Class 12 Business Studies Chapter 13 Notes

NCERT Business Studies for Commerce Class 12th is a compilation of outstanding chapters that attempts to improve understanding of all elements of business and organisation. It teaches students how to run a company and where they should concentrate their efforts. The thirteenth chapter in Business Studies for Class 12 is Entrepreneurship Development. The team of Extramarks experts have created Business Studies Class 12 Chapter 13 Notes. These Chapter 13 Business Studies Class 12 Notes will help the students prepare for the forthcoming board examinations. 

Business Studies Class 12 Notes Chapter 13 Entrepreneurship Development is made with easily comprehensible language and pointwise explanation. Not limiting themselves to just Class 12 Business Studies Chapter 13 Notes, students may access several additional study materials on the Extramarks website. All materials, including NCERT book answers, CBSE revision notes, CBSE sample papers, CBSE previous year question papers, and so on, are available to students.

Key Topics Covered in Class 12 Business Studies Chapter 13 Notes

Entrepreneurship is the process of starting a business instead of engaging in any other economic activity, such as employment or practising a profession.

An entrepreneur is an individual or a person who starts a business, and the result of the process is a business unit called an enterprise. To comprehend these concepts, use the subject-verb-object (SVO)’ connection in English grammar.

The Concept of Entrepreneurship

• Entrepreneurship is contemplated as one of the four primary production factors.
• The term “entrepreneur” was initially used in economics by French economist Richard Cantillon in the early 18th century.

Meaning

Entrepreneurship is defined as a systematic, purposive, and creative process of recognising a need, mobilising resources, and organising production with the goal of providing value to consumers, returns to investors, and profits to the self while balancing the risks and uNCERTainties of business. Extramarks experts have prepared class 12 Business Studies Chapter 13 Notes, which throws light on all the aspects of Entrepreneurship.

Characteristics of Entrepreneurship

1. Systematic Activity: Entrepreneurship is a methodical, step-by-step process that demands the development of specific skills, knowledge, and competence criteria that may be studied, gained, and developed through education and vocational training. 
2. Lawful and Purposeful Activity: Entrepreneurship’s goal is to engage in lawful business. Entrepreneurship’s goal is to create value for personal profit and social benefit.
3. Innovation: Entrepreneurship is imaginative, including creating value and introducing ground-breaking, radical ideas.
4. Organisation of Production: 

• An entrepreneur mobilises resources into a productive enterprise or organisation in response to a recognised commercial opportunity.
• The Entrepreneur develops a concept that he pitches to resource providers and convinces only the financing institutions to support it. With the funds in hand, they may sign contracts to provide equipment, materials, utilities (such as water and electricity), and technology.
• To raise these in the company’s best interests, an entrepreneur needs negotiation abilities.

1. Risk-taking:

• Because the entrepreneur contracts for a guaranteed supply of various inputs for their enterprise, they assume the risk of having to pay them whether the company succeeds or not.
• Individuals who choose entrepreneurship as a career are willing to take a greater risk than those who prefer a career in employment or the practice of a profession since there is no “guaranteed” payout.

Entrepreneurship has been defined as a ‘type of behaviour’ in which one engages. 

• Attempts to tackle a problem proactively.
• Develops creative solutions by combining personal creativity and knowledge.
• Thinks beyond current resources and tries fresh ideas for capturing upcoming possibilities or addressing imminent difficulties.
• Has the conviction to persuade others of the validity of one’s views and enlist their support for the cause.
• Has the fortitude to face adversity, persevere in the face of failures, and be positive.

Extramarks provides Class 12 Business Studies Chapter 13 Notes that give students pointwise point explanations of the chapter in detail. Browse through Extramarks for these handy notes.

Relationship between Entrepreneurship and Management

This section of Class 12 Business Studies Chapter 13 Notes describes the relationship between entrepreneurship and management as given in the table below.

