Unit 8: Entrepreneurship Development and Small Business

Kendriya Vidyalaya Sangathan (KVS)

• KVS is a central government school system
• Zonal Institute of Education and Training, Chandigarh is one of the institutes under KVS

Study Material for Class XI Business Studies (2023-24)

• Subject Code: 054
• Total Marks: 80 (Theory: 80, Project: 20)
• Duration: 3 hours

Part A: Foundations of Business

• Unit 1: Evolution and Fundamentals of Business
  • History of Trade and Commerce in India
  • Meaning and characteristics of business
  • Objectives of business
  • Classification of business activities (industry and commerce)
  • Types of industries (primary, secondary, tertiary)
  • Commerce-trade (types: internal, external; wholesale and retail) and auxiliaries to trade
  • Business risk concept
• Unit 2: Forms of Business Organizations
  • Sole Proprietorship: concept, merits, and limitations
  • Partnership: concept, types, merits, and limitations
  • Hindu Undivided Family Business: concept
  • Cooperative Societies: concept, merits, and limitations
  • Company: concept, merits, and limitations (private, public, and one person company)
• Unit 3: Public, Private, and Global Enterprises
  • Public sector and private sector enterprises: concept
  • Forms of public sector enterprises
  • Global Enterprises: feature, joint venture, and public-private partnership
• Unit 4: Business Services
  • Business services: meaning and types
  • Banking: types of bank accounts and services
  • Insurance: principles (utmost good faith, insurable interest, indemnity, contribution, and doctrine of subrogation)
  • Postal Service: mail, registered post, parcel, speed post, and courier
• Unit 5: Emerging Modes of Business
  • E-business: concept, scope, and benefits
• Unit 6: Social Responsibility of Business and Business Ethics
  • Social responsibility of business: concept and case
  • Responsibility towards owners, investors, consumers, employees, government, and community
  • Business Ethics: concept and elements

Part B: Finance and Trade

• Unit 7: Sources of Business Finance
  • Business finance: concept, nature, and importance
  • Owners' funds (equity shares, preference shares, retained earnings)
  • Borrowed funds (debentures, bonds, loans from financial institutions and commercial banks, trade credit, and inter-corporate deposits)
• Unit 8: Small Business and Enterprises
  • Entrepreneurship Development: concept, characteristics, and need
  • Small scale enterprise: concept and role in India
  • Government schemes and agencies for small scale industries
• Unit 9: Internal Trade
  • Internal trade: meaning and types
  • Wholesaling and retailing: types and functions
  • GST (Goods and Services Tax): concept and key features
• Unit 10: International Business
  • International trade: concept and benefits
  • Export trade: meaning, procedure, and documents
  • Import trade: meaning, procedure, and documents
  • World Trade Organization (WTO): meaning and objectives

Project Work

• Guidelines for teachers to launch projects in Business Studies
• Objectives of Project Work:
  • Develop a practical approach using modern technologies
  • Get exposure to the operational environment in business management and related services
  • Inculcate important skills of teamwork, problem-solving, time management, information collection, and analysis
  • Get involved in research work and demonstrate capabilities while working independently
  • Make studies an enjoyable experience### Evolution of Business
• History of trade and commerce in India:
  • Indigenous Banking System: Hundi, an instrument of exchange used in old times
  • Rise of Intermediaries: Commission agent, broker, distributor, and banks (commercial, industrial, and agricultural)
  • Maritime Trade: Malabar Coast, Muziris, and Calicut were major ports
  • Trade Centres: Pataliputra, Peshawar, Taxila, Indraprastha, and Mathura
• Meaning of business:
  • Economic and non-economic activities
  • Features and objectives of business
  • Concept and difference between Business, Profession, and Employment
  • Role of profit in business
• Classification of business activities:
  • Industry: Types of industry (e.g., manufacturing, construction, and service)
  • Commerce: Trade and auxiliaries to trade (e.g., transportation, warehousing, and advertising)
• Business risk:
  • Concept, nature, and causes of business risk
  • Factors that affect business risk

Trade and Commerce in Ancient India

• Indian Sub-Continent in the World Economy:
  • Connected to adjoining foreign countries through the Silk Route and Spice Route
  • Major trade centers and ports (e.g., Malabar Coast, Muziris, and Calicut)
• Features of Indian Trade:
  • Import and export of goods (e.g., spices, textiles, diamonds, and pearls)
  • Use of Hundi as an instrument of exchange
  • Rise of merchant corporations and their role in promoting trade

