Entrepreneurship and Start-Ups

1. Define entrepreneurship and it’s importance. Write three

competencies of an entrepreneur. Briefly explain four different types of
entrepreneurs.
=> Definition:
Entrepreneurship is the process of starting and managing a new
business to earn profit by taking financial risks and bringing innovation to
solve market needs.
Three Competencies of an Entrepreneur:
1. Risk-taking ability: Ready to face business uncertainties.
2. Decision-making skill: Makes timely and effective business
decisions.
3. Leadership: Leads and motivates team members to achieve goals.
4. Vision: The ability to see opportunities and plan for the future.
5. Adaptability: Ability to adjust to changing market conditions
and challenges.
Four Types of Entrepreneurs:
1. Innovative Entrepreneur – Focuses on new ideas, inventions, and
technologies.
2. Imitative Entrepreneur – Copies or improves existing
products/services.
3. Fabian Entrepreneur – Very cautious and adopts change slowly.
4. Drone Entrepreneur – Does not change business practices even if
outdated.
2. What are the differences between Intrapreneur and
Entrepreneur? Write a short note on Joint Stock Company.
Entrepreneur Intrapreneur

Starts and owns a business. Works within a company.

Takes full risk. Takes low or no personal risk.

Aims to build something new. Aims to improve existing work.

Uses own money and resources. Uses company resources.

Makes all decisions. Needs approval for decisions.

Keeps all profits. Gets salary and bonuses.

Builds own work culture. Works in company’s culture.

3. List down the legal requirements for establishing a new business.

What are the documents required for registration and incorporation?
=> Legal Requirements for Starting a Business:
1. Selection of business type (sole proprietorship, partnership,
company)
2. Registering the business with government authorities
3. Getting licenses and permits
4. Complying with tax laws (PAN, GST registration)
5. Opening a business bank account
Documents Required:
1. Memorandum of Association (MOA) – Describes objectives of the
business
2. Articles of Association (AOA) – Rules of internal management
3. Identity & address proof of directors
4. Digital Signature Certificate (DSC)
5. Incorporation application form (SPICe+)
4. Why feasibility study is required? Briefly explain different types of
feasibility study that an entrepreneur should do before a start-up. What
are the different approaches to generate business ideas?
=> Definition:
A feasibility study helps to check if a business idea is possible, practical,
and profitable before starting the business.
Why It Is Required:
1. To understand if the idea will work in real life.
2. To know the cost, profit, and chances of success.
3. To avoid loss by finding problems early.
4. To help in better planning and decision-making.
Types of Feasibility Study:
1. Technical Feasibility – Checks if required technology is available.
2. Economic Feasibility – Analyzes cost vs. expected returns.
3. Legal Feasibility – Ensures business follows laws and regulations.
4. Operational Feasibility – Checks if business can be run day-to-day.
5. Market Feasibility – Studies customer demand and competition.
Approaches to Generate Business Ideas:
1. Study market needs
2. Solve daily life problems
3. Improve existing products
4. Use personal skills or hobbies
5. Research and surveys
5. What are the different types of risks an entrepreneur might face?
Write three different types of start-up ventures and explain each of
them briefly.
=> Types of Risks:
1. Financial Risk – Losing invested money or poor cash flow
2. Market Risk – Low demand or strong competition
3. Operational Risk – Failures in daily operations or supply chain
4. Legal Risk – Lawsuits or compliance failures
5. Technology Risk – Technology not working or getting outdated
Types of Start-Up Ventures:
1. Lifestyle Start-Up – Created to support personal lifestyle goals (e.g.,
photography business)
2. Small Business Start-Up – Local businesses with limited reach (e.g.,
grocery store, bakery)
3. Scalable Start-Up – Starts small but has potential to grow large (e.g.,
tech companies like startups in Silicon Valley)

6. (i) What do you mean by USP of a product?

=> USP (Unique Selling Proposition) is a special feature or benefit that makes
a product different and better than competitors' products.
Explanation:
• USP tells customers why they should choose your product.
• It can be quality, price, design, speed, or customer service.
• Example: Domino’s USP – “30 minutes or free delivery.”
(ii) Write the challenges that are commonly faced by any start-ups.
Common Start-Up Challenges:
1. Lack of funds: Hard to get enough money to start or grow.
2. Finding customers: Tough to attract and retain buyers.
3. Strong competition: Big and old companies are already in the market.
4. Hiring skilled people: Difficult to get the right team.
5. Unclear business plan: Poor planning leads to failure.
6. Legal issues: Managing rules, licenses, and taxes is complex.
(iii) What is the full form of SWOT?
SWOT Full Form:
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats
It is a planning tool used to understand a business’s current position and
future potential.

