CU-MCOM-SEM-III-Entrepreneurship

land organizations. Be that as it may, numerous clinical and legitimate organizations have changed to different structures to restrict individual obligation. Prior to making an organization, the accomplices ought to become more acquainted with one another. As indicated by Michael Lee Stallard, fellow benefactor and leader of E Pluribis Partners, a counseling firm in Greenwich, Connecticut, \"The greatest mix-up colleagues make is bouncing into business prior to becoming more acquainted with one another… You should have the option to interface with feel open to stating your viewpoints, thoughts and assumptions.\" Table 7.1 Sole Proprietorships: A Summary of Characteristics Liability Taxes Advantages Disadvantages  Tax breaks  Owner absorbs all losses  Owner retains all profits  Unlimited liability Unlimited: No special taxes;  Easy to start and  Difficult to get dissolve financing owner is owner pays taxes  Management deficiencies responsible for on profits; not  Flexibility of being own boss  Lack of stability in all the debts of subject to case of injury, death, or illness the business. corporate taxes  No need to disclose business  Time demands information  Difficult to hire and  Pride of keep highly ownership motivated employees Partnership A partnership \"is a fake individual made by law, with the majority of the lawful privileges of a genuine individual. These incorporate the rights to begin and work a business, to purchase or offer property, to get cash, to sue or be sued, and to go into restricting contracts\". Enterprises make up 20% of all organizations in the United States, yet they represent very 101 CU IDOL SELF LEARNING MATERIAL (SLM)

nearly 90% of the revenue. Albeit some independent companies are consolidated, numerous organizations are amazingly huge organizations—for instance, Walmart, General Electric, Procter and Gamble, and Home Depot. Ongoing information show that just around one- portion of the entrepreneurs in the United States run consolidated businesses.Matthew Bandyk, \"Transforming Your Small Business into a Corporation,\" Scott Shane, creator of The Illusions of Entrepreneurship (Yale University Press, 2010), contends that independent ventures that are consolidated have a lot higher pace of achievement than sole ownerships, outflanking unincorporated private companies as far as productivity, work development, deals development, and different measures. Shane keeps up with that being consolidated may not bode well for \"minuscule organizations\" in light of the fact that the limited quantity of hazard may not merit the intricacy. Notwithstanding, Deborah Sweeney, fuse master for Intuit, dissents, saying that \"even the littlest eBay business has a danger of being sued\" in light of the fact that delivery items around the nation or the world can make legitimate issues if a shipment is lost. At last, it is the private venture being fruitful that might be the greatest factor for the proprietor to move from a sole ownership to a partnership. Table 7.2 Partnerships: A Summary of Characteristics Liability Taxes Advantages Disadvantages  Owner(s) retain all  Unlimited financial profits liability for general partners  Unlimited for general partner; limited  Interpersonal conflicts Unlimited for partners risk only their Individual original investment. general taxes on Individual taxes on  Financing limitations partner; limited business earnings; no business income taxes as a  Management partners risk deficiencies earnings; no business only their income taxes original as a business investment.  Easy to form and  Partnership dissolve terminated if one partner dies,  Greater access to withdraws, or is capital declared legally 102 CU IDOL SELF LEARNING MATERIAL (SLM)

Liability Taxes Advantages Disadvantages  No special taxes incompetent  Clear legal status  Shared decisions may lead to  Combined managerial disagreements skills  Prospective employees may be attracted to a company if given incentive to become a partner Corporation A corporation “is an artificial person created by law, with most of the legal rights of a real person. These include the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts”William M. Pride, Robert J. Hughes, and Jack R. Kapoor, Business (Boston: Houghton Mifflin, 2008), 157. (see Table 7.3 \"Corporations: A Summary of Characteristics\"). Corporations make up 20 percent of all businesses in the United States, but they account for almost 90 percent of the revenue.Jeff Madura, Introduction to Business (St. Paul, MN: Paradigm Publishers International, 2010), 150. Although some small businesses are incorporated, many corporations are extremely large businesses—for example, Walmart, General Electric, Procter & Gamble, and Home Depot. Recent data show that only about one-half of the small business owners in the United States run incorporated businesses.Matthew Bandyk, “Turning Your Small Business into a Corporation,” Scott Shane, author of The Illusions of Entrepreneurship (Yale University Press, 2010), argues that small businesses that are incorporated have a much higher rate of success than sole proprietorships, outperforming unincorporated small businesses in terms of profitability, employment growth, sales growth, and other measures. Shane maintains that being incorporated may not make sense for “tiny little businesses” because the small amount of risk may not be worth the complexity. However, Deborah Sweeney, incorporation expert for Intuit, disagrees, saying that “even the smallest eBay business has a risk of being sued” because shipping products around the country or the world can create legal problems if a shipment is lost. Ultimately, it is the small business being successful that may be the biggest factor for the owner to move from a sole proprietorship to a corporation. 103 CU IDOL SELF LEARNING MATERIAL (SLM)

Table 7.3 Corporations: A Summary of Characteristics Liability Taxes Advantages Disadvantages multiple  Limited liability  Double taxation Limited;  Skilled management  Difficult and expensive to taxation team start  Ease of raising capital  Individual stockholder has little control over operations  Easy to transfer ownership by selling  Financial disclosure stock  Lack of personal interest  Perpetual life unless managers are also stockholders  Legal-entity status  Credit limitations  Economies of large- scale operations  Government regulation and increased paperwork Limited Liability Company The restricted responsibility organization is a somewhat new type of business proprietorship that is currently allowed in every one of the fifty states, albeit the laws of each state may vary. The LLC is a mix of a sole ownership and a company: the proprietors of the LLC have restricted obligation and are burdened just a single time for the business As indicated by Carter Bishop, an educator at Suffolk University Law School, who aided draft the uniform LLC laws for a few expresses, \"There's practically no motivation behind why an independent venture should document as a company, except if the proprietors intend to take the business public sooner rather than later.\" Table 7.4 Limited Liability Companies: A Summary of Characteristics Liability Taxes Advantages Disadvantages 104 CU IDOL SELF LEARNING MATERIAL (SLM)

Liability Taxes Advantages Disadvantages  Limited liability  Taxed at individual tax  Difficult to raise money rate  No perpetual life  Shareholders can  Is dissolved at death, participate fully in withdrawal, resignation, expulsion, or bankruptcy owners taxed managing company of one member unless at individual there is a vote to continue Limited; income tax  No limit on number of rate shareholders  No transferability of membership without the  Easy to organize majority consent of other members  LLC members can agree to share profits and losses disproportionately 7.3 PROTECTION OF INTELLECTUAL PROPERTY Innovators, architects, engineers and creators can secure the thoughts they have created, for example through copyright or licenses. The point is to keep others from wrongly benefitting from their manifestations or creations. It likewise offers them a chance to bring in back the cash they put resources into fostering an item. Types of intellectual property rights The Netherlands has the accompanying sorts of security for licensed innovation rights: • Patents Licenses secure a development or a specialized item or cycle. It is unlawful for others to make, use, exchange, lease, or supply the protected item or cycle. The patent holder may anyway allow others to do as such by giving a patent permit. • Copyright 105 CU IDOL SELF LEARNING MATERIAL (SLM)

Copyright ensures works of writing, grant, science and craftsmanship. These incorporate books, films, canvases, music, games, photos and programming. Copyright is directed by the Copyright Act. Copyright exists consequently, so there is no compelling reason to enlist or apply for it. Any individual who makes a drawing at their work area at home consequently possesses the copyright to it. • Neighbouring rights Notwithstanding copyright, there are 'adjoining rights', otherwise called 'related rights'. These rights secure crafted by entertainers, music and film makers, and telecom organizations. This security is firmly identified with that offered by copyright, which clarifies why they are called 'adjoining' or 'related' rights. Like copyright, these rights emerge naturally, as is set down in the Neighboring Rights Act. • Trademarks Business visionaries can utilize a brand name to recognize their items or administrations from different items and administrations. Brand name rights ensure the names of items or administrations. They additionally ensure an item's logo and the plan of its bundling. Business visionaries should enroll their brand name assuming they need to ensure it. • Design rights Configuration rights ensure the presence of a few dimensional items. These incorporate backdrop examples, materials and the plan of family things, for example, morning timers, toys and seats. To acquire this type of security, a plan should initially be enlisted. It should likewise be new. • Database rights Information bases comprising of assortments of requested information might be secured by data set rights. This remembers official distributions for Overheid.nl and factual information on the site of Statistics Netherlands (CBS). Developing such an information base frequently requires an extensive speculation of time and cash. That is the reason the makers of data sets are ensured by the Databases (Legal Protection) Act. • Tradename law Tradename law ensures the name under which an undertaking works together. A tradename appears naturally, when the venture begins working. The proprietor doesn't need to enroll the tradename in the business register. The assurance of trademarks is directed in the Tradenames Act. 106 CU IDOL SELF LEARNING MATERIAL (SLM)

