In an era where people are trying to be job creators rather than job seekers, students are familiarized with the basic concepts of entrepreneurship through the foundational discipline of Business Studies. There are various interesting chapters of business studies class 11 syllabus which meticulously cover the intricate elements of starting a new business and understanding each and every component of enterpreneurship. The 9th chapter Small Business and Entrepreneurship encompasses the process followed for establishing small businesses. It also equips students with the knowledge of the building blocks that one needs to be a successful entrepreneur. This blog summarises the chapter on Small Business and Entrepreneurship covering its major pointers and concepts.
This Blog Includes:
Entrepreneurship and Small Business Management
The chapter starts with a story set in the backdrop of a city in Manipur. Khumbongmayum Dhanachandra Singh was the son of a poor tailor who couldn’t afford much education. The sole skill he possessed to earn a living was tailoring. But, even that couldn’t fetch him much. One day an accident happened which changed his life for the better. He stitched a beautifully designed purse from scratch which became popular. Slowly, his life changed and thus, lead to the foundation of the ‘Romi Bags’. The story simply conveys that sometimes it takes the simplest and tiniest business idea to create a successful entrepreneur.
What is a Small Business?
Before understanding the basics of entrepreneurship, let’s first explore the meaning of a Small Business. The definition of small business is determined on the basis of investment in plant and machinery. There are small business units in both the manufacturing sector as well as the service sector. Here are the three main categories of small businesses:
|Micro||Investment in Plant and Machinery up to ₹25 Lakh||Investment in equipment up to ₹10 Lakh|
|Small||Investment in Plant and Machinery up to ₹5 Crore||Investment in equipment up to ₹2 Crore|
|Medium||Investment in Plant and Machinery up to ₹10 Crore||Investment in equipment up to ₹5 Crore|
The other categories of small businesses include village industries and cottage industries.
Roles of Small Business in India
As derived from the chapter on small business and entrepreneurship, here are some of the major roles played by small businesses in India:
- Balanced Regional Development
- Employers of Human resources after agriculture
- Varieties of Products
- Optimum Utilization of Local Resources
- Employment Opportunities
- Minimal Production Cost
- Quick Decision-making Process
Apart from these benefit, small businesses also face several issues in finding a stronghold and some of these obstacles include:
- Finding the Proper Source of Finance
- Availability of Raw Materials
- Lack of Skilled Labourers
- Poor Technology
- Inability to Compete with Global Products
- Inefficient Marketing of Goods
- Increased Operating Costs
- Not Adhering to Quality Standards
Government Assistance to Small Business Units
There are several ways in which the government renders assistance to small business units. Being a major contributor to regional development and economy as well as for export/import, the Government pays them back with various amenities like infrastructure, training, raw materials, and marketing. According to the chapter on Small Business and Entrepreneurship, some of the major Indian governmental organizations like NABARD, RSBDC, DIC, NSIC, RWED, SFURTI function for the betterment of small business development.
Characteristics of an Entrepreneur
Entrepreneurship is the process of setting up your business in a way that is distinct from others. It is a legal activity combined with innovation and systematic planning. It is the essence of delivering value to customers in return for the profits reaped. The entrepreneur is the sole risk bearer of their actions. Proper knowledge of the business is a vital element for any entrepreneur. Businesses for entrepreneurs may differ according to their needs. For some, a business may be defined as a sole proprietorship whereas for some other it may be a partnership, a HUF, or even a Joint Stock company. The characteristics of entrepreneurship are as follows:
- Systematic and purposeful activity
- Legitimate activity
- Involves creativity and thinking out of the box
- Bringing together every aspect of production
- Sole risk bearer
The ‘Startup India’ campaign was officially announced in 2015 welcoming budding entrepreneurs with the best idea to come forward. It was a major step towards leveraging successful entrepreneur small business ideas. Such great talents were given financial support for the setting up of their dream enterprise and also be a better contribution to the nation. This project is aimed at creating awareness on the benefits of businesses for entrepreneurs, render support to the weaker sections of the society on coming to the front line, and to sow the seeds of an entrepreneurial culture in the society. According to the chapter on Small Business and Entrepreneurship, the Startup India program has many benefits such as legal support, easy exiting, tax exemption, etc. The various manners of funding a start-up include bootstrapping, crowdfunding, angel investment, and venture capital, etc. However, there are certain conditions as well, and they are:
- The entity must be registered in the Indian subcontinent.
- It should be incorporated for five years.
- The annual turnover of the entity shall not exceed Rs. 25 Lakh/
- The business should be based on an innovative idea.
Small Business and Entrepreneurship: Intellectual Property Rights
It is necessary to ensure you have obtained Intellectual Property Right over your business plan or idea. IPR comes in two different categories. The first categorization includes industrial design, geographical indications, and inventions. While the other categorization includes IPR on different forms of artistic works. Giving due respect to the creators of the idea ensures that they don’t suffer any loss. In our notes on small business and entrepreneurship, let us have a detailed look at them-
Copyright– Prohibition of unauthorised use of artistic, literary, and dramatic work.
Trademark– Protect the unique identity of a brand against the competitors offering similar deceptive duplicates in the market.
Geographical Indication– Denote products that have a specific geographical origin.
Patent– Protection granted by Government on inventions or already existing ideologies against sale/import/manufacture etc.
A business will only get popular and globally renowned if it survives all obstacles and dynamic changes taking place on a national and international level. Innovations help the business moving forward smoothly and provided that they are duly protected with Intellectual Property Rights; more creative brains will come forth.
Thus, we hope that this blog has been beneficial in giving you a proper outlay of the Business Studies Class 11 chapter on Small Business and Entrepreneurship. At Leverage Edu, we aim to lend you a helping hand at every step of your academic and professional journey from choosing the right course to sorting out the admission process and guiding you in making informed decisions to actualise your dream career! Sign up for a free career counselling session with us today!