Year: 2020

Change can be successfully exploited by talented entrepreneurs and turned to a major opportunity for generating ideas and practices for the development of different products and services. The most innovative creations have come to life as a result of change or seeking of change as a way to improve, solve a problem or prevent one from occurring. Entrepreneurs must always look for the opportunities that inspire innovation as a great way to grow their businesses, make a difference and become the leaders in their niche.

The real entrepreneurs create businesses that are built on innovative ideas and provide products and services different than the rest available on the market. Innovation is what separates the true entrepreneurs and the business owners of new ventures that are also taking risk, but are not doing anything that hasn’t been done before. Existing companies must embrace the change of the business environment and adjust and gear up to these changes in order to not only survive, but also grow through innovation.

The value

It is important for entrepreneurs to understand the difference between innovation and creating new products. Novelty is not always enough if you are not creating products and services that truly make a difference and bring value to the customers. Changes are great source of opportunity to do new things, try different approaches and be creative, but, most importantly, it brings great opportunity to understand better the need of the customers and deliver to them the products that they want to have or even better the products that they don’t know they want yet. By bringing value, you are making a difference and making a difference is what separates successful startups from the unsuccessful ones.

The power of forward thinking

Entrepreneurs must look hereafter and lead their companies in a way that encourages innovation that will change and shape the future. If the entrepreneurs focus solely on their current business situation and linger to innovate, they are doomed to fail. The power of forward thinking and leadership that inspires innovation is what can shape the future of a company. You fail to innovate you fail to grow and eventually your business becomes obsolete.

The strategy

Entrepreneurs, who are looking forward and believe in the power of innovation, believe in strategizing as they understand the importance of having clear vision about the future of the company and detailed action plan, dedicated to the development of innovative products. The business world is constantly changing technology is disrupting almost every industry and businesses that are here to stay must create strategies to help them bring value to the customers, stay competitive and grow.

Observation + solution + vision

The entrepreneur is observing a real need or problem, creating the solution to solve this problem and imagining a changed world for the better.

He or she is born with or develop a special set of skills and abilities: perseverance and passion for long-term goals, courage, risk taking, shaping the future while encouraging diversity.

The entrepreneur’s passion is the engine pushing him through challenges, setbacks and struggles to achieve his purpose and to change the world according to his vision.

Secret to turning change into opportunity?

See into the future

WMACs are better able to anticipate change, and the opportunity that comes with it. They think ahead and embrace change when it inevitably comes. A strong guiding vision helps them seize only the right opportunities, so they don’t lose focus or spread themselves too thin.

Move fast, change faster

These organizations need to respond quickly to market opportunities so they can get there first. They anticipate what skills they’ll need in the future, and rapidly respond to fill in any gaps. This future-facing, responsive strategy is designed for innovation and efficiency, regardless of size.

Get flexible

WMACs think in terms of skills rather than positions. Dynamic, cross-functional teams put the right expertise in the right place at the right time, with everyone aligned to a common purpose. This flexible working style creates flexible thinkers, people prepared to make bold decisions.

Take more chances

Promoting and sustaining a culture of agility depends on how an organization responds to failure. It pays to be bold, even in the face of inevitable setbacks. By empowering people to take risks without fear of adverse consequences, WMACs drive innovation, learning, and development.

Your industry is changing, increasingly fast. That’s either a risk to your organization, or an opportunity to be seized. It all depends on your approach. Korn Ferry provides end-to-end support to organizations that want to transform their business. We can help guide your business through each critical step towards your growth and evolution.

The World’s Most Admired Companies [WMACs]. One thing that many of these highly successful organizations have in common is their ability to change, despite their size. This organizational agility gives them an unbeatable competitive advantage. For them, success doesn’t happen in spite of change, it happens as a result of it.

WMACs are engineered to evolve. Their adaptability is driven by their readiness to take risks in order to seize an opportunity. These are businesses that say ‘yes’.

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the work flow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing.

A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they on board? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Ownership

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Management

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

Board

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similarly to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together a business plan.

Characteristics of Organizational Analysis

Important aspects of organizational analysis include the assessment of external elements that can influence the performance of an organization. An organizational analysis also includes strategically evaluating an organization’s potential and resource base.

Internal weaknesses and strengths, together with external threats and opportunities, determine the success of an entity. For this reason, SWOT analysis is an important part of organizational analysis. It is used by businesses to assess their performance and establish goals or objectives.

1. Strengths

The competitive edge that an organization enjoys over its competitors is an advantage that defines its success. Assessing the strengths of an organization involves evaluating management, workforce, resources, as well as current marketing goals. In general, an internal analysis looks at an entity’s core competencies and resources.

Defining the capability of an organization helps the management team to make sound decisions as they formulate long-term objectives. Other important aspects of an internal analysis include looking at financial objectives, strategic planning, and operational structure.

2. Weaknesses

Weaknesses are obviously an aspect of an organization that can affect its performance. Recognizing weaknesses is important, as it enables the organization to locate problems and implement beneficial changes. In addition, the organization is able to develop appropriate choices in its strategic planning process, especially when results are not satisfactory.

Potential weaknesses include low morale, poor leadership, poor financials, obsolete technology, and inefficient functions. An example of a turnaround would be an organization, which previously experienced poor cost control, working hard to manage costs.

3. Opportunities

Generally, an external analysis weighs the threats and opportunities that are present outside of an organization. An external assessment includes sizing up the competition, analyzing market trends, and evaluating the impact of technology on the performance of an organization. When looking at external opportunities, an organization needs to identify current trends in the market, as well as weaknesses and gaps in the market that it can come in and fill.

An entity also needs to consider technological changes as an opportunity. Innovation helps to create opportunities for business. Therefore, organizations that set themselves apart in terms of their efficient use of available technology are capable of becoming leaders in their respective industries.

4. Threats

Not all threats are detrimental to the success of a business. For instance, labor can be a threat or an opportunity, depending on the prevailing economic conditions. Legislation and regulations set by the government also exert an effect on how well an organization performs in its industry.

To succeed in a competitive environment, an organization needs to learn to cope and embrace change as it happens.

Models of Organizational Analysis

Organizational analysis helps businesses succeed in a dynamic business environment. For that reason, an entity needs to understand its model. Business modeling is a key parameter in the process of organizational analysis. Models explain how a business functions and the changes they experience, so that they can reach their desired level of performance.

There are four different models that organizations commonly work with. The first model is the rational model. Its philosophy is that there is only one logical way to perform tasks. An alternative model is the natural model, which believes that a business not only wants to achieve its own goals, but also positively influence its external environment.

Socio-technical is the third model. According to the socio-technical model, businesses are evolving on a continuous basis. Change is made each time employee expectations are altered because of collaborating with fellow employees.

The last one is the cognitive model. This model places great emphasis on tasks done by the business team. A lot of attention goes toward the division and coordination of tasks among employees.