• Plant raisers' privileges Plant raisers can summon plant reproducers' privileges to secure their new plant assortments. These new assortments often result from long and expensive rearing cycles. The Board for Plant Varieties is answerable for conceding plant raisers' privileges in the Netherlands. First the Netherlands Inspection Service for Horticulture (otherwise called 'Naktuinbouw') conducts an examination and review to decide if an application is acceptable. On the off chance that the outcomes are positive, the Board awards plant reproducers' privileges to the candidate. • Semiconductor geology rights Semiconductor geology rights ensure the plan of electronic circuits on CPUs (otherwise called the geography of semiconductor items). These rights ensure circuits intended to perform explicit capacities. You can apply for semiconductor geography rights (chip rights) to the Netherlands Patent Office. 7.4 MARKETING THE NEW VENTURE Being a successful entrepreneur often means being able to balance the many different aspects of a business, such as financing, accounting, and management. One of the most important of those aspects is marketing. After all, if no one hears about the new product, how can it be successful? According to marketing research company CB Insights, in a survey of 101 companies that failed, 14 percent of them failed due to poor marketing. Marketing is an umbrella term given to those activities that companies use to identify consumers and convert them into buyers for the purposes of achieving a profit. No matter the size of the enterprise, marketing lays the foundation for how a company reaches and serves its target customers. Whether it’s a global brand such as PepsiCo or Apple, a small- to mid-size company such as Birchbox, or a small restaurant or local gym, marketing refers to the core strategies companies use to reach and sell to customers. As you might expect, the way entrepreneurs market their new product is somewhat different from how a large company markets an established brand. Traditional Marketing Being an effective entrepreneur regularly implies having the option to adjust the a wide range of parts of a business, like financing, bookkeeping, and the executives. Quite possibly the most significant of those viewpoints is advertising. All things considered, if nobody finds out about the new item, how might it be effective? As indicated by advertising research organization CB Insights, in a review of 101 organizations that fizzled, 14% of them bombed because of helpless promoting. Showcasing is an umbrella term given to those exercises that organizations use to recognize customers and convert them into purchasers for the 107 CU IDOL SELF LEARNING MATERIAL (SLM)

motivations behind accomplishing a benefit. Regardless of the size of the venture, showcasing establishes the framework for how an organization reaches and serves its objective clients. Regardless of whether it's a worldwide brand like PepsiCo or Apple, a little to average size organization like Birchbox, or a little café or nearby exercise center, showcasing alludes to the center methodologies organizations use to reach and offer to clients. As you would expect, the manner in which business visionaries market their new item is fairly not quite the same as how an enormous organization advertises a set up brand. Traditional Marketing Traditional Marketing for enormous organizations, for example, Coca-Cola, Disney, and Dell will in general zero in on overseeing and developing existing projects and brands. Organizations like these appreciate more noteworthy assets like considerable monetary help and enormous quantities of advertising experts to guide their endeavors. In any case, advertising for little and medium-sized organizations (those with 500 or less representatives and under $7.5 million of yearly receipts, as characterized by the Small Business Administration)3 is distinctive on the grounds that monetary assets are restricted, and it is normal the entrepreneur alone who is responsible for showcasing endeavors. On the off chance that they do have assets for promoting costs, they may utilize a little office on an expense for-project premise. As you have learned in past parts, little new businesses are typically close on assets, so they need to expand their assets through inventiveness and difficult work. While having restricted assets makes clear difficulties, being little additionally enjoys its benefits. For instance, it permits new organizations to be more adaptable, spry, and innovative than their set up rivalry. These characteristics can permit new organizations to upset their enterprises and become major worldwide players by utilizing pioneering promoting rehearses. Entrepreneurial Marketing On an essential level, enterprising advertising is a bunch of unusual practices that can help new companies and more youthful firms arise and have an edge in cutthroat business sectors. The principle contrast among these and conventional methodologies is that enterprising advertising will in general zero in on fulfilling the client and building trust by giving creative items and administrations that disturb or appeal to a particular market. Table 8.1 gives an outline of contrasts among conventional and enterprising promoting. Traditional versus Entrepreneurial Marketing Traditional Marketing Entrepreneurial Marketing 108 CU IDOL SELF LEARNING MATERIAL (SLM)

Traditional Marketing Entrepreneurial Marketing Greater amount of resources Few to no resources; founder drives efforts (sweat equity) Management of an established brand, Must be ingenious, energetic, and reminder advertising persistent to develop story and brand; leads to trust Financial and market share goals Satisfaction and awareness goals Manage existing customers Capture first customers; develop a client base and long-term relationships Manage existing products, promotion, Develop new products, price points, channels (placement), communication, pricing, placement, people, physical process, training, and design environment, and process (the “7 Ps”) Continue doing what works Trial and error; market pilots Communication with customers standardized, Communication with customers is more one-directional; more difficult to create one- fluid and spontaneous; two-way on-one relationships relationships Table 7.5 As the table shows, entrepreneurial marketing underscores adaptability and development as an approach to have a special interest inside cutthroat business sectors. For instance, consider how Drybar originator Alli Webb utilized her comprehension of market needs to make a specialty inside the conventional hairstyling industry. A hair specialist by profession, Webb went through five years as a stay-at-home parent, drying hair for loved ones at their homes to 109 CU IDOL SELF LEARNING MATERIAL (SLM)

make additional money. During this time, she understood there was a market need for \"just\" victories, or expert hair drying and styling. Seeing this need, Webb fostered a plan of action that would offer ladies an approach to get a victory without having to likewise get a cut or shading. Webb didn't imagine the victory; she just reexamined the space to do it, zeroing in on that sole part of hair styling, and offering the help in vogue settings (Figure 8.2). By being adaptable and imaginative through another space to offer this assistance, Drybar had the option to cut a specialty in the haircut business. In business since 2008, Drybar is as yet extending. Webb expected to open no less than 20 new areas in 2019. Marketing Mix Perhaps the greatest misinterpretation individuals have about showcasing is that it is about advancement, or how an organization sells or publicizes something. However, in all actuality, advancement is only one aspect of the advertising blend, which portrays the fundamental arrangement of methodologies and approaches that advertisers use to distinguish and arrive at their objective market. An objective market is the particular gathering of buyers for which an organization tries to give a decent or administration. One normal method of comprehension and recollecting the segments of the advertising blend for items and administrations is by intuition as far as the \"7 Ps.\" While each of these can be essential for an organization's showcasing blend, the initial four relate more to items: item, valuing, advancement, and place (and customarily have been designated \"the 4 Ps of promoting\"). The excess three relate more to administrations: actual climate, interaction, and individuals. While the 7 Ps are thoughtfully something similar for all organizations, how an organization tends to every \"P\" will be explicit to that organization's requirements and objectives. For a superior comprehension of the showcasing blend, see how Figure 7.5 separates the 7 Ps into their connected exercises. 110 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 7.1 Marketing Mix Figure 1 Each P of the marketing mix should work with the other Ps to create value for a business and its customers. Product, promotion, price, and place relate more to goods, while the people, physical environment, and process relate more to services. (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license) Product Inside the marketing mix, product alludes to a decent or administration that makes esteem by satisfying a client need or want. Merchandise are unmistakable items that can be contacted, smelled, heard, and seen, for example, a couple of sneakers, a granola bar, or a container of cleanser. Conversely, administrations are theoretical items. They normally involve paying a specialist to work on something for you, for example, vehicle fix or house keeping. 111 CU IDOL SELF LEARNING MATERIAL (SLM)

Organizations can package the two labor and products together to make additional incentive for their clients. Birchbox, for instance, gives merchandise (item tests) and administrations (tweaked item proposals) to fulfill their clients' craving to have the option to purchase excellence items in a problem free way. The worth Birchbox gives to clients depends on their capacity to do both. In the United States, administration arranged organizations are progressively assuming a bigger part in our neighborhood and public economies. For new companies, characterizing the worth of the items they will offer is a significant advance toward recognizing their upper hand inside a commercial center. On a fundamental level, in the event that you don't have the foggiest idea what advantage your item gives for sure need it satisfies, neither will your clients. Kevin Plank, originator of Under Armor, realized that the worth of his item would profit numerous competitors who were burnt out on having to oftentimes change their wet athletic apparel. As a previous football player, he had spent numerous hours preparing and suffering soaked practices, and thought about how he could reduce this issue that organizations didn't address well with cotton active apparel. After school, he chose to take his plan to a higher level and began an organization making athletic wear that had exceptional microfibers that kept competitors dry all through training and games. He then, at that point left out traveling to attempt to sell his incentive to school football crews on the east coast. Approaching the finish of 1996, he handled his first offer of shirts to Georgia Tech, which added up to $17,000—and the rest is history. Under Armor turned into a solid contender to Nike and Adidas by giving another kind of athletic wear that has upset execution by keeping competitors dry.6 Interestingly, Jawbone, the organization that produced Bluetooth speakers and other equipment, has left business since it changed its concentration from sound to wellbeing gadgets, which set it straightforwardly in rivalry with FitBit and comparable equipment organizations. Item disappointments, among different issues, caused this tech organization to flop.7 The organization is presently dealing with rehashing itself and will utilize man-made consciousness and sensor equipment to give clients data about their wellbeing through a membership. The wearable sensors will record fundamental client data that will be followed on an online stage that will then, at that point give ideas to clinical action.8 The organization's upgrade isn't yet finished, so it isn't formally in business again yet. Promotion Communicating an item's advantages to clients is a huge part of any advertising blend. Regardless of whether an item is the awesome its class, an organization should impart this worth to clients, or it will come up short. This is the thing that promotion does: It is the way toward imparting worth to clients in a manner that urges them to buy the great or administration. promotion should have an objective, a spending plan, a methodology, and a result to quantify. Organizations should utilize their special spending plan astutely to make 112 CU IDOL SELF LEARNING MATERIAL (SLM)

