, physical, social, educational, emotional and spiritual development

All of these children are poor; low-caste or dalit peasants who are either paid a pittance fortheir efforts, or are exploited through outright bonded and forced labor. Children are especiallyprized for carpet weaving, as their nimble fingers and good eyesight are perfectly suited for theintricate motions required to weave carpets that may be 30 to 40 square feet in size, one

thread at a time.

The International Labor Organization estimates that 215 million children between the ages of 5and 17 currently work under conditions that are considered illegal, hazardous, or extremelyexploitative. Underage children work at all sorts of jobs around the world, usually because theyand their families are extremely poor.

Hiring child labor for cost effective production is not an appropriate practice for business. Indiahas various acts against child labor out which some important laws which can be applicable inthis case are described as following:

The Factories Act of 1948: according to this act, the children below of age 14 areprohibited for employment in the factory. It also has placed the rules on whom, whenand how long can pre adults aged 15-18 years be employed in any factory.

The Child Labor Act of 1956: It prohibits employment of children below the age of 14years in hazardous occupations identified in a list by the law.

The Juvenile Justice of Children Act of 2000: This law made it a crime, punishable with aprison term, for anyone to procure or employ a child in any hazardous employment or inbondage.


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Education Act of 2009: It mandates free and compulsory education to all children aged 6to 14 years. It also mandates that 25% of seats in every private school must be allocatedfor children from disadvantaged groups and physically challenged children.

According to list released by the Indian government, Carpet industry is considered as ahazardous industry. Therefore, legally a person employing a child in a carpet industry just togain profit is absolutely not an appropriate business practice, neither ethically nor legally.

2. What is the procedure for registration of small scale industry? Discuss the importance ofsmall scale industry in India?

Answer 2: The registration certificate so issued by the concerned authority is seen as a proof ofthe unit being a small scale unit. It enables the unit to get several concessions like:-

Income tax exemption and Sales tax exemption as per the State Government policy. Incentives and concessions in power tariff, etc. Price and purchase preference for goods produced. Availability of raw material depending on existing policy

Types of registrations

There are two types of registrations of small scale industries.

Provisional registration: A provisional registration is granted for the proposed enterprise. It istermed provisional because the enterprise is yet to come into existence. Provisional registrationis not compulsory for getting a permanent registration. But, a provisional certificate enables theunit to apply to the various departments and agencies for assistance in setting up of theenterprise.

Permanent registration: Once the unit has commenced commercial production, it is grantedpermanent registration. It is a life time registration given after physical inspection of theenterprise and scrutiny of certain documents.

Procedure of registration for small scale industries

The State Directorate or Commissioner of Industries or District Industries Centres (DICs) is theconcerned authorities for registration of small scale units. This registration is based on locationspecific and product specific.

A registration procedure is same for all states. However, there are may be some modificationsdone by individuals states.


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Documents required for provisional registration

1. Form Part I to be filled in by the applicant in detail which include, name of Proprietor,Name of Firm, Location of Firm, Communication Address, Main Item to beManufactured/, Total Investment, Total Value of Plant and Machinery to be installed

etc.2. Self Attested PAN Card copy of the Proprietor/ Partners/ Directors3. Self Attested Address Proof of the Proprietor/ Partners/ Directors4. PAN Card Copy of the Partnership Firm/ Company5. Partnership Deed/ MOA-AOA of the Company6. Proof of Land

Documents required for permanent registration

1. Form Part II to be filled in by the applicant in detail2. Clearance from the municipal corporation3. Copy of partnership deed/Memorandum of articles of association in case of a private

limited company4. State pollution control board clearance5. Ownership/tenancy rights of the premises where unit is located6. Sale bill of product manufactured7. Sanction from the electricity board8. Sale bill of each end product9. Purchase bill of each raw material, machinery installed10. An affidavit giving status of the unit, machinery installed, power requirement.

Importance of small scale industries in India

Small scale industries are one of the most important segments of Indian economy growth. SSI(small scale industry) contributes about 7% to the Indian GDP and providing employment toover 28 million people.

Small Scale Industries help the economy in promoting balanced development of industriesacross all the regions of the economy. Small Scale Industries are adept in distributing national

income in more efficient and equitable manner among the various participants in the process ofgood production than their medium or larger counterparts. Small Scale Industries enjoy a lot ofhelp and encouragement from the government through protecting these industries from thedirect competition of the large scale ones, provision of subsidies in the form of capital, lenienttax structure for this industry.


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SSI Sector in India creates largest employment opportunities for the Indian populace, next onlyto Agriculture. It has been estimated that 100,000 rupees of investment in fixed assets in thesmall-scale sector generates employment for four persons.

3. Define marketing plan? What is the difference between entrepreneurship andintrapreneurship?

Answer: Market means anybody of persons who are in intimate business relations and carry onextensive transactions in any commodity. Marketing is economic process by means of whichgoods and services are exchanged and their values determined in terms of money prices. It isthat phase of business activities through which human wants are satisfied by the exchange ofgoods and services. Marketing is a skill of selecting and fulfilling consumer desires in such a waythat a dose of money put in brings back maximum return.

Marketing plan : marketing plan is detailed strategy of how to do successful marketing of aproduct or products and earn projected amount of return from the effort. A completemarketing plan will consider such important elements as distribution costs, production costs,advertising expenses and any expense related to identifying and marketing the products to theconsumers in the targeted markets.

INTRAPRENEUR: intrapreneurs are employees who work within a business in an

entrepreneurial capacity, creating innovative new products and processes for the organization.An Intrapreneur is the person who focuses on innovation and creativity and who transforms adream or an idea into a profitable venture, by operating within the organizationalenvironment. Thus, Intrapreneurs are inside entrepreneurs who follow their foundersexample.

Characteristics of Intrapreneur:

They work to minimize risk in order to realize their goals Entrepreneurs are driven by a need to realize their vision, not a desire for wealth They can imagine what business and organizational realities will follow from the way

customers respond to their innovations; they can find their way from the idea toactualization.

They have vision and the courage They bridge the gap between inventors and managers; they take new ideas and turn

them into profitable realities


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ENTREPRENEUR: An entrepreneur is someone who, through his or her skills and passion,creates a business and is willing to take full accountability for its success or failure.