Benefits of Organizational Analysis

Organizational analysis offers many benefits to a business. For one, it helps businesses improve on their weaknesses. Understanding how a business functions helps to shed light on areas of weakness that may only require simple changes to spur growth. An organizational analysis helps businesses find innovative ideas, such as new ways to structure objectives so that employees are more productive.

Businesses seeking a competitive edge can benefit from undertaking an organizational analysis. The information generated from an organizational analysis will help an entity understand what it needs to do in order to turn itself into a more successful, profitable venture. Whether the business is new or old, an organizational analysis can help owners and managers achieve a better understanding of their business.

Scope of Business plan

The setting of objectives is a decision-making process that reflects the aims of the entire organization. Generally, it begins at the top with a clear statement of the organization’s purpose. If well communicated and clearly defined down through the hierarchy, this statement becomes the basis for short-range objectives in the annual budget.

Management articulates the overall goals to and throughout the organization in order to coordinate all business activities efficiently and effectively. It does this by:

1. Formulating and distributing a clear, concise statement of the central purpose of the business
2. Leading in the formulating of long-range organizational goals
3. Coordinating the activities of each department and division in developing derivative objectives
4. Ensuring that each subdivision participates in the budget process
5. Directing the establishment of short-term objectives through constructing the annual budget
6. Evaluating actual results on the basis of the plans

The organization must know why it exists and how its current business can be profitable in the future. Successful businesses define themselves according to customer needs and satisfaction with products and services.

Management identifies the customers, their buying preferences, product sophistication, geographical locations, and market level. Analyzing this data in relation to the expected business environment, management determines the future market potential, the economic variables affecting this market, potential changes in buying habits, and unmet needs existing now and those to groom in the future.

In order to synchronize interdepartmental planning with overall plans, management reviews each department’s objectives to ensure that they are subordinate to the objectives of the next higher level.

Management quantifies objectives by establishing goals that are: specific and concrete, measurable, time-specific, realistic and attainable, open to modification, and flexible in their adaptation.

Because goals are objective-oriented, management generally lists them together. For example:

1. Profit objectives state performance in terms of profits, earnings, return on investments, etc. A goal might call for an annual increase in profits of 15 percent for each of the next five years.
2. Human resources. This broad topic includes training, deployment, benefits, work issues, and qualifications. In an architectural consulting firm, management might have a goal of in-house CAD training for a specified number of hours in order to reach a certain level of competence.
3. Customer service. Management can look at improvements in customer service by stating the number of hours or the percentage of complaints it seeks to reduce. The cost or cost savings are stated in dollar terms. If the business sells service contracts for its products, sales goals can be calculated in percentage and dollar increases by type and level of contract.
4. Social responsibility. Management may desire to increase volunteerism or contributions to community efforts. It would calculate the number of hours or dollars within a given time frame.

Evaluating proposed plans

Management undertakes a complete review and evaluation of the proposed strategies to determine their feasibility and desirability. Some evaluations call for the application of good judgment—the use of common sense. Others use sophisticated and complex mathematical models.

Prior to directing the development of a profit budget for the upcoming annual period, management resolves issues related to the internal workings of the organization from a behavioral point of view. For example:

• Ensuring managerial sophistication in the application of the plans
• Developing a realistic profit plan, and assigning adequate responsibility and control
• Establishing appropriate standards and objectives
• Communicating the attitudes, policies, and guidelines to operational and administrative personnel
• Attaining managerial flexibility in the execution of the plans
• Evaluating and updating the system to harmonize with the changing operational and business environments

Stating actions and resources required

With the objectives and forecasts in place, management decides what actions and resources are necessary in order to bring the forecast in line with the objectives. The basic steps management plans to take in order to reach an objective are its strategies.

Strategies exist at different levels in an organization and are classified according to the level at which they allocate resources. The overall strategy, often referred to as the grand strategy, outlines how to pursue objectives in light of the expected business environment and the business’s own capabilities. From the overall strategy, managers develop a number of more specific strategies.

• Corporate strategies address what business(es) an organization will conduct and how it will allocate its aggregate resources, such as finances, personnel, and capital assets. These are long-term in nature.
• Growth strategies describe how management plans to expand sales, product line, employees, capacity, and so forth. Especially necessary for dynamic markets where product life cycles are short, growth strategies can be (a) in the expansion of the current business line, (b) in vertical integration of suppliers and end-users, and (c) in diversifying into a different line of business.
• Stability strategies reflect a management satisfied with the present course of action and determined to maintain the status quo. Successful in environments changing very slowly, this strategy does not preclude working toward operational efficiencies and productivity increases.
• Defensive strategies, or retrenchment, are necessary to reduce overall exposure and activity. Defensive strategies are used: to reverse negative trends in profitability by decreasing costs and turning around the business operations; to divest part or all of a business to raise cash; and to liquidate an entire company for an acceptable profit.
• Business strategies focus on sales and production schemes designed to enhance competition and increase profits.
• Functional strategies deal with finance, marketing, personnel, organization, etc. These are expressed in the annual budget and address day-to-day operations.

Value of Business plan

A business plan is critical to the success of any business. And, if the plan is frequently reviewed and updated, it becomes increasingly valuable over time. It provides valuable historical information to help a business owner make decisions on the future direction of the company. Effective business planning will enable the owner to both maximize profits and maximize the value of the company.  If the exit strategy of the owner is to sell the business, effective business planning during the life of the business will contribute to successfully selling the business at the best possible price.

What Information is Included in a Business Plan?

The information included in a business plan is also of great interest to a prospective buyer who is evaluating the business as a possible acquisition. Some of the major business areas that should be included in a business plan that would also be of interest to a buyer include the following:

–        Mission Statement and Company Philosophy

–        Company History

–        Short term and long term revenue and profit goals

–        Organizational structure

• Current Organization
• Organizational growth plan
• Employee development

–        Marketing

• Target market
• Major accounts and/or markets
• Sales and marketing strategies
• Competition

–        Operations

• Current processes
• Planned and proposed changes to operations

–        Product and\or service lines

–        Documented history of key successes and failures during the life of the business

Complete and accurate books and records are essential for the successful sale of any business. Typically, a buyer’s first exposure to the confidential details of a business comes in the form of a comprehensive document covering the financial and operational aspects of the business. Presenting buyers with the details contained in a good business plan will make a great first impression and can shorten the time it takes to close the sale. Providing buyers with extensive details upfront can shorten the buyer’s evaluation and due diligence process.

The growth potential of a business is usually a huge factor in a buyer’s decision to acquire that business. Potential can be difficult to prove, but a well-documented business plan can give a buyer a comfortable level of understanding about the potential opportunities and challenges for the business in the future.

A business owner’s claims about potential are sometimes discounted by buyers, unless those claims are supported by the type of in-depth historical and current data that is included in a good business plan. A business plan not only helps to prove potential; it also provides the buyer with several ideas on a possible road map on how to achieve that potential.

The first time business owner will sometimes experience anxiety over their ability to successfully manage a business, even though they may be highly qualified. A business plan should help to relieve that anxiety.  The plan not only provides valuable information on how to manage a business, but also enables the buyer to benefit from the years of experience of the previous owner. The new owner can see a history of both successes and failures in the business, and they will benefit from the lessons learned by the previous owner.