the best outcomes, which can incorporate deals, benefit, and mindfulness using a durable message all through the mission. Some normal types of promotion are publicizing, online media, advertising, regular postal mail, deals advancements, and individual selling. Advertising is a type of mass correspondence that permits organizations to contact a wide crowd through TV, radio, paper, Internet, magazines, and outside advertisements. A significant number of these media can be very costly for little organizations, compelling them to pick one methodology, or to decide on other more affordable strategies, for example, guerrilla showcasing or viral promoting (which will tended to in Marketing Techniques and Tools for Entrepreneurs). As Table 8.2 shows, the upsides of publicizing incorporate contacting a mass crowd and expanding deals, yet on the drawback, the expense might be a lot to handle, and the organization may confront a troublesome time arriving at the right objective. As we move from promoting to online media, we can see that web-based media takes into account more exact focusing on and better measurements to evaluate results. Social media is an absolute necessity use instrument for business people to interface with purchasers, particularly more youthful socioeconomics. Numerous clients can be discovered online in some web-based media stage. The objective is to discover the clients who fit your objective market. The advantages of online media incorporate focusing on clients all the more precisely utilizing their preferred foundation and having the option to discuss straightforwardly with them. These stages incorporate systems administration locales like Facebook, Twitter, and LinkedIn; photograph and video destinations like Snapchat, Instagram, and Pinterest; web journals; and news destinations. A business should figure out how to associate with its clients any place they are. As a maturing business person, the most ideal way you can begin interfacing with them is by recognizing your objective clients and by sorting out what sort of web-based media they regular. You can get some information about their online media propensities; you can look into reports about the kinds of web-based media your clients regular; or you can utilize extraordinary programming that tracks discussions via web-based media that relate to your business and industry. For instance, you may discover that your young clients hang out for the most part on Twitter and Instagram, and less on Facebook. You could profit with zeroing in on just those two stages and getting some answers concerning their discussions. You might need to look hashtags and stories that relate to your sort of business so you can join their discussion. You could then set up your profile, compose important substance and hashtags that sound good to your purchaser, and solicitation to follow influencers who can assist you with making consciousness of your business and item. When you have a profile set up, there are numerous ways you can make crusades: challenges, limits, or by basically giving helpful substance that 113 CU IDOL SELF LEARNING MATERIAL (SLM)

your client appreciates. The objective is to be important for the discussion and not sound like you are selling something. As well as posting great substance and contacting influencers, you may likewise profit with purchasing advertisements that can be topographically focused on to your client and that are more moderate and viable in light of the fact that you're straightforwardly focusing on somebody who is explicitly intrigued by your item. The weaknesses of focusing via online media incorporate the time and abilities needed to draw in with clients, and the requirement for reliably new substance. Many new companies accept that having a Facebook page will be sufficient to arrive at their clients, yet their clients may invest more energy on other online media stages. The time and exertion needed to track down the right stage, foster great substance, and associate with clients consistently is awesome. Public relations are the endeavors and instruments organizations use to associate and foster altruism with their constituents. Constituents can incorporate clients, financial backers, workers, colleagues, government substances, and the local area on the loose. The objective is to feature the organization in a positive light by contributing as a local area player. Apparatuses can incorporate pamphlets, question and answer sessions, local area administration, occasions, sponsorships, public statements, articles, and stories that assist business people with making a positive picture about their organization and get its name out there. On the off chance that taking an interest in an occasion, for instance, the support will show the logo and name of the organization in where everybody can see it. This shows the organization as an ally of the local area and as a supplier of items and administrations, yet of elusive commitments, like supporting the fantasies of the occasion members. The objective isn't to make a deal by then, yet to affect the local area and make positive connections overall since it's the correct thing to do—it might emphatically impact the customer when they make a buy later on. Direct mail, which is an approach to interface with buyers by means of email or through printed, sent pieces, is additionally a fundamental apparatus to stay in contact with clients, particularly when making long haul connections. The upside of this technique lies in associating with an all around inspired by client your item and might want to get news and advancements from you; in any case, the impediment is that it typically requires some investment to make these rundowns since it includes gathering data about clients during occasions, through online solicitations, or at the sales register. It likewise can be costly to convey bits of mail that may wind up in the junk. Sales promotions are motivating forces that stand out and push the client to make a move. These motivating forces incorporate limits, tests, discounts, rewards projects, endowments, and charges. Deals advancements can draw in new clients, however it might likewise diminish benefits since coupons and limits are offered for attempting an item. 114 CU IDOL SELF LEARNING MATERIAL (SLM)

Personal selling is an apparatus that utilizations vis-à-vis cooperation's to impart and impact a client to make a buy. It is particularly appropriate for extravagance merchandise. Typically, more expensive items will require a more drawn out selling interaction, and deals faculty will require more preparing on the item to find out about its special characteristics. This is quite possibly the most costly approaches to reach and hold clients, yet it very well may merit the venture. By and large, a decent business person should track down the right blend of promoting interchanges to arrive at clients. This will shift contingent upon the beginning up's financial plan, objectives, and techniques. Table 7.5 recognizes the benefits and disservices of each, as they identify with little and new businessAdvantages and Disadvantages of Promotion Types Promotio Examples Advantages Disadvantages n Type Advertisin  TV ads  Can reach a  Can be g mass audience  Radio spots expensive  Newspaper and  Great for  Access can be magazine limited spreads creating brand  Internet ads recognition  Billboards  Increased sales  Some targeting is possible, but it is impossible to fully control who sees the ad Public  Sponsoring  Develops  Big events Relations community positive brand and public events recognition relations campaigns  Charitable and  Creates can be civic goodwill resource toward 115 CU IDOL SELF LEARNING MATERIAL (SLM)

Promotio Examples Advantages Disadvantages n Type involvement company and intensive brand within  Scholarships the community  Not focused and grants on generating sales  Press conferences Social  Social  Pervasive and  Many Media networking companies sites such as inexpensive use social SnapChat, media, so it is Twitter, and access to hard to stand Facebook out from the massive crowd audiences  Target markets  Blogs and are highly vlogs customizable  Can be time- consuming based on  Influencers available data (industry experts who  Easy access to  Success act as young people requires advocates) dedicated personnel  Can be used to with special create expertise goodwill and a loyal fan base  It is often difficult to track conversion (customers taking a desired action, such as a purchase) 116 CU IDOL SELF LEARNING MATERIAL (SLM)

Promotio Examples Advantages Disadvantages n Type and sales numbers  Requires the creation of unique/engagi ng content Direct  Mailed letters,  Subscribers are  Building an Mail marketing email list of flyers, already interested postcards, and customers coupons interested in can take time  Email your product  Direct mail newsletters campaigns and thus more can be expensive likely to  Results convert to cannot be precisely paying tracked customers  Consumers often discard  Keeps already physical and interested digital “junk consumers up- mail” without to-date on looking at it product news, sales, product releases  Can target market based on location, average income, and other census- derived information 117 CU IDOL SELF LEARNING MATERIAL (SLM)

Promotio Examples Advantages Disadvantages n Type Sales  Sales  Incentivizes  Reduces Promotion buying and profits in s  Limited-time encourages exchange for offers consumers to promotion take action  Coupons  The promise  Appeals to of future sales  Free samples consumers’ and discounts desire to “get a can  Rewards deal” discourage programs regular  A good way to buying attract new and reluctant buyers Personal  Sales meetings  Personalizes  Can be Selling between a the salesperson relationship resource and a potential between the customer business and intensive the customer  Requires  Effective salespeople salespeople who are well- can convert trained and reluctant effective parties into paying  Consumers customers are turned off by sales  Salespeople tactics they can customize perceive as purchase aggressive  Requires constant lead 118 CU IDOL SELF LEARNING MATERIAL (SLM)

Promotio Examples Advantages Disadvantages n Type options for generation each buyer Table 7.6 Price Perhaps the most significant and testing components of the showcasing blend is estimating. Price is the worth that should be traded for a client to get an item or administration. This is typically financial and straightforwardly affects deals. Numerous business visionaries are scared by financials and the possibility of utilizing proclamations and other data to make projections (you will find out about these in Entrepreneurial Finance and Accounting). Effectively estimating your item empowers your organization to be serious while boosting your item's benefit potential. Here are a few techniques that entrepreneurs can use to successfully value items: Cost-led pricing is the least demanding approach to value an item. This includes taking the expense of making the item and making an overall revenue, which is how much benefit your business stands to make after costs have been deducted. For instance, in the event that you add the immediate expenses for materials and work to the circuitous expenses of compensations, promoting, lease, and utilities, you establish that your item costs $5 to make. Adding, say, a 30 percent net revenue would give you a business cost of $6.50. The rate added relies upon the business' objectives. This kind of estimating is useful when new companies don't have a lot of data about their objective market and need more opportunity to characterize their offer and business personality. Another approach to value an item or administration is to think about the thing the opposition is charging and decide if to go above, beneath, or match their costs. In the case of going above, or utilizing premium pricing (additionally called apparent worth evaluating), you need an unmistakable motivation behind why clients would need to spend more on your item. While utilizing penetration pricing, or estimating beneath contenders, can give you an upper hand, it might likewise prompt \"value battles\" in which contenders continue to drop costs trying to beat one another. Clearly, the impediment is decreased benefits for all. While evaluating equivalent to your rivals appears to be a consistent decision, if your item offers no 119 CU IDOL SELF LEARNING MATERIAL (SLM)