Entrepreneurs have many of the same character traits as leaders. Entrepreneurs are oftencontrasted with managers and administrators who are said to be more methodical and less

prone to risk-taking.

Investors are often not entrepreneurs. Investors may not possess the vision to create things orlead teams. Commission only sales people are not entrepreneurs.

Difference between entrepreneurship and intrapreneurship

INTRAPRENEURSHIP:Intrapreneurship is the practice of entrepreneurial skills and approachesby or within a company or at home. Employees, perhaps in a special project within a larger firmare supposed to behave as entrepreneurs, even though they have the resources and

capabilities of the larger firm to draw upon. Capturing a little of the dynamic nature ofentrepreneurial management(trying things until successful, learning from failures, attemptingto conserve resources, etc.) is claimed to be quite valuable in otherwise static organizations.

ENTREPRENEURSHIP: Entrepreneurship is the practice of starting new organizations orrevitalizing mature organizations, particularly new businesses generally in response toidentified opportunities. Entrepreneurship is often a difficult undertaking, as a vast majority ofnew businesses fail. Entrepreneurial activities are substantially different depending on the typeof organization that is being started. Entrepreneurship ranges in scale from solo projects (eveninvolving the entrepreneur only part-time) to major undertakings creating many jobopportunities.

4. Define the term entrepreneur. Exemplify the meaning and concept of entrepreneur?

Answer: Entrepreneur: The term entrepreneur has been defined as one who detects andevaluates a new situation in his environment and directs the making of such adjustments in theeconomic system as he/she deems necessary. An entrepreneur is ordinarily called abusinessman. He is a person who combines capital and labour for the purpose of production.

He organizes and manages a business unit assuming the risk for profit. He is the artist of thebusiness world. She/he is a person responsible for setting up a business or an enterprise.

Entrepreneur in English is a term applied to a person who is willing to launch a new venture orenterprise and accept full responsibility for the outcome.

Entrepreneur is responsible for the operation of a business including:-


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Choice of the product Decision Market Mobilization of resources

Prices Employment of labor Extending or reducing the scope of his business

Some more characteristics / quality of an entrepreneur:-

1. Hard Work: Entrepreneurs who successfully build new enterprises possess an intense levelof strong determination and willingness to work hard. They possess a capacity to work forlong hours and in spurts of several days with less than normal amount of sleep.

2. Self Confidence: Entrepreneurs must have confidence and belief in them to achieve theirdesired objectives. They strongly believe that they can beat anyone in the field.

3. Initiative: An entrepreneur must have initiative seeking personal responsibility for actionsand use the available resources for optimization of objectives. They take full credit for thesuccess and assume full responsibility for the failure of the enterprise.

4. Optimistic: Entrepreneurs do not believe that the success or failure of a new business

venture depends mostly upon luck or fate or external uncontrollable factors. They arehighly optimistic about the success of the enterprises. They use positive knowledge tosupport their thinking. They always look at the brighter side of the situation.

5. Communication Ability: An entrepreneur must be good with the art of communication. It isthat skill through which both the sender and receiver understand each other and are beingunderstood. Entrepreneurs are required in many situations to influence customers,employees, suppliers, creditors, and government and make them think in his way and act

accordingly. An entrepreneur who can effectively communicate and convince the abovepeople will be more likely to succeed than the entrepreneur who does not.

6. Moderate Risk-Taker: An entrepreneur must be a moderate risk taker and learn fromfailures. The successful entrepreneurs are neither high risk takers, nor gamblers. They work


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us briefly understand the types of businesses: Wholesaler may be defined as the middlemenwho operate between the producers (from whom they purchase goods) and the retailers (towhom they sell goods).

Wholesaler refers to any individual or business firm selling goods in relatively large quantities tobuyers (retailers) other than the ultimate consumers. Thus the manufacturers who sell theirproducts directly to retailers may also be regarded as wholesalers. The specialized knowledgeand skill of wholesalers increases the efficiency of the distribution network. The wholesalersprovide important services and solve the problems of both the manufacturers and the retailers.

Retailing refers to all the transactions which involve sale of goods or services to the ultimateconsumers. A retailer is a middleman who procures goods from the wholesalers and sells it tothe final consumers. They form a vital link in the channel of distribution of products, neither

because without him, neither the products would sell to distant places nor would it be possiblefor consumers to buy goods of their choice in shops located nearby. They have a much strongerpersonal relationship with the consumers and deal directly with the people of varied tastes andtemperaments. They form the last link in the chain of distribution and give the final selling priceto the product. The retailers provide important services and solve the problems of themanufacturers and wholesalers on one hand and the consumers on the other hand.

Therefore, if Ill be starting a factory to produce ready -made garments, Ill have to build up my

network to expand by business. Therefore, initially Ill be recommending a retail outlet of thegarments that would be manufactured in my factory.

6. What are the barriers affecting women entrepreneurs and discuss the ways to overcomethem?

Answer: Women entrepreneurs face a series of problems right from the beginning till theenterprise functions. Being a woman itself poses various problems to a woman entrepreneur,the problems of Indian women pertain to her responsibility towards family, society and lion

work. The tradition, customs, socio cultural values, ethics, motherhood subordinates to linghusband and men, physically weak, hard work areas, feeling of insecurity, cannot be tough etcare some peculiar problems that the Indian women are coming across while they jump intoentrepreneurship. Women in rural areas have to suffer still further. They face tough resistancefrom men. They are considered as helpers. The attitude of society towards her and constraintsin which she has to live and work are not very conducive.


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The problems and constraints experienced by women entrepreneurs have resulted in restrictingthe expansion of women entrepreneurship. The major barriers encountered by womenentrepreneurs are as follows:

1. Lack of confidence: Woman generally lack confidence in their own capabilities. Havingaccepted a subordinate status for long. Even at home, members of their family dontappear to have total confidence in their abilities and on their decision making. Society ingeneral also lacks confidence in womens strength, traits and competence. This is quiteapparent in the familys reluctance to finance womens venture, bankers are reluctantto take risks on projects set up by women, and individuals are unwilling to standguarantee for loans to a woman.