Operations and Management

The operations and management component of your plan is designed to describe how the business functions on a continuing basis. The operations plan highlights the logistics of the organization, such as the responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial Components of Your Business Plan

After defining the product, market and operations, the next area to turn your attention to are the three financial statements that form the backbone of your business plan: the income statement, cash flow statement, and balance sheet.

The income statement is a simple and straightforward report on the business’ cash-generating ability. It is a scorecard on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result, which is either a profit or loss. In addition to the income statements, include a note analyzing the results. The analysis should be very short, emphasizing the key points of the income statement. Your CPA can help you craft this.

The cash flow statement is one of the most critical information tools for your business, since it shows how much cash you’ll need to meet obligations, when you’ll require it and where it will come from. The result is the profit or loss at the end of each month and year. The cash flow statement carries both profits and losses over to the next month to also show the cumulative amount. Running a loss on your cash flow statement is a major red flag that indicates not having enough cash to meet expenses-something that demands immediate attention and action.

The cash flow statement should be prepared on a monthly basis during the first year, on a quarterly basis for the second year, and annually for the third year. The following 17 items are listed in the order they need to appear on your cash flow statement. As with the income statement, you’ll need to analyze the cash flow statement in a short summary in the business plan. Once again, the analysis doesn’t have to be long and should cover highlights only. Ask your CPA for help.

The last financial statement you’ll need is a balance sheet. Unlike the previous financial statements, the balance sheet is generated annually for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas: assets, liabilities and equity.

Balance sheets are used to calculate the net worth of a business or individual by measuring assets against liabilities. If your business plan is for an existing business, the balance sheet from your last reporting period should be included. If the business plan is for a new business, try to project what your assets and liabilities will be over the course of the business plan to determine what equity you may accumulate in the business. To obtain financing for a new business, you’ll need to include a personal financial statement or balance sheet.

In the business plan, you’ll need to create an analysis for the balance sheet just as you need to do for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points.

Supporting Documents

In this section, include any other documents that are of interest to your reader, such as your resume; contracts with suppliers, customers, or clients, letters of reference, letters of intent, copy of your lease and any other legal documents, tax returns for the previous three years, and anything else relevant to your business plan.

Some people think you don’t need a business plan unless you’re trying to borrow money. Of course, it’s true that you do need a good plan if you intend to approach a lender–whether a banker, a venture capitalist or any number of other sources–for startup capital. But a business plan is more than a pitch for financing; it’s a guide to help you define and meet your business goals.

Just as you wouldn’t start off on a cross-country drive without a road map, you should not embark on your new business without a business plan to guide you. A business plan won’t automatically make you a success, but it will help you avoid some common causes of business failure, such as under-capitalization or lack of an adequate market.

As you research and prepare your business plan, you’ll find weak spots in your business idea that you’ll be able to repair. You’ll also discover areas with potential you may not have thought about before–and ways to profit from them. Only by putting together a business plan can you decide whether your great idea is really worth your time and investment.

Development of Women Entrepreneurs

Right efforts on all areas are required in the development of women entrepreneurs and their greater participation in the entrepreneurial activities.  Following efforts can be taken into account for effective development of women entrepreneurs.

1. Consider women as specific target group for all developmental programmes.
2. Better educational facilities and schemes should be extended to women folk from government part.
3. Adequate training programmes on management skills to be provided to women community.
4. Encourage women’s participation in decision-making.
5. Vocational training to be extended to women community that enables them to understand the production process and production management.
6. Skill development to be done in women’s polytechnics and industrial training institutes. Skills are put to work in training-cum-production workshops.
7. Training on professional competence and leadership skill to be extended to women entrepreneurs.
8. Training and counselling on a large scale of existing women entrepreneurs to remove psychological causes like lack of self-confidence and fear of success.
9. Counselling through the aid of committed NGOs, psychologists, managerial experts and technical personnel should be provided to existing and emerging women entrepreneurs.

• Continuous monitoring and improvement of training programmes.
• Activities in which women are trained should focus on their marketability and profitability.
• Making provision of marketing and sales assistance from government part.
• To encourage more passive women entrepreneurs the Women training programmes should be organized that taught to recognize her own psychological needs and express them.
• State finance corporations and financing institutions should permit by statute to extend purely trade related finance to women entrepreneurs.
• Women’s development corporations have to gain access to open-ended financing.
• The financial institutions should provide more working capital assistance both for small scale venture and large scale ventures.
• Making provision of micro credit system and enterprise credit system to the women entrepreneurs at local level.
• Repeated gender sensitization programmes should be held to train financiers to treat women with dignity and respect as persons in their own right.
• Infrastructure, in the form of industrial plots and sheds, to set up industries is to be provided by state run agencies.
• Industrial estates could also provide marketing outlets for the display and sale of products made by women.
• A Women Entrepreneur’s Guidance Cell set up to handle the various problems of women entrepreneurs all over the state.
• District Industries Centers and Single Window Agencies should make use of assisting women in their trade and business guidance.
• Programmes for encouraging entrepreneurship among women are to be extended at local level.
• Training in entrepreneurial attitudes should start at the high school level through well-designed courses, which build confidence through behavioural games.
• More governmental schemes to motivate women entrepreneurs to engage in small scale and large-scale business ventures.
• Involvement of Non Governmental Organizations in women entrepreneurial training programmes and counselling.

Problems of Women Entrepreneurs in India/Challenges faced by Women Entrepreneurs

Women in India have faced many problems to get ahead their life in business. Women entrepreneurs face a series of problems right from the beginning till the enterprise functions. The problems of Indian women pertains to her responsibility towards family, society and work.

The traditions, customs, socio cultural values, ethics, motherhood, physically weak, feeling of insecurity etc. are some peculiar problems that the Indian women are coming across while they jump into entrepreneurship.

Women in rural areas have to suffer still further. They face tough resistance from men. They are considered as helpers. The attitude of society towards her and constraints in which she has to live and work are not very conducive.

Besides the above basic problems the other problems faced by women entrepreneurs are as follows:

1. Family ties

Women in India are very emotionally attached to their families. They are supposed to attend to all the domestic work, to look after the children and other members of the family. They are over burden with family responsibilities like extra attention to husband, children and in laws, which take away a lots of their time and energy. In such situation, it will be very difficult to concentrate and run the enterprise successfully.

2. Male dominated society

Even though our constitution speaks of equality between sexes, male chauvinism is still the order of the day. Women are not treated equal to men. Their entry to business requires the approval of the head of the family. Entrepreneurship has traditionally been seen as a male preserve. All these put a break in the growth of women entrepreneurs.

3. Lack of education

Women in India are lagging far behind in the field of education. Most of the women (around sixty per cent of total women) are illiterate. Those who are educated are provided either less or inadequate education than their male counterpart partly due to early marriage, partly due to son’s higher education and partly due to poverty. Due to lack of proper education, women entrepreneurs remain in dark about the development of new technology, new methods of production, marketing and other governmental support which will encourage them to flourish.