7. What is pitch deck presentation?

Definition: A pitch deck is a short and clear presentation that explains a
business idea to investors, partners, or customers.
Explanation:
• It includes business overview, problem & solution, product, market,
financials, and team.
• Used to attract funding or support.
• Usually contains 10–12 slides.
• Must be simple, visual, and persuasive.

8. (i) What is MSME?

=> MSME (Micro, Small, and Medium Enterprises) are small businesses
defined by their investment in plant/machinery and annual turnover.
Explanation:
• MSMEs support local economy, job creation, and innovation.
• They are recognized by the Government of India under the MSMED Act.
(ii) What are the different types of MSME?
Types of MSME (as per Govt. of India):
1. Micro Enterprise – Investment ≤ ₹1 crore & turnover ≤ ₹5 crore.
2. Small Enterprise – Investment ≤ ₹10 crore & turnover ≤ ₹50 crore.
3. Medium Enterprise – Investment ≤ ₹50 crore & turnover ≤ ₹250 crore.
(iii) Why MSME registration is helpful for start-ups?
Benefits of MSME Registration:
1. Easy loans at low interest rates.
2. Government subsidies and schemes.
3. Tax exemptions and support in legal matters.
4. Faster approvals for licenses and tenders.

9. What is business exit strategy? List down four exit strategies. What is
initial public offering?
=> Business Exit Strategy – Definition:
An exit strategy is a plan for the owner to leave or sell the business in the
future, either to earn profit or reduce loss.
Four Exit Strategies:
1. Selling the business – To another company or buyer.
2. Mergers & acquisitions – Joining with or being bought by a larger
company.
3. Initial Public Offering (IPO) – Selling shares to the public.
4. Liquidation – Closing and selling assets.
What is IPO?
IPO (Initial Public Offering) is when a company sells its shares to the
public for the first time to raise money from the stock market.
10. Who is an entrepreneur?
=> An entrepreneur is a person who starts, manages, and grows a new
business by taking financial risks, with the aim of making a profit.
• An entrepreneur finds a new business idea.
• Organizes resources like money, people, and materials.
• Takes risks and faces challenges.
• Brings innovation and creates jobs.
Example:
Ritesh Agarwal (founder of OYO) is an entrepreneur who created a
successful hotel chain.
11. Difference between Entrepreneur and Manager (Short Table – Easy
for 4–6 Marks)

Entrepreneur Manager

Starts and owns the business. Works in the business.

Takes personal risk. Takes little or no risk.

Creates vision and goals. Follows set goals and plans.

Earns profit from business success. Gets a fixed salary.

Focuses on innovation and growth. Focuses on stability and efficiency.

Makes final decisions. Implements decisions.

12. Types of Ownership of Small Businesses. Explain each.

=> 1. Sole Proprietorship
• Definition: A business owned and managed by one person.
• Control: The owner takes all decisions alone.
• Liability: Unlimited; the owner is personally responsible for all debts.
• Taxation: Profit is taxed as personal income.
• Setup: Very easy and cheap to start.
• Lifespan: Ends if the owner dies or stops the business.

2. Partnership
• Definition: A business owned by two or more people who share
profit, loss, and responsibility.
• Control: Decisions are shared among partners.
• Liability: Usually unlimited for general partners.
• Taxation: Profit is divided and taxed as personal income of partners.
• Setup: Needs a Partnership Deed (legal agreement).
• Lifespan: Can continue if a partner leaves, depending on the
agreement.
3. Joint Stock Company (Public Limited) (★ Important)
• Definition: A company where shares are sold to the general public
and traded on the stock market.
• Control: Run by a board of directors; shareholders have voting rights.
• Liability: Limited to the amount invested in shares.
• Taxation: The company pays tax on profit; shareholders pay tax on
dividends.
• Setup: Requires registration under the Companies Act, strict legal
rules.
• Lifespan: Separate legal identity; continues even if shareholders
change or die.

4. Joint Stock Company (Private Limited) (★ Important)

• Definition: A company where shares are privately held (not traded in
stock market).
• Control: Managed by directors, usually family or close people.
• Liability: Limited to the shareholder’s investment.
• Taxation: Same as public company (corporate tax + dividend tax).
• Setup: Easier than public company; needs at least 2 and max 200
shareholders.
• Lifespan: Has a continuous existence, separate from owners.

