ENTREPRENEURSHIP

ENTREPRENEURSHIP
Meaning
MEANING

EVERYTHING STARTS WITH ENTREPRENEUR’S MIND SET

3
MEANING

ENTREPRENEUR These are the individuals who identify

(Creator of business) opportunity, assess it and exploit it
– A person (with capacity and willingness) to

- Start
- Organise
- Manage

an
ENTERPRISE Entrepreneur acts as a Manager:

Usually with • who oversee the launch and growth of an

Considerable INITIATIVE and HIGH RISK
to get REWARD
enterprise
• Who identify business opportunity – talks about
ideas
• Deploy necessary resources
• Who takes risk for reward
• Who goes beyond the conventional thinking

4
MEANING

5
MEANING

Entrepreneur starts at this Aspire to reach this level

stage

6
How to Start ?
How to Start

Project Selection – its all about an idea & planning

Technology & Machinery Planning

phase

Arranging Finance

Registration of Entity

Execution
phase
Clearances, approvals and various registrations

And the show

Operations starts
8
Generate & Evaluate
Business Idea
Generate & Evaluate Business Idea

Observe Seek problems Combination

Innovate Creativity Discuss and take opinions

10
Generate & Evaluate Business Idea
TECHNIQUES
Funnelling of ideas

Idea
Idea 1
2
Idea
3

Feasible Ideas

11
Generate & Evaluate Business Idea

• How the idea is different? • Team not qualified or not

SWOT analysis available
• What is the competitive
• Revenue loopholes
advantage? • Inexperience
• Human resource available • Funds shortage
• Information available • Existing player in the market

Strengths Weaknesses

Opportunities Threats

• New product/market
• No competitors • Competitors
• New Govt. Policy • Copy of ideas
• Problem solving • Funds shortage
• Geographical location etc • Change in Govt. Policy

12
Generate & Evaluate Business Idea

Risk Analysis

TYPE OF RISK MITIGATION OF RISK

Operational Risk -

Financial Risk -

Environment Risk -

Competitor Risk -

Other Risk -

13
Generate & Evaluate Business Idea

Other Methods

Environmental Analysis Market Research

Brain Storming

In case of conventional
Failure Analysis
business, consult business
players

14
Generate & Evaluate Business Idea

15
 Business Plan

1. Travel Agency
2. Inbound Tour Operator
3. Tourist Transport Operator
4. Adventure Tour Operator
5. Domestic Tour Operator
6. Hotel & Restaurants
What’s Next ? – How to start

Operational
Financial Human
Marketing Strategy Organisational
Resource
Strategy Strategy Strategy
(Life line) Strategy
Revenues & expenses

17
Nature of business
&
Types of Entities
Nature of Business

Manufacturing Trading Service

Raw Materiel –
Purchase and Selling of
Conversion – Final Providing Services
Products
Product

Purchasing and selling

Manufacturing cloths Consulting
cloths

19
Type of Entities

• Sole Proprietorship
• Partnership Firm
• Limited Liability Partnership
• Company – Private, Public, OPC

20
Type of Entities

• More than one person required

• Suitable for small business
• Unlimited Liability of Partners
Proprietorship

• More than one person required

Partnership • Registration Under LLP Act , 2008
• Suitable for professionals
• Limited liability of partners

Limited
• Registration not required Liability
• Single Owner Partnership
• Small Investment required
• Suitable for small business
• Unlimited Liability of the owner

Private Limited
Company

• Minimum two individuals required

• Registration Under Companies Act, 2013
• Limited Liability of owners
• Suitable for Large business

21
Proprietorship

Que: What is Proprietorship?

 It is a type of business form which is owned and run by a What is a Liability?
SINGLE PERSON and there is NO LEGAL DIFFERENCE Legal responsibility /obligation towards
something.
between owner and the business .

Que: Any registration required for Proprietorship? What is Unlimited Liability ?