4. Social barriers

The traditions and customs prevailed in Indian societies towards women sometimes stand as an obstacle before them to grow and prosper. Castes and religions dominate with one another and hinders women entrepreneurs too. In rural areas, they face more social barriers. They are always seen with suspicious eyes.

5. Shortage of raw materials

Neither the scarcity of raw materials nor availability of proper and adequate raw materials sounds the death-knell of the enterprises run by women entrepreneurs. Women entrepreneurs really face a tough task in getting the required raw material and other necessary inputs for the enterprises when the prices are very high.

6. Problem of finance

Women entrepreneurs have  to struggle a lot in raising and meeting the financial needs of the business. Bankers, creditors and financial institutes are not coming forward to provide financial assistance to women borrowers on the ground of their less credit worthiness and more chances of business failure. They also face financial problem due to blockage of funds in raw materials, work-in-progress finished goods and non-receipt of payment from customers in time.

7. Tough competition

Usually women entrepreneurs employ low technology in the process of production. In a market where the competition is too high, they have to fight hard to survive in the market against the organized sector and their male counterpart who have vast experience and capacity to adopt advanced technology in managing enterprises

8. High cost of production

Several factors including inefficient management contribute to the high cost of production, which stands as a stumbling block before women entrepreneurs. Women entrepreneurs face technology obsolescence due to non-adoption or slow adoption to changing technology, which is a major factor of high cost of production.

9. Low risk-bearing capacity

Women in India are by nature weak, shy and mild. They cannot bear the amount risk which is essential for running an enterprise. Lack of education, training and financial support from outsides also reduce their ability to bear the risk involved in an enterprises.

10. Limited mobility

Women mobility in India is highly limited and has become a problem due to traditional values and inability to drive vehicles. Moving alone and asking for a room to stay out in the night for business purposes are still looked upon with suspicious eyes. Sometimes, younger women feel uncomfortable in dealing with men who show extra interest in them than work related aspects.

11. Lack of entrepreneurial aptitude

Lack of entrepreneurial aptitude is a matter of concern for women entrepreneurs. They have no entrepreneurial bent of mind. Even after attending various training programmes on entrepreneur ship women entrepreneurs fail to tide over the risks and troubles that may come up in an organizational working.

12. Limited managerial ability

Management has become a specializedjob which only efficient managers perform. Women entrepreneurs are not efficient in managerial functions like planning, organizing, controlling, coordinating, staffing, directing, motivating etc. of an enterprise. Therefore, less and limited managerial ability of women has become a problem for them to run the enterprise successfully.

13. Legal formalities

Fulfilling the legal formalities required for running an enterprise becomes an upheaval task on the part of an women entrepreneur because of the prevalence of corrupt practices in government offices and procedural delays for various licenses, electricity, water and shed allotments. In such situations women entrepreneurs find it hard to concentrate on the smooth working of the enterprise.

14. Exploitation by middle men

Since women cannot run around for marketing, distribution and money collection, they have to depend on middlemen for the above activities. Middlemen tend to exploit them in the guise of helping. They add their own profit margin, which result in less sales and lesser profit.

15. Lack of self-confidence

Women entrepreneurs because of their inherent nature, lack of self-confidence, which is essentially a motivating factor in running an enterprise successfully. They have to strive hard to strike a balance between managing a family and managing an enterprise. Sometimes she has to sacrifice her entrepreneurial urge in order to strike a balance between the two.

The degree to which social entrepreneurs pursue social impact as opposed to profitability vary, but in all cases financial sustainability is fundamental. One approach is to create business models revolving around low-cost products and services to resolve social problems. The objective is to create a social benefit that is not limited by personal gain. Social Entrepreneurship is the process of bringing about social change on a major and more effective scale than a traditional Non-Governmental Organisation (NGO). They differ from NGOs in that they aim to make broad-based, long-term changes, instead of small-scale and time-limited changes. Furthermore, a NGO raises funds through events, activities and sometimes products. However, raising money takes time and energy, which could be spent in direct working and marketing processes. Above all, Social Entrepreneurs consider the affected people as part of the solution and not as passive beneficiaries.

The key role of India in Social Entrepreneurship

Some wellknown Indians became aware of the potential of Social Entrepreneurship quite early. Two of them were the Social Entrepreneurs Dr. Govindappa Venkataswamy and Thulasiraj D Ravilla who established the Aravind Eye Hospital in 1976. Since then, they have treated more than 2.4 million patients, often free of charge. Many others have also contributed to the comparatively high levels of Social Entrepreneurship which have been reached in India.

As the Swiss Klaus Schwab, founder of the World Economic Forum and of the Schwab Foundation, pointed out in an interview with the Hindustan Times: “India has some of the most advanced and innovative social entrepreneurs. We believe and already see that many of the models developed in India, for instance rainwater harvesting for schools pioneered by Barefoot College, are exported around the world.” Thus, India is a key country in developing social entrepreneurs. Several institutions help people to become involved with Social Entrepreneurship, such as UnLtd India and the National Social Entrepreneurship Forum (NSEF).

Furthermore, the Schwab Foundation and its Indian counterpart, the Jubilant Bhartia Foundation, give the Social Entrepreneurship Award to prominent visionary Indian social entrepreneurs. In 2009, the winners of the Social Entrepreneur of the Year Award included Brij Kothari of “Planet Read and Bookbox” who found to combat illiteracy, Padmanabha Rao and Rama Rao of “River” which focused on the primary education of children and Rajendra Joshi of “Saath” who created inclusive societies by empowering India’s urban and rural poor. The next winner will be announced in a ceremony coinciding with the India Economic Summit in November 2010.

Another important organisation that is linked to India is Ashoka, which is the global association of the world’s leading social entrepreneurs. Since 1981, they have elected over 2.000 leading social entrepreneurs as Ashoka Fellows, providing them with living stipends, professional support and access to a global network of peers in more than 60 countries. India is home to Ashoka’s first Fellow and for the past 25 years, India has served as a testing ground for most of Ashoka’s international Fellowship building programs and other key initiatives. Since 2003, Ashoka and the American India Foundation (AIF) have partnered to co-invest in social entrepreneurs in India. This partnership has enabled Ashoka to increase the number of Fellows elected in India to 250.

AIF is a leading international development organisation charged with the mission of accelerating social and economic change in India. Since 2001, it has raised over 30 million US-Dollars and awarded grants to education, livelihood, and public health projects in India with an emphasis on elementary education, women’s empowerment and HIV/AIDS.

Increase in Microfinancing

In particular, the field of microfinance is a growing one. The Bhartiya Samruddhi Investments and Consulting Services (BASIX) founded by Vijay Mahajan was the first microfinance project to lend to the poor. Vikram Akula is another founder of a successful Indian microfinance project. His organisation “SKS Microfinance” offers microloans and insurance to poor women in impoverished areas of India. SKS is currently one of the largest and fastest growing microfinance organisations in the world. Furthermore, the Bangladeshian Grameen Bank shall be mentioned as an outrider in the field of microfinance. As Anna Agarwal of the Massachusetts Institute of Technology pointed out, banking and finance are the biggest beneficiaries of technology-enabled social start-ups.