additional worth, this methodology is probably not going to tempt clients to change to your image. Customer-led pricing is comparably depicted: valuing drove by the client. You ask what the purchaser will pay and charge that. You can discover this by doing research and asking clients what they would pay for an item. Numerous innovation items are valued that way. Organizations overview clients about the thing they will pay, and they make items that convey the worth at the market cost. Loss leader pricing evaluating utilizes a beneath standard cost to draw in business with the expectation that clients will remain and look for other, more beneficial items. It is known as a misfortune chief since organizations lose cash on the lower-estimated item. Supermarket promotions ordinarily contain a few misfortune pioneers that are intended to draw you into their store in the expectations that you wrap up of your food shopping there. Introductory offers use lower beginning costs to draw in new clients and construct a client base before costs get back to \"ordinary.\" This technique is a type of entrance evaluating, as its will likely assist new items with infiltrating markets with set up contenders and brands. Numerous membership based items, for example, exercise centers are acquainted this way with acquire portion of the overall industry and income. Conversely, skimming is an evaluating procedure that use the freshness of an item to legitimize the greatest cost conceivable to \"skim\" the most benefits off the top, which means in the main period of deals. Over the long haul, the cost is brought down to oblige for more value touchy clients. Apple regularly presents its items with this specific strategy, charging the most exorbitant cost for them until it has depleted the market willing to purchase at that cost and when more current and all the more innovatively progressed items are presented. Then, at that point, Apple gradually brings down its estimating. In bundling, a markdown cost is set for a heap of items to urge clients to purchase in mass. While they pay more than if they were purchasing only one great or administration, they do as such in light of the fact that the general cost for a group lessens the individual cost of that item, giving them a preferable arrangement over if they somehow happened to buy things independently. An illustration of this system is utilized by DirectTV, which packages its telephone, Internet, and satellite administrations for a month to month expense. On the off chance that a client were to buy these administrations independently, they would be more costly. The advantages of packaging incorporate acquiring income per client, as they would not have paid for certain administrations independently, and making the request taking assignment more straightforward. Take inexpensive food chains, for instance. Rather than requesting that the client list everything independently from the menu, they give you the name or number of the pack. They make more benefit by including the beverage and sides to the principle entrée, and the client sets aside cash and time requesting. 120 CU IDOL SELF LEARNING MATERIAL (SLM)

The odd numbers strategy is a mental estimating procedure frequently utilized related to other evaluating techniques to make an item's value point more alluring to buyers. Utilizing odd numbers exploits that such numbers have a positive mental impact on clients. For instance, rather than valuing something at $20, the cost would be set at $19.99, which customers see as nearer to 19 than 20. While evaluating should be set up when beginning another business, estimating methodologies ought to be inspected on a continuous premise. These events specifically merit thought: • When adding another item or administration to your contributions • When request shifts (because of market, customer, or different variables) • When entering another market • When contenders are making changes • When your expenses are evolving • When changing items/administrations or methodologies 121 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 7.2 Price Figure 7.2 The “P” of “Place” may include distribution through direct or indirect channels. (Attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license) Taking advantage of multiple distribution channels is one strategy companies use to expand their brand and grow their profits. This can include having a physical storefront, developing an e-commerce website to sell goods online, and distributing goods through wholesalers and retailers. Including multiple touchpoints with the customer can increase the likelihood that they will choose your product. The longer your distribution channels, the longer it takes for your product to reach the end consumer, and the less control you have over the product and the price. As an entrepreneur, you must decide which channels best fit your product and pricing requirements. Additional Ps for Services As you have learned, items incorporate administrations also. These incorporate lawful, bookkeeping, counseling, clinical, amusement, publicizing, banking, and other expert administrations. When offering types of assistance, three extra Ps ought to be considered in the marketing mix. People People, or an organization's HR, will consistently be a vital factor in any effective business. In an assistance situated business, individuals who communicate with clients are particularly significant. Since the assistance is the item, they are the substance of the brand and an immediate connection between the organization and the client. At the point when a representative conveys a satisfactory or exceptional assistance, clients are urged to get back to buy the help again and furthermore share their positive involvement in others. At the point when clients go into a gems store and get great help from the sales reps, they will probably tell their loved ones about the positive experience through an individual reference or via online media. At the point when administration is poor, clients don't return. In the event that clients have an awful involvement with an eatery, it is conceivable they won't belittle the foundation any more and will most likely share a negative audit on the web. Now and again, helpless assistance has to do with factors other than representatives, yet as online survey destinations, for example, Yelp become more normal, helpless client care audits can cripplingly affect a brand, particularly for new companies attempting to break into a market. Recruit experienced individuals and have a decent preparing framework set up with remunerations that will assist representatives with conveying the best help to clients. Organizations should think about that regardless of the size of a business, they should advertise not exclusively to their clients yet additionally to their representatives, as they are the substance of the organization and the ones 122 CU IDOL SELF LEARNING MATERIAL (SLM)

who collaborate with clients. Representatives can represent the moment of truth the brand. Physical Environment The physical environment where a help is given is a significant piece of the showcasing blend. It can impact the organization's picture and pass on a great deal of data about the nature of an item, administration, organization, or brand. The familiar saying that you \"get just a single opportunity to establish a first connection\" is particularly valid for new organizations. Substantial prompts—style, smell, music, temperature, colors—send a quick message to clients about quality and demonstrable skill. For instance, in the event that you strolled into two dental specialists' workplaces (recall that, they are additionally business people), and one office smelled and looked perfect, and one didn't, which one could you pick? The equivalent goes for eateries, retail locations, and some other actual climate. Since an assistance can't be assessed before it is gotten, these prompts help clients settle on their choices. Process Process is the chain of systems or exercises needed to offer a support to the client. It is the entirety of the exercises that happen between the specialist organization and the client, from start to finish. On account of a specialist's office, this would incorporate making the arrangement, rounding out desk work, standing by to be seen, seeing the specialist, and paying. Since cycles can be burdensome and convoluted, they should be intended to stream as productively and consistently as could really be expected. On account of administrations that are given on the web, measure incorporates the web composition's and usefulness, and the entirety of the means clients take from perusing look at. A solid web composition helps the business visionary say what's going on with the organization, what it does and for whom, and what moves the client can make. Activities can go from clicking for more data, the capacity to buy an item, or checking whether there is accessibility for a help and having the option to book it or make an arrangement. An illustration of an extraordinary site is Airbnb's site whose plan is engaged, motivating, and direct. What do you believe is its fundamental source of inspiration? 7.5 SUMMARY Fruitful entrepreneurship takes in excess of an imaginative thought—it likewise requires the right mentality and range of abilities. Regardless of whether you're growing new business, dispatching new pursuits, or building a pioneering society inside a bigger association, this program sets you up to foster new systems for changing problematic advancement into upper hand and a productive business. 123 CU IDOL SELF LEARNING MATERIAL (SLM)

7.6 KEYWORDS  Beneficiary—Individual(s) identified to inherit specific property (e.g., beneficiaries are named on an insurance policy and retirement savings plans such as an IRA).  Investing—The process of purchasing assets such as stocks, bonds, real estate, and mutual funds with the expectation of future income and/or capital gains (growth in value).  Market Risk—The risk that the price of investments will be affected by the volatility of financial markets in general.  Penalty—An additional tax due when conditions of retirement savings plan are not fulfilled. An example is the 10% penalty for early withdrawals before age 59½. Late withdrawals (i.e., not making minimum required distributions after age 70½) from a traditional IRA or 401(k) plan are another example of an instance when penalties are assessed.  Risk—Exposure to investment loss. For example, a high-risk investment carries with it a high chance of loss. 7.7 LEANING ACTIVITY 1. Discuss the protection of intellectual property ___________________________________________________________________________ ___________________________________________________________________________ 2. Analyze how to market new venture ___________________________________________________________________________ ___________________________________________________________________________ 7.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Write a note on Protection of Intellectual property 2. How to Conduct Market Research? 3. State the meaning of sole proprietorship 4. State the meaning of partnership 124 CU IDOL SELF LEARNING MATERIAL (SLM)

5. State the meaning of corporation Long Questions 1. What are the different marketing strategies? 2. Describe the factors to consider for choosing the legal form of new venture 3. Distinguish between traditional versus Entrepreneurial marketing 4. Describe the components of marketing mix 5. Describe the types of intellectual property rights B. Multiple Choice Questions 1. Which of the list below does not form Intellectual Property? a. Tangible assets b. Copyright. c. Patents d. Trade marks. 2. Strategic entrepreneurial marketing has been summarised as the 4Is: identification of target markets, interactive marketing methods, informal intelligence gathering and what is the fourth? a. Internet b. Innovation. c. Instructiveness. d. Independence. 3. The form of business organization that has the largest sales volume is the: 125 a. cooperative CU IDOL SELF LEARNING MATERIAL (SLM)

b. Partnership. c. Corporation d. Multinational. 4. Which of the following is/are plans to achieve financial goals? a. Employee Benefit Planning b. Asset Acquisition planning c. Liability and Insurance Planning d. All of these 5. The main disadvantage of a general partnership is: a. The unlimited liability of the partners. b. Disagreement amongst partners. c. Shared management. d. Difficulty of termination. Answers 1-a, 2-b, 3-c, 4-d, 5-a 7.9 REFERENCES References book  Entrepreneurship: Hisrich, Robert. Michael Peters and Dean Shepherd, Mathew. Tata McGraw-Hill Education, New Delhi 2017.  Entrepreneurship Development: Sangeeta Sharma, PHI, 2017.  Innovation and Entrepreneurship: Peter Drucker, Harper Collins India, 2015. 126 CU IDOL SELF LEARNING MATERIAL (SLM)