2. Problems of finance and working capital: Another problem faced by womenentrepreneurs is lack of access to funds because they do not possess any tangible

security and credit in the market Since women do not enjoy right over property of anyform, they have limited access over external sources of funds. Even the members of herfamily have little confidence in the capability or the women to run a business.

Women entrepreneurs face serious problem in obtaining working capital for financingday to day operations of the enterprises, including purchase of raw materials, meetingpay rolls. The chronic shortage of working capital leaves women entrepreneursextremely vulnerable to competition and other emergencies. The complex andcomplicated procedure of bank loans, the delay in obtaining the loans and running

about involved, deter many women from establishing enterprises.

3. Social barriers: A woman has to perform her family duties irrespective of her career asa working woman or an entrepreneur. In our society more importance is given toeducating the male child as compared to the female child. This results in lack ofschooling and vocational training of women. Their lack of attaining technical skills andthereby lack of awareness or opportunities available. This adds to the constraints inestablishing enterprises by women. Even the male labor force is generally seen as notpreferring to work under a lady boss. Women entrepreneurs are not taken seriously

enough by the labor force. All this hinders women entrepreneurship.

4. Tough competition: Usually women entrepreneurs employ low technology in theprocess of production. In a market where the competition is too high, they have to fighthard to survive in the market against the organized sector and their male counterpartwho have vast experience and capacity to adopt advanced technology in managingenterprises


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5. Production Problems: Production in a manufacturing enterprise involves coordinationof a number of activities. While some of these activities are in the control of theentrepreneur, there are others over which she has little control. Improper coordination

and delay in execution of any activity cause production problems in industry. Theinability of women entrepreneurs to keep pace with the latest advances in technologyand lack or technical know-how results in high cost of technology acquisition andmachinery utilization.

6. Inefficient Marketing Arrangements : Heavy competition in the market, and their lackof mobility makes (he women entrepreneurs dependent on middlemen. For marketingtheir products, women entrepreneurs are at the mercy of middleman who pockets amajor chunk of profit. Further, women entrepreneurs also find it difficult to capture themarket and make their products popular. They lack information on the changing market.In addition, women entrepreneurs, face difficulty in collection of payments.

7. Lack of entrepreneurial aptitude: Lack of entrepreneurial aptitude is a matter ofconcern for women entrepreneurs. They have no entrepreneurial bent of mind. Evenafter attending various training programs on entrepreneur ship women entrepreneursfail to tide over the risks and troubles that may come up in an organizational working.

How to overcome above problems?

To overcome the resistance from husband and members or the family at the time ofsetting up of their venture, prospective women entrepreneurs are advised to maintaintheir cool and persistently convince them, without confronting them, regarding thebenefits of setting up of an enterprise. The woman requires having a strong will powerunder the circumstances. The inflow of money will eventually solve this problem.

Shouldering the dual responsibilities of an entrepreneur and a homemaker can beeffectively undertaken by a women entrepreneur through better time management.The members of the family can also be involved in the business, which will help insharing the burden of entrepreneurial work. Moreover, the women entrepreneur musttry to make her husband and children self-sufficient at home. With tact and diplomacy,she should solicit cooperation in running the enterprise from the family.


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A woman can set up a home-based business. By operating her business from home,women can better coordinate her household and business responsibilities.

A woman can start her business when her children are grown up enough to take care oftheir own small needs; This gives the women enough time enough to manage herenterprise.

Women must acquire education and go through confidence-building training to get ridof the traditional feeling that they are inferior to men and are dependent on men.

For marketing her products. a women entrepreneur must establish her credibility interms of quality and competitiveness of product or service. She should acquire relevanttechniques and skills to win customer's loyalty. Ecommerce businesses will also helpgreatly in this regard for publicity and advertisement, the women entrepreneur can

work on alternatives like cable TV. Pamphlets, leaflets, slide in cinema halls, banners atstrategic locations, and so on.

Workshop and seminars should be organized frequently for the officials of financial andsupport agencies and for women entrepreneurs to make their relations more cordial.

Procedures for financial assistance by banks and government organizations must besimplified. Women inspectors. if available, should be asked to inspect womenenterprises.

It has been observed that there is a tendency to project a higher value or sales,production, and profits in project reports to impress the bankers. Such a project profileis not appropriate from a financial management point of view. So, womenentrepreneurs need to undertake training in various aspects of financial management tounderstand its finer implications.

Banks and financial institutions must maintain a minimum target of loan to be disbursedto women entrepreneurs. Collateral security should be dispensed with in the case orwomen entrepreneurs because many women hardly have any property or other assets

in their name to keep as guarantee. Margin money for projects to be undertaken bywomen entrepreneurs should not exceed 10%t. Subsidies should also be given towomen entrepreneurs at the initial stage itself.

Women entrepreneurs should acquire relevant training in technology and in details ortheir plant and machinery. they should be knowledgeable about the functioning ormachines and processes. They should be more assertive with their employees. They


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should employ more women workers in their enterprises. They must undergo training inmanagement skills to handle human resources as well as training in effectivecommunication skills and practices and the legal aspects of running a business.

In the present scenario due to modernization urbanization, globalization and development ofeducation, with increasing awareness, women are now seeking gainful employment in severalfields. Women are entering into entrepreneurship even in the face of socio-cultural, economic,technical, financial, and managerial difficulties. Women entrepreneurship movement can gainmomentum by providing encouragement, appropriate awareness, and training environment.And support. This would definitely enhance socio-economic status, a pre-requisite for women'sempowerment.

7. What is business plan? List out various steps involved in preparing a business plan?What is the role of Capital market in Indias growth?

Answer: Planning is the first and the most crucial step for starting a business. A carefullycharted and meticulously designed business plan can convert a simple idea/ innovation into asuccessful business venture

A business plan is the blueprint of the step by step procedure that would be followed toconvert a business idea into a successful business venture. A business plan first of all identifiesan innovative idea, researches the eternal environment to list the opportunities and threats,identifies internal strengths and weakness, assesses the feasibility of the idea and thenallocates resources (production/ operation, finance, human resources) in the best possiblemanner to make the plan successful.

To give directions to the vision formulated by entrepreneur. To objectively evaluate the prospects of business. To monitor the progress after implementing the plan. To persuade others to join the business. To seek loans from financial institutions.

