As per PTU syllabus: Skill Development for Entrepreneurs. Business incubation – Meaning – Setting up of Business Incubation Centre,. Meaning and definition of a sick industry - Causes of industrial sickness. Preventive and remedial measures for sick industries
1. Unit No. 4
Skill Development for Entrepreneurs. Business incubation – Meaning
– Setting up of Business Incubation Centre,. Meaning and definition
of a sick industry - Causes of industrial sickness. Preventive and
remedial measures for sick industries
5. Entrepreneurial Development
Programmes
• It may be defined as a programme designed
to help an individual in strengthening his
entrepreneurial motive and in acquiring
skills and capabilities necessary for playing
his entrepreneurial role effectively.
• An EDP is primarily concerned with
developing and motivating
entrepreneurial talent and growing him to
be an effective entrepreneur
6. Objectives/Need of EDPs
1. To formulate project.
2. To select project/product.
3. To analyze the environment.
4. To acquire the basic managerial skills.
5. To understand the process and procedure of setting up of
enterprise.
6. Enable to communicate clearly and effectively.
7. Develop a broad vision about the business.
8. Enable to take decisions.
7. Phases of Entrepreneurial Development Programs
• An EDP consist of 3 broad phases:
1.Initial or Pre-Training Phase.
2.Training or Development Phase.
3.Post Training or Follow-Up Phase.
8. Initial or Pre-Training Phase
• This phase includes activities and preparation required to
launch the training programme.
• The main activities are:
1. Creation of infrastructure for training.
2. Preparation of training syllabus.
3. Tie-up of guest faculty.
4. Designing tools and techniques for selecting the trainees.
5. Formation of selection committee.
9. Training or Development Phase
• During this phase training programme is
implemented to develop motivation and
skills among the trainees.
• The objective of this phase is to bring
desirable changes in the behaviors of the
trainees.
11. • Content of the Training Programme:
The main training inputs are as follows:
1.Technical knowledge
2.Achievement motivation training
3.Market Survey
4.Managerial Skills
5.Project Preparation
12. Post Training or Follow-up Phase
• This phase involves assessment to judge
how far the objectives of the programme
have been achieved.
• Monitoring and follow-up reveals drawbacks
in the earlier phases and suggest guidelines
for framing the future policies.
13. National Policy on Skill Development
and Entrepreneurship 2015
• Ministry is an integral part of the government policy on
"Sabka Saath, Sabka Vikaas" and its commitment to
overall human resource development to take advantage of
the demographic profile of our country's population in
the coming years.
14. Objective
• Skilling at scale with speed and standard (quality).
• A framework to all skilling activities being carried out
within the country, to align them to common standards
and link the skilling with demand centers.
• How skill development efforts across the country can be
aligned within the existing institutional arrangements.
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15. Proposed Scheme on
Entrepreneurship Development
• An entrepreneurship development scheme is currently
being developed by Ministry of Skill Development and
Entrepreneurship.
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16. Educate and equip potential and early
stage entrepreneurs across India:
• In partnership with experts, a world class
entrepreneurship education curriculum will be developed
and will be delivered at no cost.
• Leveraging online learning, entrepreneurship courses can
be taken as and when needed by students and business
people alike through Massively Open Online Courses
(MOOCs).
• Focus on entrepreneurship education will be integrated
into the mainstream curriculum in 3,000 colleges around
India.
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17. • Entrepreneurship education courses will also be delivered
in approximately 325 industrial clusters across the nation.
Through 50 nodal Entrepreneurship Hubs (E-Hubs) set
up across all states, existing and potential entrepreneurs
will be targeted for entrepreneurship education modules
that suit their need.
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18. Connect entrepreneurs to peers,
mentors, incubators:
• A web and mobile based platform connecting the entire
entrepreneurial ecosystem will be established.
• Platform members will access content online, including
information on government services and special packages
offered by service providers.
• The creation of new incubators will be encouraged and a
national network of incubators and accelerators
established to support young entrepreneurs.
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19. •
Entrepreneurship activities in innovative and cutting edge
technology areas will be aligned with initiatives such as
Atal Innovation Mission (AIM) and Self Employment
Talent Utilisation (SETU).