There are three reasons why microfinancing is so important for the poor: Firstly, they don’t possess money to open a bank account. Secondly, they don’t have collateral or a credit record to secure a loan and thirdly, they are often unable to complete the necessary paperwork because of their poor standard of literacy. This is why they rarely have access to the formal financial sector and microfinancing is an important service in assisting to cope with these issues.

In India, self-help groups form the basic constituent unit of microfinance. These groups usually consist of 5 to 20 poor women who pool their savings, sometimes as low as 10 or 20 cents per month, per member, into a fund from which they can borrow when necessary. The group is linked to a bank, where they maintain a group account. After at least 6 months of ´inter-loan` repayments the group is eligible for the loan. The bank lends to the group as a unit, without collateral, relying on self-monitoring and peer pressure within the group for repayment of these loans. Starting with lower multiples (1:1 to 2:1) the maximum loan amount often is a 4:1 multiple of the total funds in the group account. Many other innovative social entrepreneurs could be named.

The Way Forward

One example of highly motivated young Indians wishing to promote Social Entrepreneurship is Rikin Gandhi. After working for the US space program as an aeronautical engineer he decided to help Indian farmers with his project “Digital Green”. The project is sponsored by the Bill and Melinda Gates Foundation and interacts with different NGOs. It produces and distributes community-centric, locally relevant videos about best agricultural practices. In the future, “Digital Green” plans to develop a technology platform where farmers can share data and videos.

There are some challenges that Social Entrepreneurs must address in India. They often face situations that are unpredictable, constantly changing and hard to control. In 2008 for instance the terror attacks in Mumbai forced Social Entrepreneurs to re-think their general strategies. Furthermore, although there are many opportunities in the Indian welfare sector, most social entrepreneurs still focus on traditional areas such as education and healthcare.

Strength and weakness, both are the different sides of the same coin. Hence, all involved group members of SHG must realize that they all work with their own individual strengths and weaknesses. No one should be blamed for ones weakness i.e. all SHG members are equally responsible for success and failure of their entrepreneur. Self-help group can take a lead in any of the income generating activities by which group members can get employment and enhance their family socio-economic status. The group provides a platform to women for income generation with co-operative and mutual helping attitude.

The definition of SHG as approved by National Bank For Agriculture and Rural Development [NABARD] the apex banking body in India, is “An SHG is a small, economically homogeneous and affinity group of rural poor voluntarily formed to save and mutually agree to contribute common fund to be lent to its members as per group decision for their socio-economic development”.

As the name indicates, self-help group is an informal group of about 15-20 people from a homogeneous class, who come together for addressing their common problems. Group itself becomes a base to convey necessities and sort out social economical problems of their group members.

Main aim of SHG is to make group members self sufficient and self reliant [independent] by self-employment and empowerment through group dynamics.

Principle of SHG:

“Unity is strength”

Self-help group is a best way to get strengthen. Ex:- A single wooden piece can be easily broken, but a bundle of 15-20wooden pieces can’t be broken easily. As like this a group of people can easily sort out any of the problem, because group decisions carry more weightage than individual decision.  

Characteristics of an ideal SHG:

According to MARADA[2000] well functioning SHG should have following structural features:-

• An ideal SHG comprises 15-20 members.
• All the members should belong to the same socio-economic strata of society.
• Rotational leadership should be encouraged for the distribution of power and to provide leadership opportunities to all the members.
• Member should regularly attend meetings, save money and participate in all activities VOLUNTARILY.
• The procedure of decision-making in SHG should democratic in nature.
• The group frames rules and regulations, which are required in its effective functioning.
• Transparency in account keeping and accounts should be maintained and updated regularly.
• An SHG should be socially viable institution.

Role of Self Help Groups in empowering women:

 The self-help groups empower women and train them to take active part in the socio-economic progress of the nation and make them sensitized, self-made and self disciplined. The SHGs have inculcated great confidence in the minds of rural women to succeed in their day-to-day life. SHGs enhance the quality of status of women as participants, decision makers and beneficiaries in the democratic, economic, social and cultural spheres of life. The SHGs bring out the capacity of women in molding the community in right perspective and explore the initiative of women in taking the entrepreneurial ventures. SHGs also organize women to cope with immediate purposes depending on the situation and need.

Participation of women in SHGs makes a significant impact on the empowerment in social aspect also. Participation helps women come out in open and discuss their problems. It also helps to bring about aw2areness among rural women about savings, education, health, environment, cleanliness, family welfare, social forestry, etc. Researches also reveal that increased participation of women in decision making at all level will help to adjust the goals pursued through development.

Empowerment should be extremely induced so that women can exercise a level of autonomy. There should also be ‘self empowerment’ so that women can look at their own lives. The process of ‘learning by doing and earning’ would certainly empower rural women. More and more rural women need to be involved in self-employment. Self-employment in agriculture, village and small industries and retail trade and services should be expanded. Self-employment is also conducive to the development of individual initiative and entrepreneurial talent and offers greater personal freedom. The added advantage is that the institution of family remains undisturbed. The emergence of self-help groups in this context is a welcome development. The groups would provide a permanent forum for articulating their needs and contributing their perspectives to development.

Self-help group should be developed as an institution for financial intermediation as well as people’s network rather than a vehicle for credit disbursal only.

Self Help Group is able to overcome most of the practical problems encountered in the implementation of the various income generating programmes for the economic empowerment of women. SHGs have also been organized during last decade under various programmes of the government, e.g.- District Poverty Eradication Programme, Aapni yojna, Development of Women and Children in Rural Areas, Krishi Vigyan Kendra, etc.

The number of SHGs existing at present in the country is estimated to be about 2,60,000. Out of these; about 90 percent are women group. The cumulative number of SHGs linked to the bank till March 2002 is 4,61,478 and to the tune of 10,263 million rupees has been advanced to the SHG for income generating activities [NABARD,2002]. As per the report of NABARD, SHG bank linkage programme has benefited 4 million families, covering an estimated 20 million very poor people during 2001-2002.

The SHGs are a viable alternative to achieve the objectives of rural development and to get community participation in all rural development programes. The possible outcomes of women’s entrepreneur through SHGs at household level are self employment, sustainable livelihoods, enhanced social dignity and better status of women. SHG would lead to benefits not only to the individual women and women’s groups but also for the family and community as a whole through collective action for development. Empowerment is not just for meeting their economic needs but also for more holistic social development.

The success of a small scale enterprise depends on the following  major factors:

[A] Inherent viability of the project, i.e.-technical, organizational, financial, commercial    viability.

[B] The way a project is planned, i.e.-decisions regarding various project parameters such as where to locate, what technology to be used, what should be the capacity of the machineries etc.