5. Cooperative Society
• Definition: A group-owned business formed for mutual benefit (like
farmers, workers, etc.).
• Control: Democratic – one member, one vote.
• Liability: Limited liability for all members.
• Taxation: Profits distributed to members; tax rules vary.
• Setup: Needs at least 10 people and registration under cooperative
laws.
• Lifespan: Can exist long-term as long as members support it.
13. Functions of Entrepreneurs & Risks of an Entrepreneur
=> Functions of Entrepreneurs:
1. Idea Generation – Creates new business ideas or identifies market
gaps.
2. Resource Organization – Brings together money, people, and
materials.
3. Risk Taking – Takes financial and business risks.
4. Decision Making – Makes key business decisions.
5. Innovation – Brings new products, services, or methods.
6. Leadership – Leads and motivates team members.
Risks Faced by Entrepreneurs:
1. Financial Risk – Losing personal or borrowed money.
2. Market Risk – Low sales or poor demand.
3. Operational Risk – Problems in production or delivery.
4. Legal Risk – Issues related to licenses, taxes, or compliance.
5. Competitive Risk – Losing market to better competitors.

14. Advantages and Disadvantages of Intrapreneurship and

Entrepreneurship.
• Intrapreneurship

Advantages Disadvantages

Encourages innovation within a company. Limited freedom in decision-making.

Uses company resources and support. Success depends on management approval.

Less personal financial risk. Rewards may be limited (salary/bonus only).

Helps companies grow and stay competitive. Ideas may be rejected or delayed.

Provides job security even if the idea fails. No ownership of the business or innovation.
• Entrepreneurship

Advantages Disadvantages

Full control over business decisions. High personal financial risk.

High profit potential from business growth. Needs own capital for business setup and growth.

Creative freedom to try new ideas. No guaranteed income or job security.

Builds personal brand and recognition. Stress and responsibility for all business aspects.

Independent work style and decision- Risk of total business failure and loss of
making. investment.

15. Basic Characteristics of Partnership Firms

1. Two or More Owners – Formed by at least 2 people.
2. Agreement-Based – Governed by a partnership deed.
3. Profit Sharing – Partners share profit and loss as agreed.
4. Joint Management – Partners manage the business together.
5. Unlimited Liability – In general partnership, partners are personally
liable.
6. Mutual Trust – Success depends on cooperation and trust.
7. Flexible – Easy to form and dissolve compared to companies.

16. Difference Between Equity Funding and Debt Funding

Equity Funding Debt Funding

Money raised by selling company shares. Money borrowed as a loan.

No repayment needed, but shares are given. Must repay with interest.

Investors become part-owners. Lenders have no ownership.

Profit shared through dividends. Interest paid regardless of profit.

No burden of regular payment. Fixed repayment schedule required.

17. Difference Between Gross Profit and Net Profit:

Gross Profit Net Profit

Revenue minus cost of goods sold (COGS). Gross profit minus operating expenses, taxes, etc.

Indicates core business profitability. Shows overall profitability after all deductions.

Accounts for all costs, including interest and

Does not include operating costs or taxes.
taxes.

Formula: Sales - COGS Formula: Gross Profit - Expenses - Taxes - Interest

18. Things to Follow for a Good Marketing Plan

• Clear Objectives: Define specific, measurable goals for the marketing
campaign.
• Target Market: Identify and understand the audience you want to reach.
• Budget Allocation: Set a realistic budget for marketing activities.
• Marketing Strategies: Choose the right mix of channels (social media,
email, SEO, etc.).
• Competitive Analysis: Research competitors to identify market gaps and
opportunities.
• Timeline: Plan the marketing activities over a specific time period.
• Monitoring and Evaluation: Track performance and adjust strategies
accordingly.

19. What is Better Funding: Equity or Debt?

• Equity Funding: Ideal for start-ups with no collateral. Investors take
a risk but also share profits. It doesn’t require repayment, but
ownership is diluted.
• Debt Funding: Suitable for established businesses with stable cash
flow. It requires repayment with interest but doesn’t dilute
ownership.
Which is Better?
Equity funding is better for high-risk, early-stage start-ups with growth
potential, while debt funding is better for businesses with predictable
cash flow and the ability to repay loans.

20. How to Prepare a Project Report

• Executive Summary: Write a concise overview of the project’s
purpose, goals, and scope.
• Objectives and Goals: Define the project’s specific objectives and
expected outcomes.
• Market Analysis: Research and present relevant data and trends in
the industry.
• Operational Plan: Describe how the project will be executed,
including resources, timelines, and key activities.
• Financial Plan: Provide budget details, funding requirements, and
projected financial outcomes.
• Risk Analysis: Identify potential risks and mitigation strategies.
• Conclusion: Summarize the report and suggest the next steps for
implementation.