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20. Support entrepreneurs through
Entrepreneurship Hubs (E-
Hubs):
• Support to entrepreneurs, including coordinated delivery
of national and state government entrepreneurship
programs and access to enabling resources, a national
network of Entrepreneurship Hubs (E-Hubs) will be
established. One national, 30 state, 50 Nodal and 3,000
college based E-Hubs will be set up to deliver support.
These E-Hubs will, collectively, cover the entire nation.
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21. Catalyse a culture shift to
encourage entrepreneurship:
• To promote entrepreneurship, state and national level
interactions with stakeholders will be convened.
• International linkages will be established through
internship opportunities and exchange trips to global
entrepreneurship hubs
• National brand ambassadors.
• Awards will be instituted for young achievers
• a National Entrepreneurship Day will be celebrated. 21
22. Encourage entrepreneurship
among underrepresented groups:
• Special focus will be given to the inclusion of scheduled
castes & scheduled tribes, minorities, differently abled,
etc., and regionally under-represented areas including large
part of Eastern and North Eastern India in
entrepreneurship programs.
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23. Promote Entrepreneurship
amongst Women:
• Focus will also be placed on encouraging women
entrepreneurs through appropriate incentives for women
owned businesses under the public procurement process.
• It will also be ensured that gender neutral incubation/
accelerator, network of mentors, industry, resource
centres and credit institutes are developed to facilitate
Women Entrepreneurs.
• Priority will be given for mentorship and support system
for women entrepreneurs in existing business centres and
incubators. Steps will also be taken to assemble gender
disaggregated data.
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24. Foster social entrepreneurship
and grassroots innovations:
• Universities and academic institutions will be encouraged
to launch a course on ‘Social Entrepreneurship’, including
through online distance education, to actively promote
social entrepreneurship in the country. Additional
support, including through fiscal incentives and
incubation, will also be considered.
• To foster grass-roots innovation, a focus on innovations
in hubs, collaborations with organisations such as the
National Innovation Foundation and promotion of
Intellectual Property Rights will also be encouraged. 24
25. Entrepreneurial Development
Programme in India
1. Entrepreneurial Development Institute of India.
2. National Institute for Entrepreneurship and Small
Business Development.
3. Xavier Institute of Social services Ranchi.
4. Madhya Pradesh Consultancy Organization Ltd.
5. Calcutta “Y” Self Employment Centre.
6. Technical Consultancy Organizations.
26. Role of Business Incubator
1. What is Business Incubator?
2. Why we need them?
28. Business Incubation
• Unique and highly flexible combination of
business development process, infrastructure and
people designed to nurture new and small businesses by
helping them to survive and through the difficult and
vulnerable stages of development.
• It provided the services like fund raising, management
training, office space etc.
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29. Developing Profitable Enterprises.
Create Jobs
Raise the awareness of Potential Entrepreneurs.
Create ecosystem conducive for entrepreneurship.
Success measures number of companies incubated
and their being successful.
Objectives of these Incubators
Nature of these Incubators
NGO – Government financed
Private – Self financed
30. • ICT (Information and Communication Technology) services
• Office space
• Shared workshops
• Financial management/accounting services
• Linkages to financiers, Loan and Loan guarantee
• Incubation and Business Development: Business information
• Business management and development advisory services
• Incubation program for non-resident clients (virtual incubation)
• Incubation program for resident clients
• Mentoring/coaching and mentoring
• Pre-incubation services
• International Business Services: Help entering particular markets
• Networks and Synergy: Networking events
• Referrals to business professionals
• Technology Transfer: Help with commercializing technology
• Help with intellectual property/patent advice
• Other: Facilites also includes shared resources.
• Strong support for access to business network, Angel/ VC/ Loan funding.
Facilities Provided by Incubators
31. How to start an Incubation center?
• Entrepreneurship in India is on the verge of explosive
growth.
• This also throws new opportunities for the eco-system to
take shape.
• Angel investors, venture capital, media, startup clubs,
service providers, mentors and training companies are
going to grow.
32. Assess the market conditions and
entrepreneurs requirements
• One important thing to keep in mind is what do entrepreneurs really
want from an incubator – is it access to cheap office space, internet,
electricity (the tangible benefits of an incubator) or the spirit to work
along with fellow entrepreneurs, chance to meet investors, get access
to quality manpower and experienced advisors (the intangible benefits
of an incubator).