To visualize the concept in terms of market availability, organizational, operational andFinancial feasibility.

To guide the entrepreneur in the actual implementation of the plan. To identify the strengths and weakness of the plan. To identify challenges in terms of opportunities and hre.ats from the external markets.


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To clarify ideas and identify gaps in management information about their business,competitors and the market.

To identify the resources that would be required to implement the plan. To document ownership arrangements, Future prospect and projected growths of the

business venture.A plan which looks very lucrative at the First instance might actually not be when the detailsare drawn. Hence documenting the business plan is one of the early steps that anentrepreneur should take. The various steps involved in preparing a business plan are:

1. Research: Get as much information on your proposed business as possible. Talk to thosealready in business, visit the library, learn all you can from trade associations and tradepublications, conduct research on-line and find out what help is available from local and

federal government agencies.

2. Make your projections: The more you know about your business, the more accuratelyyou can make intelligent projections of sales and potential profits for the first few years.This knowledge is invaluable.

3. Capital: Money. Accept the fact that it always requi res more money than youveanticipated starting, or improving your business. Have enough working capital on hand andback-up resources just in case the new business does not prosper as you had anticipated.

4. Competition: Know thy enemy. Study your compet ition carefully; theyve been in thetrenches and have already experienced what you are about to discover. Read theirliterature. There is a reason your competitor is in business, and youd better find out whatit is and how you can turn their customers into your customers.

5. Location: If you cant go to your customer, your customer must come to you so make iteasy. Pick a prime location or invest in targeted advertising.

6. Image: What kind of public image do you want to create with your service, merchandise,quality, dcor, packaging, personnel vehicles, advertising and pricing? How does that imagecorrespond with the customer you are trying to attract?

7. Keep Records: Complete, accurate records are needed to file taxes, to properly manageyour bank accounts and most importantly, to give you guidance. Always know where yourbusiness stands financially.


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8. Professional Help: In addition to professional and confidential SCORE counseling, rely ona competent lawyer, accountant, banker and insurance broker to fulfill your businessneeds. A marketing professional in you corner may also be needed.

9. Purchasing: Knowing what, when and where to buy and how to gauge inventory canmake or break you. It allows you to conserve working capital, reduce obsolescence andmeet and beat the competition. Know what sells.

10. Profits: This is the bottom line for which you are going into business. Make sure that allexpenses are accounted for, including your own living costs, possible losses, shrinkage,unseen costs such as fringe benefits and taxes. Then add a legitimate profit to your risk. Ifthe profit does not come out right, perhaps you should rethink your idea. Make sure youconsult a SCORE counselor for guidance.

The role of capital market in Indias growth

Increased efficiency in the financial sector is expected to direct financial resources into thesectors where the productivity is the maximum. This, in turn is expected to increase the rate ofeconomic growth. Faster economic growth is then expected to reduce poverty. The linkbetween increase in income and reduction in poverty has been empirically established overmedium and long term.

The government policies have moved a substantial distance over the past five years towardsfree markets for goods and finance. Countries with better policies have significantly faster ratesof economic growth. Improvements in capital markets would provide impetus to growth. Therole or capital markets in India's development can be understood in the following way:To achieve faster economic growth, the capital market can channelize the source of finance inthe primary segment (new issues). Capital market makes two important contributions togrowth. Firstly, it signals to other providers of capital (such as banks) the prospects, andtherefore, the risk of lending to companies. Secondly, it provides opportunities for investors toseek out and invest in companies of the future.

A country like India needs to grow at B or 9 per cent a year in order to eliminate pervasivepoverty. It is difficult for the country to achieve this without better capital markets. Improvingcapital markets would have two important effects. Firstly, it would increase the quality andquantity of investment in the economy. Indian savings rates are sufficiently high to supportfaster economic growth. Better capital markets are particularly important to mobilize savingsinto more efficient Investments. Secondly, efficient and transparent capital markets can attractincreased foreign savings to India (billions of dollars a year) to finance additional investment.


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moral concepts and judgments the focus so far in this text has been on legal ethics and therules of ethics that apply to attorneys, paralegal, and others within the legal profession.The importance of business ethicsIn recent years, business ethics has received much public attention scandals in the headlines

have led to public awareness and demand for ethical business practice. An increasing numberor business leaders are recognizing the importance of sound ethical policies within theirorganizations, and they are taking steps to encourage. Ethical behavior of management andemployers at all levels of the organization.

Sound ethical practices can be crucial to the success of any business, by firms must maintaintheir Integrity and reputation in the community to continue to attract clients. Poor ethicalpractices in a law firm can create a poor reputation in the community and cause the firm to loseclients. For example, if a lawsuit was brought against a law firm for racial discrimination bysome of its employees, members of the wronged racial or ethnic group would probably be wryreluctant to engage the services of the firm.

Earlier it said that business of business is businesses. Now there is a sudden change in theslogan. In the contemporary scenario where ethics has got its due importance, the slogan hastaken the form: the business of business is ethical business. Applying ethics in business makesgood sense because it induces others to follow ethics in their behavior. Ethics is important notonly in business but also mall aspects of life. the business of a society that lacks of ethics islikely to fail sooner or bier.

Business leaders adopt sound ethical policies because it is the right thing to do and because it isin their own best interests to do so. Some specific reasons that organizations give for initiatingethics programs and encouraging good business ethics include:

It is right and moral Ethics programs lessen legal liability in the form of lawsuits against the organizations for

malpractice, product liability, or violation of federal rules and regulations Society benefits from improved business ethics Ethics programs aid in decision making Ethics programs boost employer morale Ethics programs often result in better customer relations and improved public Image


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9. Explain the journey of any successful entrepreneur and the major difficulties faced by themin their journey.

Answer: . There have been any successful entrepreneurs till date and amongst them, thatshines one of the brightest is Henry Ford, founder of Ford Motor Co.

Henry Ford was nearly 40 when he founded Ford Motor Co. in 1903. At the time, "horselesscarriages" were expensive toys available only to a wealthy few. Yet in just four decades, Ford'sinnovative vision of mass production would not only produce the first reliable, affordable"automobile for the masses," but would also spark a modern industrial revolution.