21. What is a Start-Up Business? Main Features of Start-Ups.

=> A start-up is a new business venture that is typically in the early stages
of development. It is created to bring an innovative product, service, or
solution to market and often aims for high growth and scalability.
Main Features of Start-Ups:
1. Innovation: New ideas or solutions.
2. Scalability: Potential for rapid growth.
3. Risk: High uncertainty and financial risk.
4. Limited Resources: Often rely on funding or personal savings.
5. Flexibility: Quick to adapt to changes.
6. Founders: Led by founders actively involved.
22. Legal Requirements and Compliance Needed for Establishing a Start-
Up
• Business Structure: Decide on the type of business entity (sole
proprietorship, partnership, LLC, etc.).
• Business Registration: Register the business with relevant local or
state authorities.
• Licensing and Permits: Obtain necessary licenses and permits based
on your industry.
• Tax Registration: Get a Tax Identification Number (TIN) or GST
registration for tax purposes.
• Trademark and Copyright: Protect the brand name, logo, or unique
product designs.
• Employment Laws: Adhere to labor laws, including contracts,
employee rights, and salaries.
• Health and Safety: Ensure compliance with safety regulations in the
workplace.
• Environmental Regulations: Follow environmental guidelines if your
business affects the environment.

23. Elements of a Pitch Deck:

1. Introduction: Overview of the business.
2. Problem: The problem the start-up solves.
3. Solution: How the start-up solves the problem.
4. Market Opportunity: Size and potential of the target market.
5. Business Model: How the start-up will make money.
6. Go-to-Market Strategy: Marketing and sales plans.
7. Financials: Projected revenue, expenses, and profit.
8. Team: Founders and key team members.
9. Funding: The amount of investment needed.
24. Types of Start-Ups and Types of Resources
Types of Start-Ups:
1. Tech Start-Ups: Focus on technology products or services.
2. E-commerce Start-Ups: Sell products or services online.
3. Social Start-Ups: Aim to solve social problems.
4. Product-based Start-Ups: Create physical or digital products.
5. Service-based Start-Ups: Offer services rather than products.
Types of Resources:
1. Human Resources: Skilled employees or team members.
2. Financial Resources: Capital for funding the business.
3. Physical Resources: Equipment, office space, and inventory.
4. Intellectual Resources: Patents, trademarks, or proprietary
technology.
5. Network Resources: Connections with industry professionals or
investors.

25. Basic Start-Up Problems Faced by Entrepreneurs

1. Funding Issues: Difficulty in securing enough capital.
2. Uncertainty and Risk: High risk of failure or losses.
3. Market Competition: Competing against established businesses.
4. Team Building: Finding the right talent and building a strong team.
5. Cash Flow Management: Ensuring steady cash flow for operations.
6. Legal and Compliance Issues: Navigating laws, taxes, and permits.
27. Manufacturing and Operations Plan
• Production Process: Define how products will be manufactured or
services provided.
• Resource Requirements: List the materials, tools, and human
resources needed.
• Location and Facilities: Decide on the location for manufacturing or
operations.
• Supply Chain Management: Identify suppliers, shipping methods, and
inventory systems.
• Quality Control: Implement checks and processes to ensure
product/service quality.
• Scalability: Plan for future growth and expansion in production
capacity.

28. Key Difference Between Angel Investors and Venture Capital

Angel Investors Venture Capital

Firms or groups that manage pooled funds

Individuals who invest their personal funds.
from investors.

Invest in more mature businesses with growth

Typically invest in early-stage start-ups.
potential.

Usually provide smaller amounts of funding. Provide larger amounts of funding.

They often have a personal interest in the More focused on financial returns and business
business. growth.

Angel investors may be involved in the Venture capitalists are often actively involved in
business but not always. decision-making.
23. Benefits of MSME Regulations for Start-Ups
1. Financial Support: Access to government schemes and loans with
low interest rates.
2. Tax Benefits: MSMEs may qualify for tax exemptions or reduced
rates.
3. Ease of Doing Business: Simplified procedures and registration
processes.
4. Subsidies: Availability of financial aids and grants from the
government.
5. Export Benefits: Assistance in exploring international markets and
export benefits.

24. What is Business Exit Strategy?

A business exit strategy is a plan that outlines how an entrepreneur will
sell, close, or otherwise leave their business. It ensures a smooth
transition and maximizes value.
Common Exit Strategies:
1. Selling the Business: Selling to another business or individual.
2. Merging: Combining with another company for mutual benefit.
3. Initial Public Offering (IPO): Selling shares of the company to the public
4. Liquidation: Selling off assets and closing the business.