Functions of Entrepreneurs in Relation to Economic Development

1. Contribution to GDP: Entrepreneurs make money through organising production, whether it’s agriculture, industry, or services. Entrepreneurship is the most significant contribution to capital formation and job creation, both of which contribute to a country’s GDP.
2. Capital Formation: It is an investment choice that boosts the economy’s productive capacity and leads to capital formation.
3. Generation of Employment: Every business employs workers with abilities, skills, and certifications.
4. Generation of Business opportunities for others: Every new business in an economy offers chances for input suppliers (known as backward links) and product marketers (known as forward linkages).
5. Improvement in Economic efficiency: Entrepreneurs boost economic efficiency by

• Streamlining operations, minimising waste, and boosting output.
• Achieving technological advancement, i.e., changing labour-capital ratios.

6. Increasing the scope and spectrum of economic activities: Through their sensible decisions to sell from weak sectors and invest in strong ones, entrepreneurs would virtually alter a country’s economy from ‘underdeveloped’ to ’emerging’ to ‘developed.’
7. Impact on Local communities: Women, SC, ST, and OBC are among the marginalised groups who benefit from the small-scale enterprise.
8. Fostering the spirit of Experimentation, Exploration and Daring: Entrepreneurs aim to exploit the opportunity by experimenting with unique ideas and displaying the guts to try them,  laying the groundwork for long-term economic growth.

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Functions and role of the Entrepreneur in relation to the enterprise

Developing Exchange Relationships

1. Recognising commercial possibilities.
2. Taking control of limited resources.
3. Purchasing materials.
4. Product marketing and responding to competition

Political Administration

1. Dealing with public bureaucracy (approvals, concessions, taxes).
2. Managing the firm’s human relations.
3. Managing relationships with customers and suppliers.

Management Control

1. Finance Management
2. Managing the production process.

Technology

1. Purchasing the factory and supervising its construction.
2. Engineering in the manufacturing sector (minimising inputs with a given production process).
3. Improving the manufacturing process and the product’s quality.
4. New production processes and products are being introduced.

A brief description of the various issues

Opportunity Scouting: Entrepreneurial prospects must be searched out proactively. It can be discovered through international, domestic, and sectoral/industrial studies.

Identification of specific product offering: While the environment scan reveals multiple business possibilities, selecting a particular product or service concept is necessary.

Feasibility Analysis: The product offering concept must be technically practical, meaning that it should be possible to turn the concept into reality using current technology. And the price should be lower than the profit.

The Process of Entrepreneurship Development

This section of Class 12 Business Studies Chapter 13 Notes includes

STARTUP INDIA SCHEME

The Startup India Scheme is a government of India effort aimed at creating a strong ecosystem for the country’s innovation and startup ecosystem.

The scheme’s primary goal is to:

• Create a culture of entrepreneurship.
• Make people aware of the benefits of being an entrepreneur.
• Encourage more innovative companies by encouraging educated youngsters, scientists, and other professionals.
• Encourage the growth of entrepreneurship in its early stages.
• The entrepreneurial supply has a broad target group by serving the unique demands of disadvantaged target groups.

As per the notification issued on February 17, 2017, by the Ministry of Commerce and Industry, a startup means 

• A company or organisation that is incorporated or registered in India.
• It can’t be more than five years old.
• In any previous year, annual turnover did not reach Rs. 25 crores.
• Working to create or commercialise items, services, or procedures based on technology, IPRs, or patents.

STARTUP INDIA INITIATIVE: ACTION POINTS

• Simplification and Handholding: For the compliance of startups, simplifications are announced that are friendly and adaptable.
• Startup India Hub: The goal is to provide a single point of contact for the entire startup.
• Legal Support and Fast-tracking Patent Examination: SIPP is designed to help creative and interesting startups defend their patents, trademarks, and designs.
• Easy Exit: Procedures are in place to reallocate money in the event of a business failure and the closure of operations.
• Harnessing the private sector for incubator setup: Incubators are being built by the government under a public-private partnership model around the country.
• Tax exemption: Profits are exempt from tax for a period of three years.