• This will help you identify the real pain point of your customers (the
entrepreneurs) and address their needs most effectively. It is very
important to ask the question – why do we want to setup an
incubation center?
33. Identify team and service providers
• While it may sound great to have an incubator which
connects the entrepreneurs, investors, mentors, trainers,
students and faculty – the real test comes in execution.
The team that manages the incubator has to be A-class, as
they are the ones who will drive the incubator, while the
incubatees will drive their individual businesses. It is also
good to identify a set of advisors – preferably a mix of
industry veterans, faculty and investors, which always
guides the incubation managers on strategic issues.
34. Arrange for resources
• An incubation center needs resources during setup and operations. Few of them
are listed below:
• a. Space
• b. Connectivity – internet/telephone/electricity
• c. Data center
• d. Services – maintenance, security
• e. Furnishing – chair, table, cubicles
• f. IT Infra and Support – software, LAN, leased lines, wi-fi, printer, scanner,
copier, Access control system
• g. Others – board rooms, meeting rooms, coffee machines, restaurants etc.
35. Establish industry linkages
• Once the incubation center is setup, it is very important to
establish industry linkages – maybe even before the first
company starts operations. This maybe contact with local
entrepreneurs, lawyers, CAs, industry associations like CII,
FICCI, Nasscom etc. or media (TV, print etc.), and other
parts of the eco-system like investors. Many incubators
are not able to perform well for themselves or for their
portfolio companies because of being too internally
focused.
36. Draw out a calendar of activities
• It is important to draw out a calendar of activities, which
keeps the incubator always charged. Conducting training
programs, mentor meets, talks from experts, job fair,
product showcases, technology demonstrations etc. from
time to time helps the community to grow and brings in a
great network effect!
37. Attract, select, retain and manage
startups
• Last, but not the least, an incubators’ primary reason of
existence is entrepreneurs! The team needs to think about ways
to attracting, selecting, retaining and managing startups that
inhabit their planets. A clearly conceived and stated criterion for
selection is important – for example, most college based
incubators do not allow anyone else other than their own
alumni/students to get incubated. So it is important to
communicate the same in advance to avoid disappointment.
Another benefit of a government supported incubator is that
the portfolio companies get service tax rebate – which again is
a way to attract startup entrepreneurs
38. Name Place Website
Society for Innovation and
Entrepreneurship (SINE)
IIT Bombay www.sineiitb.org
Technology Business Incubator (TBI) IIT Delhi www.fitt-iitd.org
Rural Technology and Business Incubator
(RTBI)
IIT Chennai www.rtbi.in
Tiruchirappalli Regional Engineering
College - Science & Technology
Entrepreneurs Park (TREC-STEP)
REC
Tamilnadu
www.trecstep.com
Science and Technology
Entrepreneurship Park (STEP)
JSSATE
Noida
www.jssstepnoida.org
PSG Science and Technology
Entrepreneurship Park (PSG-STEP)
PSG
Coimbatore
www.psgstep.com
IndiaCo Centre (for profit) Pune www.indiaco.com
Some Business Incubators in India
39. Top 10 Startup Incubation Centers in
India
• Innovation and Entrepreneurship (SINE), IIT Mumbai
• Technology Business Incubator, IIT Delhi
• Technopark Technology Business Incubator (T-TBI), Kerala
• Startup Village
• Indian Angel Network (IAN)(National Science & Technology
Entrepreneurship Development Board and the Department of
Science & Technology of the Government of India.)
• Technopark TBI(a joint association of Technopark, Trivandrum and
the Department of Science and Technology (DST), Government of
India)
40. • Centre for Innovation, Incubation and Entrepreneurship (CIIE), IIM
Ahmedabad
• NSRCEL, IIM Bangalore
• GSF Accelerator
• AngelPrime- was launched recently in 2011 in Bengaluru by well
known names in the Indian tech industry like Bala Parathasarathy,
Shripati Acharya and Sanjay Swamy. The areas that AngelPrime aims
to incubate in are mobile payments, e-commerce and smartphone /
tablet apps. It has already begun incubating a mobile payments
company and a smartphone and tablet startup.