[C] The meticulousness with which a project is implemented.

[D] The way of project managed.

Everything revolves around the enterprise. Therefore, the factors responsible for their emergence and growth must be analyses and supported.

It is rightly remarked that entrepreneurs are not necessarily born, they can also be developed through education, training and experience. Though entrepreneurial talent exists in every society but socio-economic environment hinders the emergence of entrepreneurial talent. Entrepreneurship requires an environment in which entrepreneur can learn and discharge his assigned responsibility in an efficient manner and change his attitude.

Entrepreneurial development seeks to provide constructive direction for those who choose a career path different from traditional roles. The process of entrepreneurial development focuses on training, education, reorientation and creation of conductive and healthy environment for the growth of enterprise.

Entrepreneurial development is an act of encouraging people for entrepreneurial career and making them capable of exploiting business opportunities. It is not simply a training task. It is the act of motivating and developing skills of potential entrepreneur and helping them in developing their own ventures.

Entrepreneurial development is thus an organised and systematic development. It is regarded as a tool of industrialization and a solution to unemployment problem. The objective of entrepreneurial development is to motivate a person for entrepreneurial career and to make him capable of perceiving and exploiting successfully opportunities for enterprises.

The trained entrepreneur can guide others on how to start their own enterprise and approach various institutions for finance. In fact, trained entrepreneurs become catalysts of developing industry and economic progress. According to Prof. Pareek and Karenina, “Operationally, entrepreneurship development would mean development Of entrepreneurs and promtion of increased flow of individuals to entrepreneurial ranks.

” Entrepreneurial Development Programme (EDP) may be defined as “a programme designed to help an individual in strengthening his entrepreneurial motive and in acquiring skill andcapabilities necessary for playing his entrepreneurial role effectively.”

Nature or characteristics of entrepreneurial development programme

Following are the main characteristics of entrepreneurial development programme: it is an organised and systematic process of enhancing the motivation, knowledge änd skills of the potential entrepreneurs. It is based on the belief that individuals can be developed, their outlook can be changed and their ideas can be converted into action through training. It develops first-generation entrepreneurs who on their own cannot become successful entrepreneurs. It is an endeavour in human resource development. it emphasis on operational rather than academic training. It is regarded as a tool of industrialisation and a solution to unemployment problem. It is catalyst for developing industry and economic programmes.  It is not totally based on training. The whole process  extends much beyond ‘training’. Much of it is personal counselling and support.

Objectives of entrepreneurial development

Following are the main objectives of entrepreneurial development programmes:

(1) Promotion of Cottage and Small-Scale Industries: The main objective of EDP is to provide, in the rural areas, special programmes designed to stimulate new ventures and encourage expansion of existing activities of small and medium scale industries.

(2) Generation of Employment Opportunities: EDP aims to encourage self-employment among potential entrepreneurs. It generates employment and self-employment opportunities in the processing of indigenous raw materials for local consumption and for exports.

(3) Promotion of First-Generation Businessmen: One of the main objectives of EDP is to encourage first generation entrepreneurs who do not have any business background.

(4) TO Create Awareness about Availability of the Resources: It, aims to front, on wrongs about the available resources„ such raw material, technology etc. in the prospective entrepreneurs.

(5) To import Training: The main objective of EDP is to in donut and train potential entrepreneurs. It imparts training in mentoring understanding and skills. It also provides post training assistance and monitoring facilities.

(6) To Develop a Broad Vision: One of the objectives of EDP is to develop and broad vision to see the business as a whole and to integrate his functions with it.

(7) To Remove Doubts of Entrepreneurs and to give solution in to their Problems: New entrepreneurs have to face many problems in the establishment and operation of business. To remove doubts of entrepreneurs and to give solution to their problem is one of the main aims of EDP. It helps the entrepreneurs to set or reset the objectives of their business and work individually and along with his group for their realisation.

(8) To create a successful entrepreneur: One of the main aims of EDP is to create the successful entrepreneurs. It provides constructive direction for those who choose a career path different from traditional roles.

(9) Creation of Conductive and healthy environment for the growth of entrepreneurs: The process of entrepreneurial development focuses on training, education, reorientation and creation of conductive and healthy environment for the growth of enterprises.

Role/importance of entrepreneurial development programmes

EDPs have great role and relevance in increasing the supply of new entrepreneurs to accelerate the process of industrialization. It is widely accepted that persons interested to become entrepreneur will be greatly helped if appropriate training and development programmes are made available to them.  Need/importance of EDPs can be judged on the basis of following points.

(1) Eliminating Poverty and Unemployment: Most of the under developed countries are confronted with the chronic problem of unemployment. EDPs can help these unemployed people in getting self-employment and at the same time generating employment opportunities for others. Various programs initiated by the government like NREP (National Rural Employment Programme, IRDP (Integrated Rural Development Programme etc. are aimed at tackling unemployment problem. 

(2) Balanced Regional Development: Successful EDPs help in accelerating the pace of industrialisation resulting in the reduction of concentration of economic power. Small scale units can be set up in remote areas with little financial resources and it helps in achieving balanced regional development. EDPs aimed at promoting small scale units are more useful for balanced regional development than medium and large-scale units.

(3) Economic Growth: The relevance of EDPs can be clearly understood by their role in the economic development of developing countries like India. Such programmes create many entrepreneurs who are able to establish small and micro enterprises which require less investment in funds. It increases new investment and bring innovations. All these activities in turn stimulate the economic growth.

(4) Optimum use of Locally Available Resources: The EDPs can help in harnessing locally available resources by training and educating the entrepreneurs. Since abundant resources are available locally, proper use of these resources will help in creating a healthy base for sound economic growth and rapid industrialisation. EDPB also help in minimising excessive scraps, defective output and wastage in the production process.

(5) Promote Innovations: Entrepreneurial Development Programmes initiate the people for innovations and creativity. EDPs have become a vital strategy for harnessing the vast untapped human skills, to channelise them into accelerating industrialisation.

(6) Defuses Social Tension: Every youth feels frustrated if he does not get employment after completing his education. The surplus young energies can be diverted to self-employment careers to help the country. This may defuse social tension and unrest among youth.

(7) Development of Entrepreneurship Qualities: Thus, the EDPs are needed to induce achievement motivation and develop entrepreneurial characteristics or competencies among young persons through training with a view to making them successful future entrepreneurs.

(8) Preventing Industrial Slums: More industrial units are located in highly congested areas and it leads to creation of industrial slums. EDPs help in removal of these slums as entrepreneurs are provided with various schemes, incentives, subsidies and infrastructural facilities to set up their own enterprises in all the places. It will help in controlling industrial slums and also reduces pollution, traffic congestion and overcrowding in developed areas.

(9) Fulfilment of Dreams: EDP is necessary to motivate the potential entrepreneurs to convert their dreams into action.

(10) Successful Launching of New Units: EDP develops motivation, competence and skills necessary for successful launching, management and growth of the enterprise.