Ford's fascination with gasoline-powered automobiles began in Detroit, where he worked aschief engineer for the Edison Illuminating Co. The automobile offered the promise of a brightnew future. a future Ford wanted to part of. So in 1891, Ford began devoting his spare time tobuilding what he called the "Quadricycle"-a crude contraption that consisted of two bicyclesplaced side by side, powered by a gasoline engine. After working on the Quadricycle for nearly adecade, Ford took Detroit lumber tycoon William H. Murphy for a ride in his hand-builtautomobile. By the time the ride was over, they were in business.

The Detroit Automobile Company opened in 1899 with Ford as superintendent in charge ofproduction. But the venture only lasted a year. Ford could build a car, but he couldn't buildthem fast enough to keep the company afloat. Undaunted, Ford hatched a new plan-to build aracer. Ford saw racing as a way to spread the word about his cars and his name. Through thenotoriety generated by his racing success, Ford attracted the attention of the backers heneeded to start Ford Motor Co. in June 1903.

Ford set up shop in a converted wagon factory, hired workers, then designed and produced theModel A, the first of which he sold to a Chicago dentist in July 1903. By 1904, more than 500Model A's had been sold.

While most other automakers were building luxury-laden automobiles for the wealthy, Fordhad a different vision. His dream was to create an automobile that everyone could afford. TheModel T made this dream a reality. Simpler, more reliable and cheaper to build than the ModelA, the Model T-nicknamed the "Tin Lizzie"-went on sale in 1908 and was so successful within just a few months that Ford had to announce that the company couldn't accept any more


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orders-the factory was already swamped. Ford had succeeded in making an automobile for themasses

Major Challenge faced by Henry Ford:

1. His production facility fell short to satisfy demand of the customers

After much thinking, he finally found a solution to the problem i.e. moving assembly line.

Ford reasoned that if each worker remained in one assigned place and performed one specifictask, they could build automobiles more quickly and efficiently. To test his theory, in August1913, he dragged a chassis by rope and windlass across the floor of his Highland Park plant-andmodern mass production was born. At peak efficiency, the old system had spit out a finishedModel T in 12 and a half working hours. The new system cut that time by more than half. Ford

refined and perfected the system, and within a year it took just 93 minutes to make a car.Because of the more efficient production, Ford was able to cut hundreds of dollars off the priceof his car.

2. Doing the same task hour after hour, day after day quickly burned out his work force

The turnover rate became such a problem that the company had to hire close to 1,000 workersfor every 100 jobs it hoped to fill. To solve the problem, Ford decided to pay his employees $5per day-nearly twice the going rate. Workers flocked to Ford's gates.

3.

Fords current model started getting outdated and a change was needed, but itwouldn't come without cost. In May 1927, Ford laid off thousands of workers whilehe figured out a way to get back into the marketplace. At the age of 64 he wasstarting over. With the release of a brand new Model A, Ford came roaring back tolife. When the stock market crashed in October 1929, Ford Motor Co. was better offthan most of its competitors because of the success of his Model A.

4. Started facing stiff competition from competitors:

In 1931, the Depression caught up with Ford. After three years on the market, Model A salesfell dramatically. Chevrolet, with its new six-cylinder engine, and a new model from Plymouthcut into Ford's market share. Once again Ford was forced to shut down production and sendworkers home. To retain the left over workers, Ford had a plan. The young, humanistic idealisthad become a hardened industrialist who believed the average worker wouldn't do a day'swork unless he or she was trapped and couldn't get out of it. To ensure his workers put in a full


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day's work, Ford created the Service Department, a foreman and a group of supervisors, manyof whom were ex-cons and boxers, who ruled the plant through fear and coercion.

Therefore, ethical or unethical, Ford devised various ways to keep his company alive.

With just a small starting capital, Ford made his company a big success and is now a worldrenowned brand which has a presence in almost every country of the world.

10. Mr. X once owned a single shop in the shopping complex. Due to his skills and expertisehe is now the owner of 5 shops and earning around Rs. 50,000 from these shops on a dailybasis. Can you identify the form of business ownership in which he is running his business?Can you also list the relative merits and demerits of this form of business ownership?

Answer: According to the condition describe in the question I think Mr. X running anindependent business. It is also called Freelance business. An independent business may be abusiness, which is free from outside control. It always consists of in private ownedestablishments as critical public restricted firms, which are owned by investment shares on theexchange. In most cases, the independent businesses sometimes take the form of soleownership firms.

Merits of the Independent business

There are adequate benefits to being an independent business owner as compared to inoperation a franchise. Such benefits are:

1. Financial management - With a smaller business like independent, finances may be managedeasier because of smaller operations and fewer workers.

2. Higher client relations - Once in operation a smaller business, client relations becomeadditional valuable and sustain because the client is that the one who is primarily keeping thebusiness alive, it's crucial as an independent that the client relations are of fine volume.

3. Decision making - Decision making may be made easier in smaller operations as there is asmaller amount pressure as critical a bigger company-based business. With nearer workerrelations in addition as client relations, independents will build easier and quicker choices tolearn all.

4. Product change - An independent business will build changes in terms of product so as tolearn themselves in addition as their customers. An example of this might be a more robust line


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of product to interchange a not thus well existing line. Franchise primarily based businesses butdo not forever have this freedom as there are additional people concerned within the decision-making method.

Demerits of Independent business

Despite the numerous benefits of an independent business, there are several disadvantagesthat should be accepted. These have an effect on each the businessman in addition thepurchasers.

1. Financial risk - The financial sources needed to sustain a business may be substantial.Proprietors tent to commit most of their savings or maybe falling into debt so as to start. Ifthings dont go well, the businessman might face substantial loss. Also, theres no warranted

financial gain to start with. There may be times, particularly within the initial few years, oncethe business isnt generating enough profit for the businessman to measure on.

2. Less control over workers - Whereas workers are able to direct the outcome of the work, thebusinessman has control over the way to complete the task, together with the tools andprocesses used. you need to be willing to give up this control, one thing a number of usbusiness owners have bother doing, as a result of failing to do might mean the IRS re-classifiesyour employee as an worker and imposes penalties.

3. High commitment - Once owning an independent business, it will take time for the business

to become totally established and for it to form a adequate profit so as to fulfill the wants ofthe businessman in addition because the workers. This implies being committed to the businessin the least times so as for it to figure.

