Entrepreneurship is the activity of an entrepreneur in which the person is in possession of a business, enterprise, venture or idea directed towards making profit. In other words, it is the comprehensive set of activities launched and set into operation by an entrepreneur in exploiting the opportunity to find a business.
The French word “entrepreneur” refers to one who embarks in an endeavor. “Entrepreneurship” refers to a venture where the entrepreneur combines the resources of land, capital and labor in creating and marketing goods or services. In this process, the entrepreneur assumes a deliberate accountability for the risks and benefits ensuing from the venture. The art or science of entrepreneurship comprises a significant amount of risk-taking to make some profit in a business.
In simple terms, an entrepreneur is the one who takes total responsibility of the risks involved in the launching, organizing and managing of a given undertaking or business. Usually, the process of entrepreneurship stands for setting up of a business by an owner investing his own money or with an obligation on the finance borrowed for the purpose.
What are Micro, Small, and Medium businesses?
The “Micro, Small and Medium Enterprises Development (MSMED) Act, 2006” is the first legislation made by the government of India that comprehensively covers micro, small and medium enterprises. For the first time, this act provides clear definitions for the terms “medium sector” and “micro enterprises”. In addition, this act has also broadened the concept of “Industries” to that of “Enterprises”.
The MSMED Act 2006 broadly classifies enterprises under two categories, namely, enterprises that are into manufacturing of goods connected to any industry and enterprises that render their services. The term “enterprise” is defined by the act on the basis of investment made by the venture in plant and machinery excluding land and building. As per the act, a micro enterprise is a venture where the investment in plant and machinery does not exceed Rs 25 lac for a manufacturing enterprise and Rs.10 lac for a service enterprise.
For small enterprises, the investment in plant and machinery can be more than Rs 25 lacs but less than Rs 5 crore in case of manufacturing enterprises and more than Rs. 10 lac but up to Rs. 2 crore for service enterprises.
Medium enterprises are defined as ventures where the investments in plant and machinery is between Rs. 5 crore and 10 crore in case of manufacturing enterprises and between Rs. 2 crore and 5 crore in case of service industries.