25. Distinguish Between Assets and Liabilities of a Firm

Assets Liabilities

Resources owned by the business. Debts or obligations owed by the business.

Provide future economic benefits. Require future payments or settlement.

Examples: Cash, property, inventory. Examples: Loans, bills, accounts payable.

Help the business generate income. Must be repaid or fulfilled over time.

Can be sold or used to generate money. Represent money the business owes.
26. Different Problems and Challenges Faced by Start-Up Entrepreneurs
1. Funding Issues: Difficulty in raising enough capital for operations
and growth.
2. Market Competition: Facing competition from established
businesses.
3. Customer Acquisition: Building a customer base and maintaining
relationships.
4. Cash Flow Management: Managing expenses and income to avoid
running out of cash.
5. Talent Acquisition: Recruiting skilled employees on limited budgets.
6. Legal and Regulatory Compliance: Navigating complex laws and
regulations.
7. Scaling Challenges: Managing growth while maintaining quality and
service.

33. What is Bankruptcy?

Bankruptcy is a legal process where a person or business unable to pay
their debts can seek relief. It provides a way to either reorganize the debt
or liquidate assets to pay off creditors.
Key Points:
1. Individuals or Companies: Both can file for bankruptcy.
2. Types: Includes Chapter 7 (liquidation) and Chapter 11
(reorganization) in the U.S.
3. Outcome: Helps in reducing or eliminating debts, but impacts
creditworthiness.
4. Legal Protection: Provides protection from creditors while the
process is ongoing.
1. Managerial Function
• Definition: Managerial functions are tasks that help in planning,
running, and controlling a business effectively.
• Main Functions:
1. Planning – Setting goals and deciding how to achieve them.
2. Organizing – Arranging resources (people, tools, money).
3. Staffing – Hiring and managing employees.
4. Directing – Guiding and motivating employees.
5. Controlling – Checking progress and correcting mistakes.

2. Working Assets
• Definition: Assets used in day-to-day business operations.
• Examples:
o Cash – Used for payments.
o Inventory – Goods for sale or production.
o Accounts Receivable – Money expected from customers.
• Importance: Helps in maintaining smooth business flow and paying
short-term obligations.

3. Revenue
• Definition: Total income earned from selling products or services
before expenses are deducted.
• Formula:
Revenue = Price × Quantity Sold
• Also called: Sales or Top-line income.
• Example: If a company sells 100 items at ₹500 each, revenue is
₹50,000.
4. Funding Methods
• Definition: Different ways a start-up can raise money to start or
grow.
• Types:
1. Equity Funding – Selling shares to investors.
2. Debt Funding – Taking loans.
3. Bootstrapping – Using own savings.
4. Crowdfunding – Raising money from many people online.
5. Angel Investment – Investment from rich individuals.

5. HOF (Handicraft and Other Forms)

• Definition: A category of businesses under MSME that includes
handmade and traditional products.
• Examples: Pottery, embroidery, woodwork.
• Importance:
o Promotes rural employment.
o Preserves Indian heritage and craft.
o Helps local artisans earn a livelihood.

6. DIC (District Industries Centre)

• Definition: Government centers in each district that support small
businesses.
• Services Offered:
o Guidance on business start-up.
o Loan and subsidy support.
o Help in MSME registration and licensing.
• Goal: To promote local entrepreneurship and self-employment.
7. Tax Compliance
• Definition: Following government rules by correctly paying and
filing taxes.
• Includes:
o Registering for GST.
o Filing regular returns.
o Keeping business records.
• Why Important:
o Avoids penalties.
o Builds a trustworthy image.
o Required for business loans and tenders.

8. Cash Flow
• Definition: Movement of cash in (inflows) and out (outflows) of the
business.
• Positive Cash Flow: More money comes in than goes out – good
sign.
• Negative Cash Flow: More money goes out – may signal problems.
• Importance:
o Helps pay employees, bills, and suppliers.
o Keeps the business running smoothly.
9. Marketing
• Definition: Promoting and selling a product or service to customers.
• Main Activities:
1. Market Research – Understanding customer needs.
2. Product – What to offer.
3. Price – At what cost.
4. Place – Where to sell.
5. Promotion – How to advertise.
• Goal: To increase sales and brand awareness.

10. Accounting
• Definition: System of recording, classifying, and reporting a
business’s financial data.
• Functions:
o Track income and expenses.
o Prepare balance sheets and profit/loss statements.
o Help in tax filing and audits.
• Purpose:
o To check business health.
o To plan future budgets.
o To share reports with investors and banks.