 No formal registration is required under any law, however, Indefinite extent of liability to pay off
registration is required with sales tax deptt. or service tax firm’s debts and obligations.
deptt. whichever is applicable.
Example: in case of payments to
Que: What are the benefits? creditors, personal assets of the
 It can be formed easily owners can be utilised.
 Single control Thus, owner’s personal assets are
 Single Decision making
at risk.
 No extra cost for running business
What is Limited Liability?
Que: What are the limitations of Sole proprietorship ? Person’s liability is limited to a fixed
 The liability (obligation ) of the owner will be Unlimited sum.
 Not suitable for large business (Personal assets of the owner are
 Low access to investment in the business from outsiders
safe)

No different PAN
22
Partnership

Que: What is Partnership ? Max Partners

 Association of TWO or more persons Min Partners Twenty (20)
Two (2)
Sharing of profits & losses Ten (10) in case of
banking business
 Business may be carried on by all or anyone of them acting
for all. COMPLIANCE
To follow the rules, laws, legal
Que: What are the benefits of Partnership?
regulations etc.
 Easy to set up : Quick way to commence business.
 Low costs of formation DISSOLUTION
 No formal Compliance under Partnership Act . Ceasing to carry on the business and
closing the firm
 Audit required only under Income Tax Act, 1961.
 Dissolution is easy.
PARTNERSHIP DEED
It is a documents in which terms of
Que: What are the limitations of Partnership? partnership (rights, obligation, duties,
 Liability is unlimited (explained in previous slide) profit & loss sharing etc.), are written
and agreed by the partners.
 Not a saleable form of business organization
 Cannot file a suit against anybody (unless registered) It is the principal document of any
partnership firm. However, it is not
 Each partner is an agent for the partnership business: compulsory to get the deed registered.
decisions made by any partner bind all the partners

23
Limited Liability Partnership

Que: What is Limited Liability Partnership ? LLP

 Hybrid version of private limited company and a partnership
firm
 Organized form of Partnership firm with Limited Liability. Private
Partnership Limited
Company

Que: What are the benefits of LLP ?

 Low cost of formation. CAPITAL
 Easy to establish, manage & run Amount invested for starting a
 Less Compliance business.
 No Audit requirement: upto Capital contribution of Rs. 25 It can be in the form of money,
lakh or turnover of Rs. 40 lakh. assets or any other form.

LLP AGREEMENT
Que: What are the limitations of LLP ?
 Any act of the partner without the consent of the other partner It is same as Partnership Deed.
(already explained in previous slide)
binds the LLP.
 Liability extend to personal assets under some cases e.g. fraud
case. Min Partners Max Partners
 Cannot raise money from outsiders without diluting control. Two (2) No limit

24
Private Limited Company

Que: What is Private (Pvt) Limited Company ?

 Registered business form in which owners liability is limited
 At least 2 persons are required to form a Company
 It is registered with Registrar of Companies (ROC)
WHAT IS A SHARE/SHARE CAPITAL?
The capital of the company is divided into small units.
The units are called Shares. The capital can be
divided into any number of shares of fixed amount.

Example: Capital of a company is Rs. 1,00,000

Value of one share is Rs. 10.
Therefore, number of shares will be 10,000
Que: What are the benefits of a Pvt. Limited Company ?
 Separate legal existence of the Company
 Limited liability (explained in the previous slides) AUTHORISED CAPITAL
PAID-UP
CAPITAL
Maximum amount of
 Suitable for comparatively larger business capital that company can
It is the amount paid by
the shareholder against the
raise by issue of shares. shares issued.

Memorandum of Association (MOA): is a principal

Que: What are the limitations of a Pvt. Limited Company ? document of a Company. It states the name, objectives,
Authorised share capital etc. A Company cannot do
 Not allowed to invite public to subscribe its shares. anything which is not written in MOA

Article of Association(AOA): contains the purpose of

the company as well as the duties and responsibility of the
members and directors.

25
Comparison

S. No Basis Partnership LLP Company

Indian Partnership Act, Limited Liability

1 Governing Law Companies Act, 2013
1932 Partnership Act, 2008

2 Liability Unlimited Limited Liability Limited Liability

3 Registration Optional Mandatory Mandatory

Only Registered
4 Legal Proceedings Partnership can sue third Can sue and be sued Can sue and be sued.
party.

Charter
5 Partnership Deed LLP Agreement MOA and AOA
Document

Min.-2 Min.-2 members

Max- 20 Min -2
6 Members required
(Max: 10, in case of Banking Max. - no limitation
Business)
Max - 200

26
Comparison

S. No Basis Partnership LLP Company

Foreign Can not form partnership

7 Can be a Partner Can be a member
Participation firm in India

LLP having turnover

Required as per income Companies are required
above Rs. 40 Lakhs or
8 Audit of Accounts tax act when turnover to get their accounts
contribution Rs. 25
exceed 1 Crore. audited annually
Lakhs requires audit

Transfer/ In Regulation are

Ownership is
9 heritance Of Not Transferable. governed by LLP
transferable
Rights Agreement