 Entrepreneurship Development and Small Enterprise: Poornima M, Pearson Education, 2014. Textbook references  Entrepreneurship Development: Gordon E and Natarajan K, Himalaya Publishing House, 5th Edition, 2014.  Entrepreneurship A South Asian Perspective: T V Rao, Donald F. Kuratko, Cengage, 1st Edition, 2012.  The Innovators by Walter Isaacson.  Modern Monopolies by Alex Moazed and Nicholas L. Johnson @109.10 Website  www. Yourarticlelibrabry.com  www. Managementstudyguide.com 127 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT -8 MANAGING GROWTH IN NEW VENTURE STRUCTURE 8.0 Leaning Objectives 8.1 Introduction 8.2 Characteristics of high growth new ventures 8.3 Strategies for growth 8.4 Building the new venture capital 8.5 Summary 8.6 Keywords 8.7 Leaning Activity 8.8 Unit end Questions 8.9 References 8.0 LEANING OBJECTIVES After studying this unit, you will be able to:  Describe the strategies for growth  Discuss characteristics of high growth new ventures  State the building the new venture capital 8.1 INTRODUCTION Your business is your child; nurture and nourish it to help it grow healthy and strong. “When you’re starting up, to a degree you’re happy to let the business run away with itself and see where it goes,\" says Internet entrepreneur Shaa Wasmund. But, she warns that neglected growth shouldn’t last forever. \"Plenty of great businesses and entrepreneurs have fallen into that trap and failed as a result.” If you're fortunate enough to have found success with your small business, you'll have to manage growth; whether you're ready to or not. 128 CU IDOL SELF LEARNING MATERIAL (SLM)

8.2 CHARACTERISTICS OF HIGH GROWTH NEW VENTURES What is a high-growth firm? Before we look at their characteristics are, let’s look at what a high-growth firm is: In the first of the studies we reviewed, Salesforce’s Small and Medium Business Trends Report (4th Edition), the report indicated the biggest challenges the leaders of these companies are:  Acquiring new customers (48%)  Planning for the long-term (28%)  Retaining existing customers (26%)  Financial management (25%) Additional findings from Hinge Marketing’s High Growth Study 2021 also identified these issues:  The need for new skills in strategy, business development, and marketing.  Marketplace uncertainty.  Increasing competition both from new competitors and larger firms.  Changes in the ways buyers buy professional services.  Downward pressure on pricing. High-growth or not, if your business is facing similar challenges, you’re clearly not alone! 8.3 STRATEGIES FOR GROWTH Start-ups and small businesses usually set out into their chosen markets fueled by ample enthusiasm and positivity. This may take them far, but to truly succeed in competitive markets it is prudent to have a tangible long-term business growth strategy in place. The unfortunate truth is that many start-ups or small companies fail because they haven’t taken this crucial step. Without it, a new business can reach a plateau far sooner than expected; this stage may even be a death knell, yet it is possible to turn things around quickly by implementing some appropriate business growth strategies. 129 CU IDOL SELF LEARNING MATERIAL (SLM)

If you are at the stage where your business needs a boost – and fast – it is time to figure out which growth strategies can be put in place. This article aims to help you understand how to accelerate business growth so that your business has every chance of long-term success. Here are our top 6 strategies to grow your business: 1. Market penetration Market penetration aims to increase market share for an existing product, or to successfully promote a new product. Useful strategies include advertising, bundling products into attractive, saleable packages, offering discounts on larger orders and lowering prices to beat competitors. Although it may seem unappealing, lowering prices can be a good short-term expansion strategy for businesses selling products similar to those sold by their competitors. For example, businesses with relatively generic products (such as household cleaning supply businesses or stationers) can benefit from adopting this market penetration strategy. If you can’t increase or improve your product range and must continue to promote existing products, it may be necessary to make products more attractive by coupling them with complementary products in a package, or offering bulk buy bargains. 2. Market development A market development strategy pertains to promotion of existing products or services to new customers, or launching them in a new geographical area. It might be that your usual market has been saturated or you’re struggling to attract new customers or clients in your local region. Sales and profits are apt to suffer unless a business finds new markets for its products. A larger-scale example of this would be leading footwear companies Nike, Adidas, and Reebok, which successfully expanded into international markets with original, attractive marketing campaigns. Small businesses budgets may not be comparable, but it is certainly possible to find new uses for current products or branch out into similar markets. For example, a restaurant owner might consider private catering, or doing some B2B marketing to get well-packaged signature products onto local grocery store shelves. 3. Alternative channels 130 CU IDOL SELF LEARNING MATERIAL (SLM)

Utilising alternative channels is one of the best methods of growth in business. Many small businesses already use more than one online platform for marketing, but sometimes switching platforms achieves better results. The top three marketing channels are email marketing, social media and business websites. 54% of small businesses use email and 48% use social media; it might be surprising to know that less than two thirds (equating to 64%) of small businesses has its own website, according to B2B research firm Clutch.co – yet customers tend to expect to find a website for informational purposes at the very least! For exclusively offline businesses, it may be time to launch a website with an online product store to gain national or international reach. Trends in recent years show that having both an offline and online presence leads to optimum growth, so it is worth considering. Small businesses with quality products usually benefit from using alternative channels. Five commonly used channels are Google Ads (pay-per-click/cost-per-click advertising), Facebook, email marketing and remarketing. To give you an idea, remarketing is email-based and relates to the collection of user information for list creation; the lists are then used for future promotional emails. 4. Product expansion Small businesses can benefit hugely from expansion of product lines or adding new features to appeal to their existing markets. You may be experiencing a lull in sales or profits due to outdated technology or outmoded products. If so, it could be time to expand your product line. Drinks giant Coca Cola are a good example: in order to outperform competitors, they launched Cherry Coke in 1985. As the first adaptation of the original drink, it refreshed the interest of previous customers and attracted the attention of many more. Gilette is another company with many variants of similar products in their range. When your product sales start to decline, it’s time to phase out weaker products and introduce newer versions to your loyal customers as a starting point. Any business with products no longer hitting targets can benefit from product or service expansion, but remember that pre- expansion research is key in order to avoid failure. 5. Market segmentation Another of the small business growth strategies is market segmentation. This simply means to divide your market into various groups (segments) according to customer preferences, interests, locations and other characteristics. These segments allow you to create targeted 131 CU IDOL SELF LEARNING MATERIAL (SLM)

campaigns according to specific variables, giving the campaigns a much higher chance of success. Typical segments are: Geographic Demographic Firmographic Behavioural Psychographic Segmentation is a strategy typically employed by businesses such as cosmetics suppliers, banks, clothing companies and media outlets. If your product or service range is in any way diverse, you can surely benefit from market segmentation. Note that it will involve thorough research in order to efficiently profile your customers and tailor content accordingly. Capturing details through email surveys, purchase history and site analytics is a good start. However, given that 65% of marketing managers admit to struggling with the interpretation of data-driven market segmentation solutions, reducing the complexity of this strategy may appeal to you. If so, there is one very convenient method of segmenting your market: a powerful customer relationship management (CRM) tool can optimise your segmentation effortlessly, saving you plenty of precious time and energy. 6. Partnerships Sometimes joining forces with another business is the most viable method of growing your small business. You might choose to do this though mergers, acquisitions or partnerships with other businesses. Provided that the arrangement brings significant benefits to all parties, it can be a true win-win situation that boosts resources in a big way. Depending on your business type, the possibilities might include extra resources in terms of manpower, skillsets, knowledge, equipment and technology, for instance. There may even be a reduction in workloads or commercial risks. Partnerships tend to suit sole traders who can share clients and collaborate to complete complex projects. For example, carpenters, electricians and builders can help each other to gain traction in the construction industry. By joining up with a complementary, non-competitive business you can instantly gain access to new customer bases and markets. If going down this route, just be careful to have comprehensive legal contracts in place in order to protect your business in the event of unforeseen issues. 132 CU IDOL SELF LEARNING MATERIAL (SLM)

To conclude, by constructing a solid business development strategy you can inject new life into your business – whatever the market. Just keep in mind that no business strategy or plan is the same; it is important to figure out what works for your specific type of business and tailor it according to the resources at your disposal, the needs of your target audience, and your company vision. 8.4 BUILDING THE NEW VENTURE CAPITAL Invention and innovation drive the U.S. economy. What’s more, they have a powerful grip on the nation’s collective imagination. The popular press is filled with against-all-odds success stories of Silicon Valley entrepreneurs. In these sagas, the entrepreneur is the modern-day cowboy, roaming new industrial frontiers much the same way that earlier Americans explored the West. At his side stands the venture capitalist, a trail-wise sidekick ready to help the hero through all the tight spots—in exchange, of course, for a piece of the action. Venture builders are organizations dedicated to systematically producing new companies, which they help grow and succeed. There are five core activities in which venture builders engage: identifying business ideas, building teams, finding capital, helping govern or manage the ventures and providing shared services. There are also two important activities that only some venture builders pursue: employing a methodology of entrepreneurship, and providing talent to the ventures. Five core activities Identifying business ideas can be done in different ways. Some clone existing models. Others choose an opportunity space where they develop research projects, explore different ideas and prototype concepts. Regardless of the specific approach used, the goal is to come up with a viable business idea (e.g. Founders’ Factory combines expertise in entrepreneurship with strategic corporate partnerships to identify potential concepts). Venture builders create teams from the ground up. This is undertaken once the business idea is clearly identified (e.g. eFounders and or LeStudioVC have a Talent Acquisition teams constantly looking for founders for their ventures). Venture builders facilitate access to capital for the startups they develop. They do this either through a fund they own, or by connecting the different ventures to their network of investors (e.g. Nuclio Venture Builder supports it’s startups in their fund raising efforts). 133 CU IDOL SELF LEARNING MATERIAL (SLM)