4. Competition - Independent businesses typically face competition with native independentswhich suggests having to cost agree on things so as to share custom. Generally but, custom maybe taken from one independent to a different attributable to substantial value changes, thestandard of product and additionally client service.


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11. Based on the success stories of some entrepreneurs, comment whether entrepreneurs areborn or made?

Answer: Entrepreneurs are made and are not born. There is no specific concept like bornentrepreneurs. When someone says somebody is a born entrepreneur, it is not to be taken

literally. It means the traits that favour entrepreneurship are maximized in that individual. If anentrepreneur is considered as being born with this trait, then every other single human trait canalso be considered to be born or inherent.

Thus, when an individual is born all the traits are inherent. It is only the environment,background, genetics, focus, training, practice, support systems and capitalized opportunitieswhich decide who becomes a successful entrepreneur. There will always be shades of a betterentrepreneur and a less successful entrepreneur even though both the individuals have beenexposed to the same set of factors. This again depends on the individual approach to the issue.

It may be more appropriate in cases where genetic factors may favour an individual to a certainextent, but still the trait has to be honed and practiced in order for the individual to besuccessful. E.g. A successful athlete may have a good genetic background (parents may besuccessful athletes), but if he does not practice, he is not going to be a successful athlete. Thus,entrepreneurs are made and not born.

Examples of entrepreneurs are made not born

Dhirubhai ambani a big example of an entrepreneur made! What did He have? a meager Rs.20,000 and when he Left, He was roughly estimated at around 1, 00,000 Crores. Thats howEntrepreneurs are MADE.

12. E-commerce suitable for products such as apparels and jewellery. Give reasons in supportof your answers.

Answer: Ecommerce websites have been mushrooming all over the web. These websites areno more restricted to exhibiting a certain category of products. Every product category isavailable online, starting from clothes, accessories, appliances, makeup, shoes, jewelry,

groceries, electronics, toys, sports goods and the list is endless. Among this never-ending list ofproducts sold online, which goods and services would serve as a good business opportunity foryou? Here is a list of products that always sell online, well most of the times. Understand themarket dynamics around the new products and know what could be your million-dollarbusiness prospect.


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Clothes and Apparels

Clothes, for man, woman or child are most sold products on ecommerce websites today. Thereare tons of apparel websites that sell every kind of clothing. Even wholesale apparels andclothes e-shops offer great discounts. These discounts and coupons make the clothes shopping

work out to be much cheaper than buying clothes by shopping physically. Most clothes andapparels run discounts and sales, especially for women and children clothing. To make it evenmore lucrative major retail outlets like Sears offer sears coupons that allow affordable apparelpurchases. Every price range of clothing is sold online. A particular piece of clothing can be soldat ten different prices across a host of online shops. Clothes are a basic necessity. The demandfor clothes will never drop. But yet, to enter a jam-packed market category abusiness entrepreneur can try breaking the market to find sub-categories that could be apotential market while being profit yielding at the same time.

Jewellery

This market category is primarily dedicated to women. Jewellery includes fashion jewellery andreal or fine jewellery. Starting form neckpieces, to earrings, bangles to bracelets, watches tosunshades and rings to toe rings, everything is available online across all metal bases, real oralloys. Even cufflinks and other small jewellery popularly worn by men and children areavailable online. The real market of course lies in womens jewellery. However, data andstatistics show that fashion jewellery is sold more easily online as people dont always believethe quality and reliability of the claimed fine jewellery sold online. Major trustworthy retailwebsites like Sears do manage to sell fine jewellery online. But at the same time Sears alsomakes sure to make their customers purchases are pocket friendly while buying real or fine jewellery by presenting the coveted sears promo codes. Customers are assisted in making thetough choice to opt for fine jewellery from equally good artificial jewellery options withemployment of vouchers like the sears coupon codes.

I am a user of ecommerce; i really like online shopping because we can get interactive offers ononline shopping. We can get verity of cloths and jewelleries. If they send us wrong order orwrong size of cloth there is no need to worry about, because we can replace, return orexchange our order without paying any extra money. We can pay instant with shopping card or

we can pay cash on delivery. But we cant return used product. So there are limitations andadvantages of ecommerce.
https://www.chameleonjohn.com/store/sears-coupon-codeshttps://www.chameleonjohn.com/store/sears-coupon-codes


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13. Explain the Essentials of project Report what are the steps involved in preparing ofreport?Answer: A project report is a written document pertaining to any investment proposal. Itcontains relevant data, on the basis of which the project has been appraised and found relevant

to the entrepreneur. This project report can be shown to the bankers or other financialinstitutions to acquire financial assistance. The efficiency of the project is decided by otherorganizations and suppliers on the basis of the project report. It is also used by theentrepreneur to check if he is deviating from what was decided earlier.

A project report helps to understand the opportunities, problems and weakness of thebusiness. It guides the entrepreneur in actually starting up and running the business venture. Ithelps him to monitor whether the business is growing as was projected in the business plan ornot. It helps in documenting the cost estimates of the business. It can be used as a handy toolto persuade investors and financial institution to fund the project. It cans help in properutilization of all the resources. It can keep the morale of employees, owners and investors up. Itcan finally lead to a sustainable development of the organization.

Essentials of project Report

1. The project report should be sequentially arranged.2. The project report should be exhaustive (covering all the details about the proposed

project).3. The project report should not be very lengthy and subjective.4. The project report should logically and objectively explain the projections.5. The projections should be appropriately be made from two to ten years.6. The project report should be professionally made to demonstrate that the promoters

possess entrepreneurial acumen and sound experience7. The project report should also justify market prospects and demands.8. The project report should justify the financial needs and financial projections.9. The project report should be attractive to the financial agencies and investors.10. The project report should also have a high aesthetic value

Various steps involved in the preparation of a project report

1. General information: it should contain general information regarding thecompany/enterprise. The project report should also contain an analysis of the industryto which the project belongs. It should contain the past performance of the industry, the


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priority or the industry, role of the industry, change in production over a period of time,allocation or investment of funds, Choice of technique, etc.