(11) Development of Rural and Backward Areas: If new enterprises are set up in backward and rural areas of a developing country like India, they are sure to mitigate poverty in, such areas and also to remove lopsided economic development that is, concentration of business enterprises in urban areas only.

Problems of entrepreneurship development programmes (EDPs) are:

• No Policy at the National Level

Though Government of India is fully aware about the importance of entrepreneurial development, yet we do not have a national policy on entrepreneurship. It is expected that the government will formulate and enforce a policy aimed at promoting balanced regional development of various areas through promotion of entrepreneurship.

• Problems at the Pre training Phase

Various problems faced in this phase are: identification of business opportunities, finding & locating target group, selection of trainee & trainers etc.

• Over Estimation of Trainees

Under EDPs it is assumed that the trainees have aptitude for self employment and training will motivate and enable the trainees in the successful setting up and managing of their enterprises. These agencies thus overestimate the aptitude and capabilities of the educated youth. Thus on one hand the EDPs do not impart sufficient training and on the other financial institutions are not prepared to finance these risky enterprises set up by the not so competent entrepreneurs.

• Duration of EDPs

An attempt is made during the conduct of EDPs to prepare prospective entrepreneurs thoroughly for the various problems they will be encountering during the setting up and running of their enterprises. Duration of most of these EDPs varies between 4 to 6 weeks, which is too short a period to install basic managerial skills in the entrepreneurs. Thus, the very objective to develop and strengthen entrepreneurial qualities and motivation is defeated.

• Non-Availability of Infrastructural Facilities

No prior planning is done for the conduct of EDPs. EDPs conducted in rural and backward areas lack infrastructural facilities like proper class room suitable guest speakers, boarding and lodging etc.

• Improper Methodology

The course contents are not standardized and most of the agencies engaged in EDPs are themselves not fully clear about what they are supposed to do for the attainment of pre-determined goals. This puts a question mark on the utility of these programmes.

• Mode of Selection

There is no uniform procedure adopted by various agencies for the identification of prospective entrepreneurs. Organizations conducting EDPs prefer those persons who have some project ideas of their own and thus this opportunity is not provided to all the interested candidates.

• Non-Availability of Competent Faculty

Firstly, there is problem of non-availability of competent teachers and even when they are available, they are not prepared to take classes in small towns and backward areas. This naturally creates problems for the agencies conducting EDP.

• Poor Response of Financial Institutions

Entrepreneurs are not able to offer collateral security for the grant of loans. Banks are not prepared to play with the public money and hence they impose various conditions for the grant of loans. Those entrepreneurs who fail to comply with the conditions are not able to get loan and hence their dream of setting up their own enterprises is shattered. Helpful attitude of lending institutions will go a long way in stimulating entrepreneurial climate.

A non-governmental organization (NGO) is an organization that is neither a part of a government nor a conventional for-profit business. Usually set up by ordinary citizens, NGOs may be funded by governments, foundations, businesses, or private persons. The existence of NGOs is proving to be a necessity rather than a luxury in societies throughout the modern world. the inability of the government alone to create just and sustainable societies is persuasively demonstrated throughout history. Prompted by the inadequacies of the state, citizens across the globe have developed organizations of civil society NGOs to help address a wide variety of social needs.

NGOs have three primary roles in advancing modern societies. First, NGOs can facilitate communication upward from people to the government and downward from the government to the people. Communication upward involves informing government about what local people are thinking, doing and feeling while communication downward involves informing local people about what the government is planning and doing. Secondly, NGOs provide opportunity for the self-organization of society. NGOs enable citizens to work together voluntarily to promote social values and civic goals, which are important to them. They promote local initiative and problem solving. Through their work in a broad array of fields environment, health, poverty alleviation, culture & the arts, education, etc. NGOs reflect the diversity of society itself. They also help the society by empowering citizens and promoting change at the “grass roots”. Thirdly, in some cases, NGOs become spokespersons for the poor and attempt to influence government policies and programs on their behalf. This may be done through a variety of means ranging from campaigning and pilot projects to participation in public forums and the formulation of government policy and plans. Thus, NGOs play roles from advocates for the poor to implementers of government programs; from agitators and critics to partners and advisors; from sponsors of pilot projects to mediators.

NGOs have a clearer link to a guiding purpose, the greater good. They actually take up the responsibility of fulfilling moral and social needs that ought to be taken by the government. After all, there’s more happiness in giving than receiving; NGOS truly embody this thought.

Along with social enterprises, microfinance institutions and donors, corporations play a large role in raising money and resources for NGOs. Many international corporations can today rival entire nations when it comes to raising resources and influence in both India and international territories.

 In the last four years, Corporate Social Responsibility (CSR) in India has acquired new impetus with the Companies Act 2013. The Act defines that companies with a net worth of Rupees 500 crores or more, or a turnover of Rupees 1,000 crores or more, or earning a net profit of Rupees 5 crores or more must spend a minimum amount on corporate social responsibility.

CSR: support charities to fulfil legal obligation while generating goodwill

For many of India’s most loved brands, ‘giving back’ is not about fulfilling this legal obligation of having to donate to charity, but generating goodwill in their respective communities. These are times when CSR and NGOs go hand-in-hand. Companies, therefore, must spend in areas like literacy, women empowerment, environment, water, sanitation, child rights etc. Most companies around the world allocate 100% of their resources before they consider the need of CSR. The same holds true for India, and even after allocating CSR funding, and engaging employees with a mission of social good, companies struggle with their project’s sustainability.

NGO intervention in corporate social responsibility

Many companies simply do not have the bandwidth (employees, consultants and supervision) to undertake consistent CSR implementation. These companies not only need to spend on CSR, but also on CSR training for their employees, or adding manpower dedicated to CSR capability. NGO’s in India pitch a streamlined, customised solution to these corporations. For NGOs, corporates are not only a source of consistent funding but also access to strategic resources. An IT giant, for example, can provide technology, processes, and support for educational initiatives.

A look at India’s NGO sector

India possibly is home to the world’s largest number of active not-for-profit NGOs. At last count, India had 31 lakh NGO – one NGO for about 400 Indians. With the boom in CSR funding, this number can cross 40 lakh – considering that there are thousands of public and private sector companies worth Rs.15,000 to 18,000 crores annually. This number doesn’t even include India’s actual number of NGOs, as many aren’t formally registered under the Societies Registration Act 1860, or any other Acts pertaining to non-profit organisations.

 How does a company identify the right NGO for CSR intervention?

With this veritable ocean of NGOs, it isn’t easy to pick the right one for a company to engage in CSR intervention. Companies not only must allocate funds, but also work with the NGO on CSR interventions. This requires the need for effective monitoring and evaluation mechanisms in place. Many large corporates, like Godrej, Reliance, Wipro, Infosys, Tata, and the Birlas have their established their own Foundations and Trusts to achieve this.

 It is critical for a company to rate an NGO on parameters while shortlisting one for CSR implementation.

• Years in operation

It is important for a corporate to work with an NGO that has demonstrated years of experience and reliability. During this time, it must have mobilised resources, infrastructure and people for a social cause.