Venture builders help lead the ventures. They can have a governance role, they can participate in the management of the companies, or both (e.g. Blenheim Chalcot uses their team of experts to give its startups what they call an unfair competitive advantage). Venture builders provide shared services to their ventures, such as legal, design or accounting (e.g. RocketInternet’s ecommerce ventures have access to their logistics’ platforms). Two non-core activities Some venture builders rely heavily on methodologies and learning processes. They build systems that help them share knowledge across their ventures, so they all benefit from the experience of others. (e.g. Polymath Ventures is constantly building and improving its methodologies for designing and growing businesses) Finally, some venture builders provide talent to the ventures in times of need. The venture builder’s operating staff may switch between ventures as talent needs arise. (e.g. BCG Digital Ventures supplements its ventures needs with its own talent when needed) Differences with other models There are some important differences between the venture builder model and other types of organizations:  Startups: usually concentrate on one core business, venture builders continuously produce new ventures  Accelerators or incubators: provide mentoring and some shared services. They do this for a limited period of time, and they bring in outside teams with mature ideas. On the contrary, in a venture builder all ideas are developed in-house, and teams are built from the ground up. A venture builder’s relationship with its ventures is long term; it’s deeply involved with the startups it produces up until they exit  VC funds: are not operational organizations. They invest in promising teams and business ideas that meet their criteria. On the other hand, venture builders are very involved with daily management of the operation. When a venture builder owns equity in its ventures, it’s because it generated the idea and invested significant effort in growing the company — not because it provided capital. Having said this, it’s also true that more and more venture builders are creating funds to alleviate fundraising efforts  The identification of the business idea is the activity where we observe most variations between different venture builders. It is a very important area so we’ll 134 CU IDOL SELF LEARNING MATERIAL (SLM)

explore this activity in detail. We’ll also discuss what the remaining activities mean at the different stages of the ventures (design, acceleration and scale-up).  However, we must first understand the three different business models venture builders have. Types of ventures builders and their business models  Some venture builders work for investors, others provide their services to corporations, or are part of corporations themselves. Each has a particular business model. Working for investors: industrializing entrepreneurship Business angels and VCs invest in the startups that spring from venture builders as they would in any other startup. Investors are hoping that the expertise and seniority the venture builder accumulates will offset part of the risk that comes with entrepreneurship. Investors can also put money in a pool of ventures, or in the venture builder itself. In this scenario the business model for the venture builder is based on the equity it retains — along with investors and founders — from every venture it produces. Its efforts are rewarded when the startup is sold, so the goal is to bring the startup to an exit. Meanwhile, the venture builder charges the ventures for the services it provides. Working for corporations: venture-building-as-a-service A second version of a venture builder is the one that works for corporations. In this consulting model (venture-building-as-a-service) corporations are simultaneously the investor and the client. Because the corporation owns the business or businesses that emerge from the engagement, the venture builder and its talent can’t retain equity from the ventures. Corporations are charged fees per hour. Venture builders that work for corporations divide these projects in stages that are sold independently. The most common stages are:  Innovation: here the venture builder goes through a 4-month process where multidisciplinary teams explore an industry or an area or opportunity. Human- centered design, lean startup and other tools are used to explore the defined space and produce business concepts, financial models, go-to-market strategies and prototypes 135 CU IDOL SELF LEARNING MATERIAL (SLM)

 Incubation: in this phase the founding team is built and the concepts defined in the previous phase are tested with high resolution MVPs. During this 6-month period, go- to-maket strategy is executed and the product is evolved with the goal of validating product-market fit  Commercialization: during this phase the venture is focused on scale-up efforts, building management systems and middle management layers, as well as growth strategies This three stages more or less correspond with the phases commonly called: design, acceleration and scale-up — we’ll refer to these later to explain the different activities venture builders pursue. In-house venture building: empowering innovation The corporate world is renewing its efforts to innovate and fight disruption — or be the agent of disruption. Creating a venture builder under the corporate umbrella is an emerging model chosen by the firms which are most committed to the future. In this third model the corporation owns the venture builder, which becomes a vehicle for investing in new businesses. Interestingly the venture builder is also the context that facilitates developing competencies in innovation. So far we’ve explored three different models: the ones working for investors, the ones providing services to corporations, and the ones working inside corporations. Now, let’s look at how venture builders choose the businesses they’ll build. Paths to identifying business ideas There are three main approaches to deciding ‘what to build’: using methodology, cloning and gut feeling. This is the activity where venture builders diverge most among one another. Venture builders focused on methodology Coming up with a successful business idea is not easy. The quality of the work done during the design phase echoes throughout the entire life of the venture. In addition, venture builders are continuously creating new business concepts, so they benefit from having a systematic process. This is why some venture builders are developing their own methodologies, especially for identifying business ideas. Surprisingly not many venture builders follow this methodological approach. Only in the consulting space (venture-building-as-a-service) are all players working with clear tools and 136 CU IDOL SELF LEARNING MATERIAL (SLM)

methodology. It seems reasonable to think that no corporation would pay large amounts of money to follow someone else’s gut feeling, or to clone existing ventures. Cloning startups These venture builders identify the business models that are working in other geographies and copy them. Later, when the original venture has money to grow, they sell them their local version. Rocket Internet, with companies like Airbnb’s clone Wimdu, is maybe the best known example. A methodology for coming up with new business concepts is not needed, as one is just copying. Sometimes these venture builders have platforms (digital or logistic) that their different ventures can use as shared services. Working by gut feeling Most venture builders are created by experienced entrepreneurs. They’ve been successful once, and they believe that following their instincts will make them successful again. This breed of venture builders moves forward with the business ideas judged to have potential by the leaders of the organization. I’m not very fond of this model for two reasons. On the one hand, I believe that the fact that serial entrepreneurs show greater chances of being successful again pleads the case for more methodology and learning, not for less. On the other, I also think that dependance on certain individuals limits the venture builder’s ability to scale. Up to here we’ve identified three very different ways of coming up with business ideas. Now let’s take a deeper look at the rest of the important activities venture builders develop. 8.5 SUMMARY  Business growth is a difficult beast. Grow too quickly, and your company could tear apart at the seams. Grow too slowly, and your competitors are likely to eat your lunch.  Categorizing the problems and growth patterns of small businesses in a systematic way that is useful to entrepreneurs seems at first glance a hopeless task. Small businesses vary widely in size and capacity for growth. They are characterized by independence of action, differing organizational structures, and varied management styles.  Yet on closer scrutiny, it becomes apparent that they experience common problems arising at similar stages in their development. These points of similarity can be organized into a framework that increases our understanding of the nature, characteristics, and problems of businesses ranging from a corner dry cleaning 137 CU IDOL SELF LEARNING MATERIAL (SLM)

establishment with two or three minimum-wage employees to a $20-million-a-year computer software company experiencing a 40% annual rate of growth.  For owners and managers of small businesses, such an understanding can aid in assessing current challenges; for example, the need to upgrade an existing computer system or to hire and train second-level managers to maintain planned growth.  It can help in anticipating the key requirements at various points—e.g., the inordinate time commitment for owners during the start-up period and the need for delegation and changes in their managerial roles when companies become larger and more complex.  The framework also provides a basis for evaluating the impact of present and proposed governmental regulations and policies on one’s business. A case in point is the exclusion of dividends from double taxation, which could be of great help to a profitable, mature, and stable business like a funeral home but of no help at all to a new, rapidly growing, high-technology enterprise. 8.6 KEYWORDS  Acquisition: Taking ownership of another business. Frequently used in conjunction with the word merger, as in mergers and acquisitions or M&As.  Angel Investors:Individuals who back emerging entrepreneurial ventures, usually as a bridge to get from the self-funded stage to the level of business that would both need and attract venture capital. Funding level ranges anywhere from $50,000 to $2 million.  Business incubator:Provides workspace, coaching, and support services to entrepreneurs and early-stage businesses.  Merger:A joining together of two previously separate corporations. A true merger in the legal sense occurs when both businesses dissolve and move their assets and liabilities into a newly created entity.  Strategic alliance:An ongoing relationship between two businesses in which they combine efforts for a specific purpose. 8.7 LEANING ACTIVITY 1. Analyze how to build the new venture capital ___________________________________________________________________________ ___________________________________________________________________________ 2. Describe market segmentation 138 CU IDOL SELF LEARNING MATERIAL (SLM)

___________________________________________________________________________ ___________________________________________________________________________ 8.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. Describe the strategies for growth 2. State market penetration 3. Describe market development 4. What is a high-growth firm? 5. Narrate the role and significance of an entrepreneur in an economy. Long Questions 1. Describe the strategies for growth 2. Evaluate the paths to identifying business ideas 3. Describe the types of ventures builders and their business models 4. Discuss product expansion 5. What are the functions performed by entrepreneurs? Explain the characteristics of successful entrepreneur B. Multiple Choice Questions 1. Which one of the following is a sound strategic option for an entrepreneur when synergy is present? a. Merger b. Joint venture c. Minority interest d. Majority interest 139 CU IDOL SELF LEARNING MATERIAL (SLM)