2. Preliminary Analysis of Alternatives: the report should next present data on the gapbetween demand and supply for the outputs which are to be produced, data on the

capacity that would to be available from the projects are in production or underimplementation at the time the report is prepared. a complete list or all existing plantsin the industry, giving their capacity and Level of production actually attained, a list or allprojects for which letters or intents/licenses have been issued and a list of proposedprojects. All options that are technically feasible should be considered at thispreliminary stage. The location or the project as well as its implication should also beshown. An account of the foreign exchange requirements should also be taken. Theprofitability of different options should also be given. The rate of return on investmentshould be calculated and presented in the report. Also, the alternative cost calculations

against the returns should be presented.

3. Project Description: the project report should provide a brief description of thetechnology/process chosen for the project. Information relevant to determiningoptimality or the location chosen should also be included. To assist in the assessment ofthe environmental effects of a project, every report must present the information onspecific project. I.e. Population, water, air, land, flora and fauna, effects arising out ofproject pollution, other environmental descriptions, etc. The report should contain a listof the operational requirements of the plant, requirements or water and power.

Personnel, organizational structure envisaged. Transport costs activity-wise phasing ofconstruction and factors affecting it.

4. Marketing Plan: it should contain data on marketing plan, i.e., demand and prospectivesupply in each or the areas to be served. The methods and data used for makingestimates or domestic supply and selection of the market areas should be presented.Estimates of the degree of price sensitivity should also be shown. It should also containan analysis or past trends in prices.

5. Capital Requirement and Costs: Information on all items of costs should be carefullycollected and presented. The estimates or costs should be reasonably complete andproperly classified.

6. Operating Requirements and Costs: Operating costs are essentially those costs whichare incurred after the commencement of commercial production. Information about allitems or operating costs should be collected. Operating costs relate to the cost of raw


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materials and intermediates, fuel, utilities, labor, repair and maintenance, settingexpenses and other expenses.

7. Financial Analysis: the purpose of this analysis is to present some measures to assess thefinancial viability of the project. A Performa Balance Sheet for the project data should bepresented. Depreciation should be allowed for, on the basis specified by the Bureau ofPublic Enterprises. Foreign exchange requirements should be cleared by theDepartment or Economic Affairs. The report should take into account income-taxrebates for priority industries, incentives and subsidy for backward areas, accelerateddepreciation, etc. The report most also analyze the sensitivity or the rate of return tochanges in the level and pattern or product prices.

8. Miscellaneous Aspects: other aspects relevant to the enterprise, which is collected.Should also be included. For e.g. Cash flow statements, methods of accounting, use or

computers or any new technology used, must be specified.

9. Economic Analysis: Social profitability analysis needs some adjustment in the datarelating to the costs and returns to the enterprise. The enterprise should try to assessthe impact or its operations on foreign trade. Indirect costs and benefits should also beincluded in the report. If they cannot be quantified. They should be analyzed and theirimportance emphasized.

14. One of your friends has brought a new bike. The company claimed that the bike wouldgive an average of 50 km/l. After using the vehicle for one week, he noticed that the bikegave an average of 35 km/l which was less than the average in the claim. Do you think it wasethical on the part of the company? Why do you think so?

Answer: Most of time the automobile companies claims the more average of product in themarketing brochures of the product which much differ from the actual average of that product.The average claims by the companies are according to the ideal conditions at the particularspeed. This ideal condition for average test is very different from the actual road condition. So itis mentions in the claim brochures that fuel average can vary if the optimum driving conditionsare not achieved.

So, according to me if the company mentions the condition then it is ethical on the part of thecompany but if the company claims more average and not mentions about any conditions thenit very unethical on the companys part to pl ay such trick to sell their product.


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The group should be able to priorities the loan applications, fix repayment schedules, fixappropriate rate of interest for the loans advanced and closely monitor the repayment of theloan installments from the loaner.

The group should operate a group account preferably in their service area bank branch, so as to

deposit the balance amounts left with the groups after disbursing loans to its members.

The group should maintain simple basic records such as Minutes book, Attendance register,Loan ledger, General ledger, Cash book, Bank passbook and individual passbooks. The samplePerforma for maintenance of above records by the group is in the Annexure II for guidance.These could be used with necessary changes/ modifications wherever required.

Objectives of Self Help Groups

The SHGs comprise very poor people who do not have access to formal financial institutions.

They act as the forum for the members to provide space and support to each other. It alsoenables the members to learn to cooperate and work in a group environment. The SHGsprovide savings mechanism, which suits the needs of the members. It also provides a costeffective delivery mechanism for small credit to its members. The SHGs significantly contributeto the empowerment of poor women.

Advantages of Self-Help Groups

The advantages of SHGs are: Low transaction cost; Effectiveness in supervision; Easy credit delivery to the poor; Minimum procedures; and, Better recycling of funds.

16. Discuss break even analysis and its importance in assessing the financial viability of aproject?

Answer: Break-even analysis shows the relationship between costs and profits with the salesvolume. It determines the activity where total cost is equal to total sales i.e. point of zero profitand zero loss. It can be used mo determine probable profits at any level of activity.

Mathematical calculation of break-even analysis

Break-even point (Rs) = Fixed cost/ P/V ratio


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Break-even pint (units) = Fixed cost/ Contribution per unit

P/V Ratio = Contribution*100/ Net sales

Contribution = sales- Marginal cost

Margin of safety = Actual sales revenue-Break=even sales revenue

Margin of safety ratio = Margin of safety/ Actual sales (Rs)

Profit = Margin of safety * P/V Ratio

Importance of break even analysis in assessing the financial viability of a project:

1. It measures profit and loss at different levels of sales.2. It helps to predict the effect of changes in price of sales.3. It helps to analyze the relationship between fixed cost and variable cost4. It also helps to predict the effect on profitability if changes in cost and efficiency.

17. Write the importance of foreign trade in economic development of a country?

Answer: Foreign trade of India is the trade between residents of India and residents of othercountries of the world. For example trade between India and United States is calledInternational trade or foreign trade. The goods consigned from India to other countries will beknown as Indias Exports on the other hand goods coming from other countries to India will becalled as Indias Imports.