• Geography

Companies should preferably look for an NGO near the project area. This not only ensures easier logistics, but also an intimate understanding of the local needs, geography, language, culture etc. The NGO preferably must situate offices or centres with connectivity and other resources in these locations, to efficiently execute projects.

•  Reputation

Transparency, accountability and measurable change in a social welfare context are how an NGO’s reputation can be measured. This gives an NGO credibility, making it trustworthy of using corporate assets and funding for CSR goals.

• Certification (e.g. filing for donation tax return)

Certification allows corporates to assess if an NGO complies with legal norms, as legal issues can compromise CSR implementation. Certification includes Income Tax exemption, FCRA, service tax, and also proper internal documentation in case an audit is requested.

• Relevant experience

An NGO must have shown work in projects relevant to the corporate’s CSR goals. Coca-Cola India, for example, devotes a substantial amount of CSR efforts to water sustainability, conservation, and sanitation. These projects must be corroborated with completion certificates from clients.

• Leadership

The NGO’s leadership must be well-known promoters, with no legal proceedings or controversies to their name.

•  Credentials

An NGOs credentials can also be ascertained via certificates, awards, news coverage, and membership of NGO and corporate bodies like CII, Chamber of Commerce etc.

An Intrapreneurship is the system wherein the principles of entrepreneurship are practiced within the boundaries of the firm. An intrapreneur is a person who takes on the responsibility to innovate new ideas, products and processes or any new invention within the organization.

Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship.

An intrapreneur is the individual who thinks out of the box and possesses the leadership skills and does not fear from risk. Thus, an intrapreneur possesses the same traits as that of an entrepreneur.

The concept of an Intrapreneurship can be well understood in contrast to the entrepreneurship.

1. Intrapreneurship is restorative in nature, i.e. an organization encourages the employees to practice the entrepreneurial principles to counter stagnation within the firm or transform the slow growth of the company into a high-growth. Whereas the entrepreneurship is developmental in nature, i.e. an individual creates something that has never existed before, such as a new product, process or a new venture itself.
2. In intrapreneurship, the major challenge that individual faces are from the company’s culture Sometimes, the corporate relationships and the mindsets of employees acts as a hurdle in the path of an intrapreneur. Whereas, in the case of entrepreneurship, the market is the only enemy. An entrepreneur has to scrutinize the market conditions thoroughly to cross the hurdles coming in his way.
3. An intrapreneur has an access to firm’s resources such as funds, manufacturing setups, marketing facilities, and other supporting activities to give shape to his dreams. Whereas an entrepreneur has to arrange his own resources such as own funds or the borrowed funds, manufacturing facilities, marketing facilities, etc.
4. An intrapreneur does not have the ownership of a new venture and is not even independent to take decisions, whereas an entrepreneur is the whole sole owner of the new venture established by him. Also, he is independent to take any decisions with respect to his setup.

Thus, an Intrapreneurship is a practice of creating the entrepreneurial environment within the organization, thereby enabling the employees to apply their entrepreneurial skills in the job roles; they are assigned to.

Benefits and Risks of Intrapreneurship

Many entrepreneurs start out while working for someone else. Being an intrapreneur gives you the benefit of your company’s resources and connections, secure in the knowledge that you’ll still be able to pay the rent while you practice your craft.

Knowing that you’re making a meaningful contribution to your team or organization, while pursuing your own vision at work, can also profoundly improve your job satisfaction, build your credibility, and work wonders for your self-confidence

However, not many companies have formal intrapreneurship programs, and the leaders within your company (managers, executives and the CEO) may not see it as part of their role to support people who tread their own path.

Development of Intrapreneurship

1. Develop the Right Personal Skills

Intrapreneurs share many of the strengths and skills more commonly associated with entrepreneurs. They’re self-confident, creative and tenacious innovators, who excel at problem solving and aren’t afraid of putting their ideas on the line.

Intrapreneurs are willing to take calculated risks, but they understand the difference between good risks and bad ones. Learn how to take calculated, intelligent risks by using Risk Analysis to steer clear of ideas that could prove disastrous.

Intrapreneurs are brave, as success is rarely guaranteed. Instead of allowing your fears to keep you from pursuing your ideas, be comfortable in the knowledge that failure can be a stepping stone to something even better, enriching you with practical experience along the way. Overcome your fear of failure, and, when things don’t go perfectly, pick yourself up, review the situation, and move on.

2. Develop an Idea

Intrapreneurs are always looking for ways to make things better. To them, problems are really just opportunities in disguise.

One of the best ways to get noticed in your organization is to come up with a creative solution to an existing problem. Start by looking at the issues and bottlenecks that affect productivity and cause headaches for other people especially your boss. If you can solve her problems, she’s far more likely to give you the go-ahead on your other ideas.

You can also look at the problems your customers or clients are experiencing. Use problem-solving tools like Root Cause Analysis and The 5 Whys to get to the bottom of them, then use creative-thinking tools like Random Input, The Reframing Matrix or The Simplex Process to come up with innovative solutions.

And discuss your ideas and suggestions with other people who know about different parts of the problem you want to solve. They can help you refine your ideas and develop an even better solution.

3. Pitch Your Idea

Once you have an idea that excites you, it’s time to pitch it to your boss or leadership team. This can be a challenging step, because it means putting yourself, and your idea, on the line.

Prepare by learning how to think on your feet and brush up on your impromptu speaking skills. Staying cool under pressure will help you to think clearly, while you pitch your idea.

Next, use our Bite-Sized Training workbook (Club members only) to think about how to sell your idea, and craft an elevator pitch that explains your idea in two minutes or less. Strengthen your message and make it more persuasive with Monroe’s Motivated Sequence, then use our Presentation Planning Checklist to make sure that you haven’t forgotten anything.

4. Be Persistent

If at first you don’t succeed, try, try again.

Don’t be discouraged if your pitch is unsuccessful. Some of the most successful ideas of all time were rejected the first time around. Correction fluid, folding bicycles, the hovercraft, and even Barbie™ dolls were sidelined in the beginning.

Take careful note of any reservations that your manager or leadership team raise during your pitch. If you still believe that your idea will work, do more research to support your hunch. Make your solution more attractive by refining it in light of what has been said, and stay focused on creating value for other people.

5. Conduct a Pilot Test

The next step is to start putting your ideas into action. It’s unlikely that, at this early stage, your manager will give you the green light to roll out your idea across the whole company. First, he will need to see more evidence that the idea is going to work.

One way to do this is by conducting a Business Experiment to test your ideas on a small scale, before taking big risks or committing significant resources to a larger project. You could also use Deming’s Plan-Do-Check-Act cycle to set up a pilot project, or create a Minimum Viable Product to prove your assumptions and explore your customers’ wants and needs.

6. Wider Implementation

If your pilot study is a success and you and your manager are happy to proceed further, it’s all systems go!

Good Project Management, Risk Management, and Change Management skills will help to keep things running smoothly.