2. The activity that occurs at the start of the new venture is called as a. Business activity b. Departure point c. Goal setting d. Motivation 3. Which of the following is one of the major problems for an entrepreneur in the initial stage of creating a new venture? a. Lack of education b. Lack of resources c. Lack of experience d. Lack of time 4. Strategic entrepreneurial marketing is all about the 4Is, Identification of target markets, Interactive marketing methods, Informal intelligence gathering and ____ a. Independence b. Involvement c. Implementation d. Innovation 5. Which of the following is NOT one of the major responsibilities involved with managing an entrepreneurial venture once it is operational? a. Managing bureaucracy b. Managing people 140 CU IDOL SELF LEARNING MATERIAL (SLM)

c. Managing process d. Managing growth Answers 1-a, 2-b, 3-c, 4-d, 5-a 8.9 REFERENCES References book  Entrepreneurship: Hisrich, Robert. Michael Peters and Dean Shepherd, Mathew. Tata McGraw-Hill Education, New Delhi 2017.  Entrepreneurship Development: Sangeeta Sharma, PHI, 2017.  Innovation and Entrepreneurship: Peter Drucker, Harper Collins India, 2015.  Entrepreneurship Development and Small Enterprise: Poornima M, Pearson Education, 2014. Textbook references  Entrepreneurship Development: Gordon E and Natarajan K, Himalaya Publishing House, 5th Edition, 2014.  Entrepreneurship A South Asian Perspective: T V Rao, Donald F. Kuratko, Cengage, 1st Edition, 2012.  The Innovators by Walter Isaacson.  Modern Monopolies by Alex Moazed and Nicholas L. Johnson @109.10 Website  www. Yourarticlelibrabry.com  www. Managementstudyguide.com 141 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-9 SOURCES OF INSTITUTIONAL FINANCE FOR ENTREPRENEURS STRUCTURE 9.0 Learning Objectives 9.1 Introduction 9.2Role of financial Institutions for funding enterprises 9.3Summary 9.4Keywords 9.5Leaning Activity 9.6Unit end Questions 9.7References 9.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  State IFCI  Describe the role of ICICI  Discuss National Industrial Development Corporation (NIDC)  Describe National Small Industries Corporation( NSIC) 9.1 INTRODUCTION Generally, a 'Financial institution' is established mainly to provide longterm capital for Industries & agriculture. These financial Institutions play an important role in the development of SSIs and entrepreneurship. They have mostly been set up statutorily by the government but some private sector participation in the ownership and functioning of some of them may also exist. Usually recognized as specialized institution, they are also recognized as \"Development Bank\" or Term Lending Institution or \"Special Development Financial Institution.\" In this context Government of India (GOI) started a series of financial institution since independence to provide term finance to the industry such as IFCl, SFCs, ICICI, IDBI, 142 CU IDOL SELF LEARNING MATERIAL (SLM)

Unit Trust of India (UTI), National Industrial Development Corporation (NIDC) and National Small Industries Corporation (NSIC) etc. which are discussed as under: 9.2 ROLE OF FINANCIAL INSTITUTIONS FOR FUNDING ENTERPRISES Industrial Financial Corporation of India (IFCI): To meet the longterm finance needs of entrepreneurs several commission and committees such as \"Industrial Commission (1916-18), the External Capital Committee (925) and the Indian Central Banking Enquiry Committee (1929-31) had stressed the need for setting up of such institutions, but no action was taken by the Government. But the greater need to finance the over-worked units during the Second World War period forced the Government to set up Industrial Finance Corporation of India, which came into existence on the 1st July 1948. The Corporation came into existence with an aim to provide medium and long term credit to large scale industries, organized as public limited companies or cooperative societies in India, engaged or proposing to engage in manufacturing, preservation or pricing of goods, mining, generation and distribution of electric power or any other source of power, shipping and hotel industries in India particularly in circumstance when normal banking accommodation is inappropriate or resource to capital issue method is impracticable. IFCI is the first term-financial Institution which was set up in July 1948 by the Government of India under the IFCI Act 1948 with objective of providing medium and long-term loans to largest small Industrial concerns in the private sector.' However, joint and public sector also have been made eligible for its assistance. It provide direct rupee and foreign currency loans for new industrial projects and for expansion, diversification, renovation and modernization of existing units, It also underwriter and directly subscribe to industrial security, provided financial guarantees merchant banking services and leave finance. Main resources of the IFCI are; (a) Loan from RBI, (b) Share capital, (c) Repayment of loans, (d) Retained earnings, (e) Loan from Government, (f) Lines of credit from foreign lending agencies; and (g) Commercial borrowings in international capital market. It has introduced a number of financial promotional schemes on its own. The letter includes eight consultancy fee subsidy schemes, and two entrepreneurship development schemes. It has formed IFCI Financial Limited. The constitution of IFCI was ciianged in 1993 from a statutory corporation to a company under the Companies Act to encash greater flexibility. In future the IFCI Ltd. would lay emphasis to cater the needs of small & medium enterprises and serve as a mid-corporate specialist. As an end-March 2003, the principal holders of the total paid-up capital of IFCI 143 CU IDOL SELF LEARNING MATERIAL (SLM)

Ltd. along with share were IDBl (18.96%) Nationalized Banks (19.89%) SBI (9.69%) LIC (5.02%) GIG site subsidiaries (5.97%) and so on. Functions of Industrial Finance Corporation of India (IFCI): The Corporation performs the following functions: (1) Underwriting the shares, bonds or debentures of industrial enterprises; provided such stocks, shares or debentures are disposed of by the Corporation within a period of seven years from the date of acquisition, (2) granting loans or subscribing to the debentures of industrial undertakings repayable within a period not exceeding 25 years, (3) guaranteeing loans traded in the public market by the industrial concerns, repayable within 25 years or raided from scheduled banks or State co-operative banks, (4) subscribing directly to the stock or shares of any industrial concerns, (5) guaranteeing deferred payments in respect of import of capital goods' by industrial concerns who are able to make such arrangements with foreign manufacturers or in connection with the purchase of capital goods manufacturing in India, (6) guaranteeing loans raised from any banks or financial institutions in and country outside India, (7) acting as the agent of the Central Government and IDBI in respect of loans sanctioned by them to industrial concerns, (8) undertaking Merchant Banking Operations, (9) providing technical and administrative assistance to any industrial concern for the promotion, management by expansion of any industry, and (10) undertaking research and surveys for evaluating or dealing with marketing or investments and undertaking and carrying out techno-economic studies in connection with the development of industry. National Industrial Corporation (NIDC): The NIDC was set up in October 1954 as statutory Corporation owned by Government of India. Functions of NIDC: (i) To formulate and execute projects for setting up new industries, (ii) To provide consultancy services (iii) To finance the rehabilitation and modernization of certain Industries, such as cotton & Jute textiles and machine tools. It is a financial PSU, a wing of Ministry of Commerce & Industry, Government of India. Industrial Development Bank of India (IDBI): For coordinating the activities of the existing financial institutions, it became necessary to set up a new financial insfitution. Hence, a decision was taken by the Government of India in pursuance of the above object, to set up a new institution to be called Industrial Development 144 CU IDOL SELF LEARNING MATERIAL (SLM)

Bank of India. The Government of India introduced the IDBI Bill in Parliament in February 1964 initiating discussion on the Bill, the then Finance Minister emphasized the need for an institution like Development Bank to arrange medium and long-term loans for industries. The IDBI was set up as wholly - owned subsidiary of the RBI on July 1, 1964, under an act of Parliament. In February 1976, the IDBI was declined from the RBI and since then, it has become apex institution in the field of industrial finance. The Bank was taken over by the Government of India in 1976. The main object of setting up this institution have been to bridge the gap between demand and supply of finance by providing direct financial assistance to industrial concerns wherever necessary and to bring into existence an apex body to coordinate activities of various financial institutions providing term finance to industries. Therefore, IDBI has been created not only as a financial agency but also for the purpose of integrating activities of all the financial institutions providing short, medium and longterm benefits for the industry. Functions of IDBI: The main function of the Industrial Development Bank of India, as its name itself suggest is to finance Industrial enterprises in both private and public sector. Financial assistance is provided either directly or through special financial institutions. (a) Direct Assistance: IDBI assists Industrial unit directly by way project loan, underwriting of and direct subscription to industries securities (Share & Debentures) soft loans, technical development fund loans and equipment finance loan. IDBI provides direct assistance for project costing more than Rs. 3 Crore under the Project finance scheme. (b) Indirect Finance: IDBI Indirect assistance is provided basically to tiny, small and medium enterprises mainly. (i) By way of refinance of Industrial loan granted by SFCs, SIDCs, and commercial banks, co-operative banks an RRB. (ii) Rediscounting of bills arising out of safe of Indigenes machinery a deferred payment basis. (iii) Seed Capital assistance to new enterprise never generally through SFCs & SIDCs. (c) Special Assistance: IDBI Act 1964, provide Development Assistance fund. This fiind to be used by the IDBI to assist those Industrial concems which are not able to secure funds in the normal course either because of heavy investment or low rate of return both. (d) Direct Assistance to Industries: The IDBI has been empowered to finance industrial concerns directly under the following structural arrangements: (i) To grant financial accommodation up to a 16 year period for export of capital goods and other commodities, (ii) To grant loans or to subscribe to the shares and debentures of 145 CU IDOL SELF LEARNING MATERIAL (SLM)

