Entrepreneurship and Innovation

This is the correct answer as the passage clearly tells us that the industry was on the brink of extinction due to the obsolescence of the designs and design making procedures.

A promoter conceives an idea for setting-up a particular business at a given place and performs various formalities required for starting a company. A promoter may be an individual, firm or association of persons or a company.

The word entrepreneur has a French origin. It originated during the Middle Ages when the term entrepreneur was applied to “a man in charge of great architectural works: castles and fortifications, public buildings, abbeys and cathedrals”. It is derived from the French word entreprendre, which means “to undertake”.

Expansion into a new line of business is an opportunity for a firm. Useful opportunities can come from things such as: • Changes in technology and markets on both a broad and narrow scale • Changes in government policy • Changes in social patterns, population profiles, lifestyle changes, etc. • Local events

Business plans are for small as well as large companies. A small company can benefit from even a simple plan that is prepared in earnest.

Strategic plan draws the clear layout of a specific business’s venture; vision, mission, objectives, competencies, managerial abilities, technical proficiencies and sources of fund. A business plan is a document that summarises the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realised. Thus, business plan cannot replace strategic plan. It lays down the best growth path and strategy.

Business plan does not emphasise on ideas and concepts only. The process of developing a business plan also involves determining the resources required, obtaining those resources and successfully managing the resulting venture.

The primary task for running a successful venture is creating an idea.

Following are the characteristics of entrepreneurship: – Innovation – Risk taking – Vision – Organising skills

It is given in the 1^st line of the 2^nd paragraph.

A long-term start-up capital provided to new entrepreneurs is called venture capital.

A business generates employment opportunities for the people in the society. This is not an economic objective, but a social objective.

Risk sharing decreases the chances of losses.

Uncertainty of return refers to the lack of knowledge relating to the amount of money that the business is going to earn in a given period. Every business invests money or capital to run its activities with the objective of earning profit. But it is not certain as to what amount of profit will be earned. Also, there is always a possibility of losses being incurred, in spite of the best efforts put into the business.

Business combinations are NOT limited only to joint stock companies - they can occur between partnerships, LLPs, sole proprietorships, and other business entities. Statement B is therefore incorrect. The other statements are valid: firms do combine to avoid wasteful competition, they may combine to leverage patent rights, and during depressions, financially strong firms often absorb smaller ones.

The primary objective of starting a business is to generate profit, which is the difference between revenue and expenses. While serving people may be a secondary goal or mission, earning profit is what sustains a business and is its fundamental economic purpose. Assets and liabilities are balance sheet items, not objectives.

The going concern concept assumes that the business entity will continue its operations for an indefinite period. This assumption allows the business to value its assets based on their long-term utility rather than their immediate liquidation value.