As per Partnership As per the terms of LLP As per AOA and the
10 Voting Rights
agreement/deed. Agreement Companies Act, 2013

27
Registration Process

1. Registration Process for a Partnership Firm

Preparing Partnership Deed

Executing and notarising the deed

Apply for registration with SDM or Sub- registrar

Get the Partnership Deed registered

28
Registration Process

2. Registration Process for a LLP

Getting Director’s Identification Number (DIN) for proposed partners

Applying for name approval

Applying for registration of LLP and getting certificate

Preparing Partnership Deed

Filing Partnership Deed

29
Registration Process

3. Registration Process for a company

Obtaining Director’s Identification Number (DIN) for proposed directors

Applying for name approval

Preparing MOA & AOA, Declaration, affidavits and other documents

Apply for incorporation

Getting Certificate of Incorporation

30
Compliance & Maintenance

Compliance & Maintenance

Others

Special Events
- Director Appointment
Regular Compliance
- Change in Objectives
of Business
- Return Filings (Tax & Yearly Compliance
Corporate) - Annual Return
- Minutes Preparation - Tax Audit
GST Returns

31
Suitability of
Organisation
Suitability of Organisation

Factors To be considered while planning

Future business plans

Availability of Funds &
Other factors

To avail benefits under

No. of individuals various schemes &
tenders

Type of Business To avoid compliance For seeking investment Requirement under law

33
What’s next ?
How to Start
What’s Next ? – How to start

Registrations & Approvals

Covered in subsequent slides

35
What’s Next ? – How to start

Operations
Improve
Increase your idea
Control Revenue (Necessary)
Deviations (Cannot be ignored)
expenses
from Plan (Crucial)
(Unavoidable)

HIRE A GOOD
CONSULTANT

Analyse
Check
Business
Compliance
(Legal, commercial Aware of Financial Environment
& financial) Competitors management (Important to
(To safeguard (Reason for most sustain)
yourself) failures)

36
Business Plan
Preparation
What’s Next ? – How to start
• To select target markets
• To finalise marketing budget • To set organisation structure
• To finalise channels of • To setup various designations
marketing • To decide various roles
• Discounts and promotion etc. • Others

Operational
Financial Human
Marketing Strategy Organisational
Resource
Strategy Strategy Strategy
(Life line) Strategy
Revenues & expenses

• To assess funding requirements • To plan human

• To avoid overutilization and
underutilisation of funds
• To raise funds on time
• To raise optimum funds
• Sources of funds
• To make budgets
resource in advance
• To finalise most efficient process of business • Requirement in future
• Create a flowchart • Avoid overstaffing &
• To increase revenue & to lower expenses. understaffing
• Avoid unnecessary expenses - office etc.
• Ways to improve revenue

38
Business Plan Preparation

PREPARE A COMPREHENSIVE PLAN

Short Term Plan Financial Plan

Long Term Plan Operational & Marketing Plan

Investment Plan Way forward

39
Content of Business Plan

 Executive Summary
 Entity Description
 Management Team
 Market Analysis
 Marketing Strategy
 Operations
 Financials & Investment Analysis
 Financial Projections
 SWOT Analysis
 Risk & Mitigation
 Annexure

40
Funding & Arranging
Finance
Sources of Funds

Sources of Funds

Equity Debt
(Banks, NBFCs,
(Find an investor) Institutions)

42
Licenses & Registrations

Licenses and Registrations

Others
(as per industry in which
GST
entity is operating)
Eg – Food FSSAI, RERA

Intellectual Property Udyog Aadhaar Income Tax Travel Trade

Rights (PAN, TAN)
(Trademarks etc.)
MSME Registration Operator

43
Introduction

As per MSME development Act, 2006, an enterprise is termed as MSME/SSI if it satisfies following criteria:

Classification Manufacturing concern Service concern

Investment in Plant & Machinery/ Equipment

Micro Rs. 25 Lakhs Rs. 10 Lakhs

Small Rs. 5 Crore Rs. 2 Crore

Medium Rs 10 Crore Rs 5 Crore

44
Support System
Support System

Government Initiatives

Institutional Support

Training & Development

46
Government Schemes
Government Schemes

Other Schemes

48
Questions
 THANK YOU

305, Building No - 32-A, Opp. Una Enclave, Mayur Vihar -1, New Delhi - 110091|
Mob: +91 9871 555 311
W: www.knovalt.com | E: rajat@knovalt.com |
Facebook: http://facebook.com/rajat.khaneja