industrial concerns. Such loans, advances, and debentures can be convened into equity shares at the option of the Bank, (iii) To underwrite new issues of Industrial concerns and accept, discount or rediscount bonafide commercial bills or promissory notes of industrial concerns, (iv) To guarantee deferred payment due from industrial concerns for loan raised by them in the market or from scheduled banks etc. (e) Assistance to other financial institutions: IDBI has carried out the following refinancing functions: IDBI can refinance term advances of 3 to 25 years maturity made to industrial concerns by IFCI, SFCs and other financial institutions which may be notified by the Government. It can similarly refinance term loans of 3 to 10 years maturity made by scheduled banks and State Co-operative Banks. It can also refinance export credit of 15 years' maturity where primary lending institutions grant loans to person in India and to parsons outside India repayable within a period of 12 years. (f) Creation of Development of Assistance funds: The Bank created a development assistance fund in 1965 with an initial contribution from Central Government. This fund is intended to provide assistance for industries which for various reasons like, heavy investment involved or low anticipated return on capital, may not be able to obtain funds in the normal course. The prior approval of the Central Government is necessary for any assistance from the Fund (g) Soft loan scheme: The soft loan scheme came into existence in November 1976 for financing the modernisation programme of five selected industries, namely, cotton, textiles, jute, cement, sugar and specified engineering industries. The scheme aims at modernisation, replacement and renovation of industry which has become necessary to achieve a more economic level of production in order to enhance their compefitiveness in domestic and international markets. (h) Technical Development Fund Scheme: Technical Development Fund Scheme was introduced in March 1979 with the object of promoting fuller capacity utilization, technologies upgradation, and export development. The fund can provide foreign exchange for small value imports with the object of procuring technical know- how, foreign consultancy service, drawings and designs. (i) Automatic Refinancing Sciieme: The main features of Automatic refinancing scheme are as follows: (a) Sanction and disbursement of refinance in respect of loans upto Rs. 5 lakhs from the eligible institutions to small scale industries including those in the tiny sector which are normally covered under the IDBI Credit Guarantee Scheme, (b) The IDBI will not levy commitment charges on credit institutions in respect of refinances under the ARS (c) Only one general agreement will be taken from the 146 CU IDOL SELF LEARNING MATERIAL (SLM)

eligible institution covering drawals of refinance under different schemes of the IDBI. (j) Rediscounting: IDBI has introduced a scheme for rediscounting of bills against the sale of machinery to enable the indigenous machine manufacturing industry to purchase equipment on deferred payment basis. Small Industries Development Bank of India (SIDBI): The SIDBI was set up in October 1989 under the act of Parliament as a wholly-owned subsidiary of IDBI. It is the principal financial institution for promotion, financing and development of Industries in the small scale sector. SIDBI also coordinate the activities of agencies which provide finance to small enterprises. In pursuance of the SIDBI (Amendment) Act 2000, 51.1 percent of the share of SIDBI held by IDBI have been transferred to select public sector banks, LIC, GIC, and other Institutions owned and controlled by the Control Government. The main objectives of SIDBI are to serve as the principal financial institution for promotion, financing and development of Industry in the small scale sector and coordinating the functions of other institutions engaged in similar activities. The Bank, right from its inception has strived to make effective use of the existing network of institutions serving the small scale sector. Further the bank has collaborated with various national and international development organisations to synergise the efforts in serving the small scale sector. The network of SIDBI consists of 5 regional offices (Appendix III) and 73 branches with its head office at Lucknow. It extends reliance assistance through 888 primary lending institutions such as commerical banks, SFCs which in turn have over 60,000 branches throughout India. SIDBI was ranked 21st in terms of assets, 34th in terms of capital among the 50 development banks of the world by 'The Banker', London in its May 1997 issue. The schemes of assistance of SIDBI for the small scale sector is through three routes. Indirect assistance, namely, refinance and bills rediscounting is channelised by SIDBI through a network of 888 primary lending institutions including banks and state financial corporafions which have over 65,000 outlets. While direct assistance is through its own network of 38 offices (5 regional and 73 branch offices) in India. Development and support services of SIDBI are focussed at enterprise promodon with emphasis on rural industrialization, HRD of small scale industry sector, technology upgradation, special emphasis programmes like quality and environment management and information dissemination. The programmes for enterprise promotion include microcredit schemes, rural industries programmes, Mahila Vikas Nidhi and entrepreneur development programmes. Programmes 147 CU IDOL SELF LEARNING MATERIAL (SLM)

for HRD of SSIs are Small Industries Management Assistance Programme (SIMPA) and Skill-cum Technology Upgradation Programmes (STUP). Quality and environment and management programmes and workshops on quality management technology and assistance to create awareness among the SSIs for abatement of environmental pollution and information dissemination aims at promoting new units by identification and publicity of viable project ideas and business opportunities through publication of project profiles, broadcasting, Udyog Sadhana-radio programmes and production of video films on various entrepreneurship themes and telecasting them through electronic media. SIDBI also coordinates its efforts with the non-government organisations (NGOs), marketing and training institutions, research organisations, etc., for effective reach. It a prate two funds. Small Industries Development Fund and Small Industries Development Assistance Fund. The operation of the farmed and national Equity Fund which were earlier looked after by the IDBI are now handled by the SIDBI. The financial assistance is channeled through the existing credit delivery system consisfing NSIC, SFCs, SIDCs, SSIDCs, commercial bank, Cooperative banks and RRBs. The total number of Institution eligible for assistance from SIDBI is 869. It discounts and reads counts bill assisting from the sale of machinery to small units extends seed/capital /soft loan assistance through National Equity Funds through seed capital scheme of specialized lending Institution, refinances loans and provides services like factoring, leasing & loan. Functions of Small Industries Development Bank of India (SIDBI): The major function undertaken by SIDBI are as following- (i) Refinancing of term loans granted by banks & other eligible financial institution namely SFCs and SIDCs. (ii) Direct discounting as well as rediscounting of bills arising out of sale of machinery or capital equipment by manufacturing in small Scale Sectors on deferred credit. (iii) Equity type assistance under National Equity Funds by way of seed capital to entrepreneurs. (iv) Rediscounting of short term bills arising out of sales of products of Small Scale Sector. (v) Resources Support to National Small Industries Corporation & institution concerned with small industries. (vi) Share capital & recourses support with small Industries. State Financial Corporations (SFCs): 148 CU IDOL SELF LEARNING MATERIAL (SLM)

The State Financial Corporation (SFCs) are state level financial institutions playing an important role in the development of small & medium enterprises in their respective state in tandem with nafional priorities. There are 18 SFCs at present. Seventeen (17) of them have been set up under State Financial Corporation Act 1951, by the respective state govt, as region of institution. The Tamil Nadu Industries Investment Corporation Ltd. set up in 1949 under companies Act as Madras Industrial Investment Corporation also function as SFC. They play an effective role in the development of small and medium enterprises and bringing about regionally balanced economic growth. Assistance Provide by SFCs: SFCs aim at wider dispersion of small scale industries within each state they meet term credit needs of such units. SFCs provide assistance to small scale industries by way of soft loans, direct subscription to equity share /debenture guarantees, discounting of bills of exchange and seed capital /special capital. Their main objectives are to finance and promote these industries in the state for achieving the balanced growth. The activities of SFCs were under the overall control and supervision of the IDBI and RBI till about 1990 after which the SIDBI and RBI have been performing the overseeing function. SFCs operate a number of schemes of refinance and equity type assistance on behalf of IDBI/SIDBI. Beside, they also have special scheme for artisans and special target groups such as SC/ ST women, ex-servicemen, physically handicapped etc. Over the year, they have diversified their activities and increased the scope and coverage of their assistance. The annual growth rates of their sanctions and disbursements have been quite high (13 to 45 percent) most of the year. Under the single window scheme of SIDBI, SFCs have also extending the working capital along with term loan to mitigate the difficulties faced by SSIs in obtaining the working capital limits on time. State Industrial Development Corporation (SIDCs): State Industrial Development Corporations were established under the Companies Act as wholly-owned undertaking of the state government, the SDCs acts as catalysts for Industrial development and provide impetus to investment in their respective states the first SIDC was established in Bihar in 1960. Besides SFCs there are 28 State Industrial Development Corporations (SIDCs) which promote states and also provide financial assistance to small scale units. Now there are 28 SIDCs in the country, these are in Andaman and Nicobar, Arunachal Pradesh, Goa, Mainpur, Meghalya, Mizorum, Nagaland, Tripura, Pondicherry and Sikkim ftinction as SFCs. 149 CU IDOL SELF LEARNING MATERIAL (SLM)

The main objectives of SIDCs are as follows. 1). To develop Industrial Areas. 2). To ensure Market Facilities. 3). To establish New Development Centres. State Industrial Development/ Investment Corporations (SIDCs/SUCs): The State Industrial Development Corporations are in the forefront of the industrialization in the state. SIDCs/SIICs were established under the Companies Act 1956 as wholly owned undertaking of the state government. They act as a catalyst for industrial development in their respective States. SIDCs provide land, infrastructure facilities like factory sheds, developed plots, roads, power, water supply, drainage and other amenities. SIDCs were set up mainly to cater to the financial requirements of medium and large-scale industries. But they also provide assistance to small-scale sector by way of term loan, subscription to equity and promotional services. State Small Industrial Development Corporations (SSIDCs): State Small Industrial Development Corporations (SSIDCs) were set up under the Companies Act 1956 as State Government undertakings. They are mainly concerned with the needs of small, tiny and village industries in the State/Union Territories. SSIDCs are operationally flexible and can undertake a variety of activities for the overall development of the SSIs sector. They provide assistance to small-scale sector and act as promotional agencies. The activities of SSIDCs are both assistance-oriented and promotional in nature. Other notable State level agencies that extend facilities for SSI promotion include: - State Infrastructure Development Corporation. - State Export Corporation. - State Cooperative Banks. - Regional Rural Banks. - Agro Industries Corporations. - Handloom and Handicraft Corporations. Small Industries Development Organization (SIDO): 150 CU IDOL SELF LEARNING MATERIAL (SLM)