Entrepreneurship and Small Business
Who an entrepreneur is
An entrepreneur spots an opportunity, assembles resources, bears risk and manages the venture. Functions: idea generation, feasibility analysis, arranging finance, organising production, marketing and adapting to change. A business plan sets out the product, market, operations, finance and risk.
MSME classification
Since 1 July 2020 classification uses both investment and turnover:
- Micro: investment up to ₹1 crore and turnover up to ₹5 crore.
- Small: investment up to ₹10 crore and turnover up to ₹50 crore.
- Medium: investment up to ₹50 crore and turnover up to ₹250 crore.
Both conditions must be satisfied. Registration is through Udyam, and services are covered as well as manufacturing.
Support ecosystem
Startup India (2016) gives DPIIT recognition, tax benefits and self-certification; PMEGP subsidises new micro-enterprises; MUDRA offers Shishu, Kishore and Tarun loans to small borrowers; SIDBI provides refinance. Assam has its own startup policy and industrial development agencies.
Worked example
A firm has plant investment of ₹8 crore and annual turnover of ₹40 crore. Reasoning: investment is under ₹10 crore and turnover under ₹50 crore, so it is a small enterprise. Had turnover risen to ₹60 crore it would no longer qualify.
Traps that cost marks
- Applying the old 2006 investment-only limits.
- Satisfying only one of the two criteria.
- Equating "startup" with "small enterprise"; they use different definitions.
- Forgetting that service enterprises are also MSMEs.