Entrepreneurship and Small Business: Role, Problems and Support Institutions (India) Questions

Question 1

Define entrepreneur.

Accepted Answer

An entrepreneur is a person who identifies business opportunities, organises resources, bears risk and starts and manages an enterprise.

Question 2

Define entrepreneurship.

Accepted Answer

Entrepreneurship is the process of starting and managing a new enterprise by converting an idea into a business through innovation, organisation of resources and risk-taking.

Question 3

State any one characteristic of an entrepreneur.

Accepted Answer

Risk-bearing ability is a characteristic of an entrepreneur because business outcomes are uncertain.

Question 4

State any one function of an entrepreneur.

Accepted Answer

Organising resources like finance, manpower and materials is a key function of an entrepreneur.

Question 5

State any one role of small business in India.

Accepted Answer

Small businesses generate large-scale employment with relatively low capital investment in India.

Question 6

State any one problem of small business.

Accepted Answer

Inadequate finance and difficulty in getting loans is a major problem of small businesses.

Question 7

Explain characteristics of an entrepreneur.

Accepted Answer

An entrepreneur is **innovative** and opportunity-oriented and is willing to take **risk and uncertainty**. He has **leadership and decision-making ability** to guide people and resources. He possesses **organising ability** to combine men, money, materials and machines and shows perseverance, adaptability and goal orientation to run the enterprise successfully.

Question 8

Explain functions of an entrepreneur.

Accepted Answer

An entrepreneur performs functions such as **identifying business opportunities**, preparing plans and feasibility studies, and **organising resources** like finance, manpower, technology and materials. He bears **risk**, introduces **innovation** in product/process/market, coordinates activities and takes important decisions. He also monitors and controls performance to achieve goals.

Question 9

Explain importance/role of small business in India.

Accepted Answer

Small business plays an important role by generating **employment** with low capital investment and promoting **entrepreneurship** and self-employment. It supports **balanced regional development** by establishing units in rural/semi-urban areas. Small units contribute to **industrial output and exports** and also support large industries as ancillary and supplier units, helping income distribution and poverty reduction.

Question 10

Explain major problems faced by small business in India.

Accepted Answer

Small businesses face **finance problems** such as inadequate capital, credit constraints and delayed payments. They face **raw material issues** like shortage, high cost and poor quality. They also face **marketing problems** due to weak distribution, limited branding and competition from large firms. Additionally, outdated technology, shortage of skilled manpower and infrastructure problems like power and transport affect productivity.

Question 11

Explain types of entrepreneurs.

Accepted Answer

Entrepreneurs can be **innovative** (introduce new products/technology), **imitative** (adopt innovations developed by others), **Fabian** (very cautious and slow to adopt change) and **drone** (resist change even when necessary). These types differ mainly in their attitude towards innovation and risk.

Question 12

Write a short note on support institutions for small business in India (broad).

Accepted Answer

Support institutions help small businesses through **entrepreneurship training and skill development**, advisory and consultancy services, assistance in **registration and compliance**, facilitation of **credit and subsidies**, and provision of infrastructure through industrial estates and incubation centres. They also provide marketing and export guidance, quality certification support and technology upgradation assistance.

Question 13

Define entrepreneur and entrepreneurship. Explain functions of an entrepreneur and its importance in economic development.

Accepted Answer

An entrepreneur is a person who identifies business opportunities, organises resources, bears risk and starts and manages an enterprise. Entrepreneurship is the process of converting an idea into a business through innovation, planning, organisation of resources and risk-taking.

**Functions of an entrepreneur:** An entrepreneur identifies opportunities and generates business ideas. He conducts feasibility studies and prepares plans. He arranges and organises resources such as finance, manpower, materials and technology. He bears risks and uncertainty and takes key decisions. He introduces innovation in product, process, market or methods and coordinates and leads employees. He also controls operations and monitors performance to achieve objectives.

**Importance in economic development:** Entrepreneurship is crucial for development because it creates **employment** and promotes self-employment. Entrepreneurs introduce **innovation**, improve productivity and create new products and services. They increase **industrial output**, generate income and contribute to GDP and tax revenue. Entrepreneurship promotes balanced regional development by setting up units in different areas and supports exports and competitiveness. Therefore, entrepreneurs act as a driving force for growth and modernization of the economy.

Question 14

Explain the role of small business/MSMEs in India. Discuss problems faced by small businesses.

Accepted Answer

**Role of small business/MSMEs in India:** Small businesses are important because they generate large-scale employment with relatively low capital investment. They encourage entrepreneurship and self-employment and support inclusive growth. MSMEs contribute significantly to industrial production and exports and act as ancillary units supplying components and services to large industries. They promote balanced regional development by establishing units in rural and semi-urban areas and help in better income distribution and poverty reduction.

**Problems faced by small businesses:** The major problems include inadequate finance and difficulty in obtaining credit, high interest burden and delayed payments from buyers. Small units face raw material shortages, high cost and quality issues. Marketing problems include weak distribution channels, lack of branding and intense competition from large firms and imports. Many units use outdated technology and have shortage of skilled manpower, resulting in low productivity. Infrastructure constraints like power shortages, transport issues and lack of workspace also affect operations. Compliance burden and paperwork further increase cost and difficulty.

Thus, small businesses contribute greatly but need support in finance, technology, marketing and infrastructure to perform better.

Question 15

Explain types of entrepreneurs and describe the assistance/support available to small businesses in India (overview).

Accepted Answer

**Types of entrepreneurs:** Innovative entrepreneurs introduce new products and technologies and create new markets. Imitative entrepreneurs adopt and improve innovations developed by others. Fabian entrepreneurs are cautious and adopt change slowly. Drone entrepreneurs resist change and continue old methods even when change is necessary. Entrepreneurs may also be classified as small business entrepreneurs, social entrepreneurs and technology/startup entrepreneurs based on the nature of enterprise.

**Support to small businesses in India (overview):** Small businesses receive support through MSME-related agencies and programmes that provide entrepreneurship development training, skill development and advisory services. Financial assistance is provided through banks and financial institutions via priority sector lending, credit guarantee support, microfinance and subsidy schemes. Infrastructure support is provided through industrial estates, clusters and incubation centres with common facilities. Marketing support includes participation in trade fairs, e-marketplace access and export promotion guidance. Technology upgradation support, quality certification and digitalisation assistance also help improve competitiveness.

Therefore, support institutions and government measures aim to strengthen small businesses by reducing constraints of finance, technology, marketing and infrastructure.

Entrepreneurship and Small Business: Role, Problems and Support Institutions (India)

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