44. • The sickness of a firm has been defined as the situation
where the rate of return realized on invested capital,
taking risk involvement into consideration, is
significantly & continuously less than the prevailing
rates on similar investment.
• In other words we can say that it is situation where the
revenues of a firm are insufficient to meet the costs
& the average rate of return on investment is less
than the firm's cost of capital.
44
45. Definition according to companies
Act,2002
Sick industrial company also means an industrial company
which has –
- Accumulated losses in any financial year which are equal
to 50 percent or more of its average net worth during
four year immediately preceding such financial year
- Failed to repay its debts within any three consecutive
quarter on demand made in writing for its repayment by a
creditor of such company.
46. Criteria of Sickness
The criteria to determine sickness in an industrial company are
•(i) the accumulated losses of the company to be equal to or more
than its net worth i.e. its paid up capital plus its free reserves
•(ii) the company should have completed five years after
incorporation under the Companies Act, 1956
•(iii) it should have 50 or more workers on any day of the 12
months preceding the end of the financial year with reference to
which sickness is claimed.
•(iv) it should have a factory license.
48. To ascertain the symptoms of Sick
Unit
The below Factors has to be taken in account
•(a) The rate of return on investment & capital cash flow
•(b) Ability to meet socio- economic obligation
•(c) Capacity to redeem its debts
•(d) Profitability
•(e) Ability to face competition
•(f) Ability to acquire share in the market
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49. Causes of industrial sicknessCauses of industrial sickness
External causes
Internal causes
51. Cont’d…Cont’d…
2. Erratic supply of inputs:
- shortage of raw material.
- lack of transportation facility.
- high price.
3. Demand & credit restraints:-
lack of credit facility.
storage expanses.
chance of out of fashion.
– no equal balance of demand and supply and lack
of credit facility.
53. Internal causes:
1.Fault at the planning & construction stage:
- wrong location area
- absence of market analysis.
- unbalance capital structure.
2. Financial problem:
- unable to repay payment.
- lack of financial support from bank & institution.
54. Cont’d…Cont’d…
3. Defective plant & machinery
- lack of technical & professional skill
- lack of technology
- in efficient in machine.
- high maintenance.
4. Entrepreneurial incompetence
- lack of knowledge of market
- lack of efficient professional skill
- lack of innovation
55. Some concerns related to Sick Units
• A dividend postponing unit to investors
• losing or discouraging unit to industrialists
• A doubtful debtor & a weak borrower to creditors &
bankers
• An industrial problem unit to the government
• A bad employer to workers
• Great wastage of technical & human resources to the
country.
56. Revival Measures & Strategies
• Identify the sickness in a unit as early as possible & to
analyses & diagnosis its causes
• Nurse the unit immediately with appropriate remedial
measures with a view to turnaround the sick unit to an
economically viable one which means a substantial &
sustained positive change in the performance of the
business entity
57. Broad objectives of SICA
• Timely detection of sick and potentially sick companies.
• Speedy determination by a body of experts of the
preventive, ameliorative, remedial and other measures
which need to be taken with respect to such companies.
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58. The important provisions of
SICA
• Two quasi-judicial bodies were formed:
Board for Industrial and Financial Reconstruction (BIFR) and
Appellate Authority for Industrial and Financial Reconstruction
(AAIFR).
• BIFR was set up as an apex board to tackle industrial sickness and
was entrusted with the work of taking appropriate measures for
revival and rehabilitation of potentially sick undertakings and for
liquidation of non-viable companies.
• While, AAIFR was constituted for hearing the appeals against the
orders of the BIFR.
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59. Revival of sickness
When an Industrial Unit is identified as sick a viability study should be
conducted to assess the unit, it covers:
Market
Operations
Finance
Human Resource
Environment
The viability study may suggest one of the following measures:
Debt restructuring
Infusion of funds
Replacement of existing management
60. How to detect symptoms of
sickness
Commercial banks & financial institution can detect the symptoms of
sickness through periodical progress report
•Financial statement,
•Stock statement & return under periodical information system
•Plant visit, personnel discussion
•Report from nominee directors
•The establishment of management information system within the
industrial unit will help its management to detect the symptoms of the
sickness & forward it to adopt remedial measures
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61. Steps to be taken by banks.