Ways to fund startup

• Bootstrapping: Self-financing is a term that refers to borrowing money from one’s resources and other sources.
• Microfinance and NFBCs: Microfinance gives those who don’t have access to traditional banking services or who don’t qualify for a bank loan access to financial services.
• Crowdfunding: It’s when a group of individuals combine their resources to achieve a common goal.
• Business Incubators and Accelerators: Early-stage companies should look into incubator and accelerator programmes as a source of investment.
• Angel Investment: Individuals with extra funds interested in investing in new businesses are known as angel investors.
• Venture Capital: These funds that are invested in high-potential businesses are professionally managed.

INTELLECTUAL PROPERTY RIGHTS

• An ‘idea’ is the starting point for all productions. One might apply to the authorities after the concept becomes an actual product, i.e. Intellectual Property.
• Intellectual property (IP) refers to human mind creations such as inventions, literary and creative works, symbols, names, pictures, and commercial designs.
• Industrial property, which includes innovations (patents), trademarks, industrial designs, geographical indications, and copyrights, which provide for literary and creative works such as books, etc., are the two types of intellectual property.

IMPORTANCE OF IPR

• It promotes the development of innovative, ground-breaking innovations, such as cancer-curing medicines.
• It rewards innovators, authors, creators, and others for their efforts.
• It permits a person’s work to be distributed and conveyed to the public with their permission.
• It helps writers, producers, developers, and owners receive credit for their work.

ENTREPRENEURIAL COMPETENCIES

The term ‘competence’ refers to a person’s ability to do a task based on a combination of knowledge, abilities, and various psychological characteristics.

The Entrepreneurial Development Institute (EDI) has established a set of 15 characteristics that contribute to entrepreneurial performance and success:

• Concern for Employee Welfare 
• Monitoring
• Use of Influence Strategies
• Persuasion
• Assertiveness
• Self-confidence
• Problem-solving
• Systematic planning
• Efficiency orientation
• Commitment to work contract
• Concern for the high quality of work
• Information seeking
• Persistence: A ‘never say die’ attitude
• Sees and acts on opportunities
• Initiative 

ENTREPRENEURIAL MOTIVATION

• Need for Power (N-Pow): The desire to influence people’s or others’ behaviour in order to go on a predefined path and achieve the desired goals is known as a need for power.
• Need for Achievement (N-Ach): The urge to do something challenging is referred to as a need for achievement.
• Need for Autonomy (N-Aut): The desire for autonomy stems from a desire for independence as well as the desire to be responsible and accountable to oneself rather than an external authority for one’s performance.
• Need for Affiliation (N-Aff): Entrepreneurs have a low level of affiliation because they are and are supposed to be inventive, trend-setters, and breakers of the convention.

ENTREPRENEURIAL VALUES AND ATTITUDES

Individuals’ behavioural choices for the success of a business enterprise are referred to as entrepreneurial values and attitudes.

Class 12 Business Studies Chapter 13 Notes: Exercises and Answer Solutions

Class 12 Business Studies Chapter 13 Notes are available at the Extramarks website. Subject experts have prepared these notes as per the guidelines of CBSE. Register online with Extramarks to clear all the doubts and get access to all exercises and answer solutions. 

A list of detailed solutions for all the questions are listed below:

• Multiple Choice Questions and solutions- PDF Format: 5 Questions
• Short Answer type Questions and solutions- PDF Format: 5 Questions
• Long Answer Type Questions and solutions- PDF Format: 3 Questions

Class 12 Business Studies Chapter 13 Notes: NCERT Exemplar Class 12 Business Studies

The solutions to the NCERT Exemplar Class 12 Business Studies questions are provided here to help students prepare for their final exams. These exemplar questions are a little more challenging, and they cover a wide range of concepts presented in each chapter of the Business Studies course in class 12. At Extramarks, we provide students with Exemplar questions, problems and solutions for class 12 Business Studies chapter by chapter.

By practising this NCERT Exemplar for Business Studies class 12 questions, students will fully comprehend all of the concepts covered in each chapter. Each question in these resources is related to the topics covered in the CSBE Class 12 curriculum. Our experts provide the most effective solutions to students’ problems. All of these questions follow the question pattern as per the NCERT books.