Importance of foreign trade

Foreign trade plays a significant role in the economy of each country. In the words ofRobertson, foreign Trade is an engine of economy growth. Foreign trade helps a country toutilize its natural resources and to export its surplus production. It can import technical know-how. At the time of natural calamity it can import food grains and other goods from abroad. A

country can industrialize itself by importing necessary capital. Machines and raw materials frommore advanced and industrialized nation. By proper control of foreign trade, employment,output, prices, industrialization and economic development of the country can be influencedfavorably. It is again foreign trade that enables a country to acquire necessary assistance andother equipments for its economic development from abroad. That is the reason why Planning


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Commission of India has given great importance to the development of foreign trade In the FiveYear Plans.

Beneficial effects of foreign trade on economic development

Foreign trade helps in breaking vicious circle of poverty: Underdeveloped countries arecharacterized by the existence of vicious circle of poverty. In other words, low income accountsfor deficiency or demand and lack of demand accounts for low supply and low supply in its turnaccounts for low income. Trade enables underdeveloped countries to produce more of thosegoods in which they enjoy greater comparative advantage. Consequently, production, incomeand employment in these countries increase leading to increase in demand. This increaseddemand is partially met by domestic production and partially by foreign imports. In this way,exports and imports or goods help break the vicious circle of poverty and accelerate the rare oreconomic development.

Inducement to invest: Rate of economic development is very slow in underdeveloped countrieson account or low demand, lack of technological improvement and shortage or social overheadcost. Investment is encouraged under the impact or international trade. Export industries areset up. New industries are installed with the help or foreign technical know-how or incollaboration with foreign companies. With the help or foreign capital and technologynecessary infrastructure, like roads, railways, power, irrigation facilities etc. is created topromote economic development. As a result or all this expected profitability of theentrepreneurs increases and they are induced to invest more. Because or increase in

investment, rate of capital formation accelerates which in turn leads to increase in the rate ofeconomic development.

Technical Progress: Trade affords opportunity to the underdeveloped countries to make use ofthe technology, innovations and latest inventions of developed countries. As a result basic andheavy industries like, iron and steel, heavy machines, ship-yards etc. are established. Use ofnew technology reduces cost of production and hence price of the finished product. Thus,production of the country has an easy access to foreign markets. As a result or it, income andemployment increase and economic development accelerate.

Important Educational Effects: Underdeveloped countries are short of efficient engineers,capable managers and competent technical experts etc. On account of trade, there is expansionor technical education and training in these countries. There is increase in the efficiency andscientific knowledge of the people.


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Import of Capital Goods and Export or Primary goods: Another advantage of foreign trade forthe economic development of underdeveloped countries is that these countries canindustrialize themselves by importing necessary capital goods like, machinery: semi-finishedproducts and industrial raw materials from industrialized developed countries. In return, they

can export primary goods and mineral resources produced in their countries and thus solve theproblem of I balance of payments. The result is that the underdeveloped countries increase thepace of their economic development by setting up direct productive activities.

18. Write short notes on

National bank for agriculture and rural development

Small industries development bank of India

Answer: National bank for agriculture and rural development

National Bank for Agriculture & Rural Development (NABARD) came into Existence on 12d July1982 by an act of parliament. Its objective is providing focused and undivided attention to thedevelopment of rural India. NABARD mission statement underscores topromote sustainable & equitable agricultural & rural prosperity through effective support,related services, institution development and other innovative initiatives.

NABARD at present has 28 regional offices at the state capitals, a sub-office at Port Blair and376 district development offices. NABARD is an apex institution accredited with all mattersconcerning policy, planning and operations in the field of credit for agriculture and othereconomic activities in rural areas. It is an apex refinancing agency for the institutions providinginvestment and production credit for promoting the various developmental activities in ruralareas. It takes measures towards institution building for improving absorptive capacity of thecredit delivery system, including monitoring, formulation of rehabilitation schemes,restructuring of credit institutions, training of personnel, etc. It Co ordinaries the rural financingactivities of all the institutions engaged in developmental work at the field level and maintains

liaison with Government of India, State Governments, Reserve Bank of India and other nationallevel institutions concerned with policy formulation. It also prepares, on annual basis, ruralcredit plans for all districts in the country; these plans form the base for annual credit plans ofall rural financial institutions. It further undertakes monitoring and evaluation of projectsrefinanced by it. It promotes research in the field of rural banking, agriculture and ruraldevelopment.


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Small industries development bank of India

The Small industries Development Bank of India was established in 1989 as a wholly ownedassociate Institution of Industrial Development Bank of India. It started functioning on 2nd April1990. It paid up capital is Rs 45o crores. The total assets of the bank are 15,299 crores. The

Reserve Funds of the bank in 2001 amounted to Rs 3.611 crores. lt collected Rs 3297 crores in20o1 by Issuing bounds and debentures.

The main objective of this bank is to provide adequate financial and non-financial aid to smallscale industries. Some of the main functions of these banks are

1. To initiate the process of modernization and technical up gradation of the present units.2. To facilitate the marketing of the products of the small scale sector in India and abroad.3. To provide special aid to labor Intensive Industries to enable they top mote employment.4. To provide refinancing, factoring, leasing services to the small sector.

In 2006-2007 the bank sanctioned loans worth Rs 11.184 crores and distributed loans worth Rs10,129 crores. The total sanctions and disbursements of this institution by the end of 2012were Rs 45,144 crores and Rs 32,987 crores respectively. SLDBI raised resources during 2002 tothe extent of Rs 323 crores from the Overseas Economic Cooperation Fund (OECF) Japan andGermany.

Recent Development

For strengthening the small scale sector, the following measure has been taken with SIDBI as

the focal Point.

1. SIDBI will finance the Stale Financial Corporations (SFC) and commercial banks formodernization projects up to Rs 5O lakh from Its Technology Development and Modificationfund Scheme.

2. SIDBI's refinance ceiling of Rs 50 Iakh For the single Window Scheme of SFCs etc. Forcomposite loans will be doubled to Rs 100 lakh.

3. SIDBI will participate In venture capital funds set up by public sector institutions as well asprivate companies up to 5o per cent of the total fund. Such a Fund must be dedicated tofinancing of small scale Industry.

4. SIDBI will provide refinance to lending institutions which are now permitted to lend of SSIunits seeking ISO certification of quality .


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