- giving adequate working capital when there is a
shortage.
- recovery of interest reduced rate
- arrange the special committee of state level in
the local branch for link between financial
institution and government agency.
Policy framework and Concession by the
government
62. BIFR: How to apply
• BIFR would make an inquiry as it may deem fit for
determining whether any industrial company had become
sick, under the following conditions:-
• If the Board of Directors of a sick industrial company
made a reference to the BIFR for determination of the
remedial measures with respect to their company. Such
reference was to be made within sixty days from the date
of finalisation of the duly audited accounts of the
company for the financial year at the end of which the
company had become sick. 62
63. • For filing the reference, the Board of Directors must have
sufficient reasons to form the opinion that the company
had become sick; or
• On receiving such information (reference) with respect to
a sick company or upon its own knowledge as to the
financial condition of a company. Such a reference to the
board may be made by:- (i) The Central Government; (ii)
The Reserve Bank of India; (iii) State Governments; (iv)
Public financial institutions; (v) State level institutions; or
(vi) Scheduled banks. 63
64. • If the Board deems it fit to make an inquiry or to cause an
inquiry to be made into any industrial company, it may
appoint one or more persons as special director(s) of the
company for safeguarding the financial and other interests
of the company
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65. • If after making an inquiry, the Board is satisfied that the
company has become sick, it shall, after considering all the
relevant facts and circumstances of the case, may take
either of the following decisions:-
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66. Revival programme
Settlement with creditors
Disinvestment and disposal
Strict control over costs
Streamlining of costs
Improvement in managerial systems
Workers participation
Change of management
Merger with a healthy company
67. • If the Board is of the opinion that the sick industrial
company is not likely to make its net worth exceed the
accumulated losses within a reasonable time while meeting
all its financial obligations and that the company as a
result thereof is not likely to become viable in future and
that it is just and equitable that the company should be
wound up, it may record and forward its opinion to the
concerned High Court. The High Court shall, on the basis
of the opinion of the Board, order winding-up of the sick
industrial company in accordance with the provisions of
the Companies Act, 1956.
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68. • Sick Industrial Companies (Special Provisions) Act,1985 (SICA)
was repealed and replaced by
Sick Industrial Companies (Special Provisions) Repeal Act,2003
.
• The new Act diluted some of the provisions of SICA
and plugged certain loopholes.
• It aimed not only to combat industrial sickness but also
to reduce the same by ensuring that companies do not
view declaration of sickness as an escapist route from
legal provisions after the failure of the project or similar
other reasons and thereby gain access to various benefits
or concessions from financial institutions.
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69. • Under it, the
Board for Industrial and Financial Reconstruction (BIFR)
and Appellate Authority for Industrial and Financial
Reconstruction (AAIFR) were dissolved and replaced by
National Company Law Tribunal (NCLT) and National
Law Appellate Tribunal (NCLAT) respectively.
69
70. • To sum up ,the incidence of industrial sickness in
general and in small industrial units, in particular
can be reduced if all the concerns make a
concerted effort to study the causes of and
cures through their temporary sacrifices with
a sense of dedication and belongingness.
71. Hindustan Motors
• Maker of Ambassador saloon, once the power symbol in
India is set to declare itself sick.
Revenue from its flagship product Ambassador tumbled
Slow to respond to aggressive competition from
multinational players such as Suzuki and Hyundai due to
its design which has remained virtually unchanged for
over 6 decades
It had a negative net worth of Rs. 36 crore on June 30th
2013
72. Board of Industrial and
Financial Reconstruction (BIFR)
• A central Govt. agency that helps restructure bankrupt
companies or close down sick unit.
HM is the third automobile company to report in BIFR’s
door after PAL, the maker of Premier Padmini and FIAT
India.
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73. Remedial
Chennai Plant is being planned to turn in to a separate
entity.
The Chennai unit does contract manufacturing for auto
giants such as Mitsubishi and Isuzu.
It also intends to bring in foreign investment for its
Chennai and West Bengal units.
74. It recently launched the BS-IV Ambassador Encore and is
developing a sub-4 metre version.
Besides Ambassador, HM also has Winner trucks in its
portfolio.
The company management says overall vehicle sales
would increase to 7,500 units this year.