Major Trade Centres in Ancient Times

• Pataliputra (Patna):
  • Known for exporting stones
  • Commercial town and center for export of goods
• Peshawar:
  • Important exporting center for wool and importing horses
  • Major share in commercial transactions between India, China, and Rome
• Taxila:
  • Major center on the land route between India and Central Asia
  • Financial and commercial banks, and a center of learning
• Indraprastha:
  • Commercial junction on the royal road
  • Routes from South India converged here
• Mathura:
  • Emporium of trade
  • People subsisted on commerce
  • Many routes from South India touched Mathura and Broach### Ancient Indian Cities and Trade
• Varanasi was a major textile industry centre, famous for gold silk cloth and sandalwood workmanship, and had links with Taxila and Bharuch.
• Mithila was a trading hub, with traders crossing the seas to trade at ports in Java, Sumatra, and Borneo, and establishing colonies in South China, particularly in Yunnan.
• Ujjain was a centre of trade, exporting agate, carnelian, muslin, and mallow cloth to different centres, and had trade relations with Taxila and Peshawar.
• Surat was a major emporium of western trade during the Mughal period, famous for its gold-bordered textiles, and its hundis (bills of exchange) were honoured in markets as far as Egypt and Iran.
• Kanchi (modern-day Kanchipuram) was a hub for foreign trade, where Chinese merchants came to purchase pearls, glass, and rare stones, and sold gold and silk.
• Madura was a capital city that controlled the pearl fisheries of the Gulf of Mannar and attracted foreign merchants, including Romans, for overseas trade.
• Broach was a major commercial centre in Western India, situated on the banks of the Narmada River and linked to all important marts by roadways.
• Kaveripatta (modern-day Kaveripatnam) was a scientifically constructed city, providing facilities for loading, unloading, and storing merchandise, and was a hub for foreign traders, particularly from Malaysia, Indonesia, China, and the Far East.
• Tamralipti was a major port connected by sea and land to the West and the Far East, and was linked to Banaras and Taxila by road.

Human Activities

• Human activities are classified into economic activities and non-economic activities.
• Economic activities are performed to earn a living, and are of three types: business, profession, and employment.
• Non-economic activities are performed out of love, affection, or sympathy, and are not motivated by profit.

Characteristics of Business Activities

• Business activities are economic activities that involve the sale or exchange of goods and services to satisfy societal needs and earn a profit.
• Characteristics of business activities include:
  • An economic activity that earns a profit.
  • Sale or exchange of goods and services for creating value.
  • Dealings in goods and services on a regular basis.
  • Production or procurement of goods and services.
  • Profit earning.
  • Uncertainty of return.
  • Element of risk.

Comparison of Business, Profession, and Employment

• Business: Entrepreneur's decision, provision of goods and services, profit earned, capital investment required, risk present, transfer of ownership possible.
• Profession: Membership of a professional body, rendering of personalized services, professional fee earned, limited capital required, some risk.
• Employment: Appointment letter, performing work for someone else, salary or wages earned, no capital required, fixed and regular income.

Multiple Objectives of Business

• Economic objectives:
  • Survival.
  • Profit.
  • Growth.
• Social objectives:
  • Supply of desired quality of products.
  • Avoidance of unfair trade practices.
  • Employment generation.
  • Social service or community service.
  • Avoidance of pollution.
• Human or personal objectives:
  • Providing good working conditions.
  • Payment of competitive and satisfactory wages and salaries.
  • Personal growth and development of employees.
  • Peer recognition and respect.

Role of Profit in Business

• Survival.
• Expansion and growth.
• Symbol of efficiency or an index of performance.
• Reward for bearing the risk.
• Helps to gain reputation of goodwill.

Classification of Business Activities

• Industry:
  • Primary industry (extractive and genetic industries).
  • Secondary industry (manufacturing, analytical, synthetic, processing, and assembly industries).
  • Tertiary industry (support services to primary and secondary industries).
• Commerce:
  • Trade (internal and external trade, wholesale and retail trade, imports, exports, and entreport).
  • Auxiliaries to trade (transportation, communication, banking and finance, insurance, warehousing, advertising, and middlemen).

Business Risk

• Nature of business risks:
  • Risk is an essential part of every business.
  • Business risks arise due to uncertainties.
  • Degree of risk depends on the nature and size of business.
  • Profit is the reward for risk-taking.
• Causes of business risks:
  • Natural causes.
  • Human causes.
  • Economic causes.
  • Other causes.

Factors for Starting a Business

• Selection of type of business.
• ...