PROJECT REPORT

OF
RESEARCH METHODS AND METHODOLOGY

FACTORS INFLUENCING THE RATE OF GROWTH OF

STARTUPS IN INDIA

Submitted To:
Prof. B.K Soam

GROUP 6
Shivam Gupta – 18PGDM105
Saurabh Kumar Gupta – 18PGDM102
Shubham Garg – 18PGDM111
Shubham Gupta – 18PGDM112
Shubham Gusain – 18PGDM113
Shashank Kalra - 18PGDM103

1
 Table of Content
Sr. No. TOPIC Page No.
Acknowledgment 3
Literature Review 4
Executive Summary 5
1 Introduction 7
1.1 Definition of Entrepreneurship 7
1.2 Definition of Entrepreneur 8
1.3 Exploratory Research 9
1.4 Reason of Research 9
1.5 Methodology & Research Design 11
2 Demographics Study 12
2.1 Gender Study 12
2.2 Literary Study 13
2.3 Employment Study 13
2.4 Family Income Study 14
2.5 Background Study 16
2.6 Age Study 17
3 Results 18
3.1 T-test of Respondents 18
3.1.1 Hypothesis 18
3.1.2 Entrepreneurs & Aspiring Entrepreneurs 19
3.1.3 Only Entrepreneurs 22
3.2 ANOVA Test of Respondents 29
3.2.1 Hypothesis 29
3.2.2 Entrepreneurs & Aspiring Entrepreneurs 30
3.2.3 Only Entrepreneurs 31
4 Conclusion 34
5 References 34
6 Questionnaire 35

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 ACKNOWLEDGEMENT
Without the consistent help, cooperation & encouragement of each group member we
would not have progressed in the project.

We wish to express our deep gratitude to Prof. B. K. Soam for providing us an

opportunity to work on this project. We are highly indebted to him, for his consistent
guidance and support. We would like to extend our gratitude to IMI New Delhi for giving
us this chance.

Last but not the least our thanks goes to all our friends and batch mates who directly or
indirectly helped us complete this project report.

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 Literature Review

Understanding the earlier literature on the factors impacting formation of a new venture builds credibility.
Many scholars have worked on this construct. Young, E.C., Welsch, H.P. (1993) suggest through their
study that the factors influencing entrepreneurship are financial independence, zeal to supplement family
income, family encouragement and other encouraging support groups, need of new lifestyle, extension of
credit from suppliers & discriminatory practices. Business regulation factors like government regulatio ns,
lack of working capital, lack of financial information which influence entrepreneurship. The negative
factors are business obstacles like obtaining a loan, finding good location, lack of counsel or knowledge
and individual obstacles like lack of encouragement, lack of confidence in customers and risk of startup.

Startienė, G., & Remeikienė, R (2008) suggest through their study that there are various factor groups
influencing gender gap in entrepreneurship such as demographic factors like Age, Education, Gender
Experience in related field; economic factors like Initial Investment Easiness of Financing; institutio na l
and government factors like capital availability; organizational factors; social and psychological factors;
and cultural factors. Whereas Gaddam, S. (2007) proposes, two factors influencing entrepreneurs hip,
external and internal. The external factors can be broadly classified into economic factors like trade
policies, taxation levels, government intervention, regulations and monetary policies and per capita
income. The internal factors can be classified into the need for achievement, locus of control and risk
bearing capacity. Other factors are demographic factors like age, experience, education; environme nta l
factors; cultural factors like the recognition that is given to venture creators, the prevailing attitudes
towards success and failure and the degree to which people regard the pursuit of opportunities as socially
legitimate; social factors like lifestyle, tastes and preference. Other factors stated are socio personal such
as resistance from family, indifferent attitude of society, male dominance, limited liberty given to women;
motivational factors such as run the business successfully, setting up another enterprise, expansion, socio
economic needs; location factors such as power supply, industrial environment, credit facility, availability
of raw material, skilled man power. The discouraging factors are discouragement from family,
competition, inadequacy of credit and difficulty in getting technical know-how (service sector).
Regulative component contains factors like government support towards entrepreneurship, strong rules of
law and enforcement mechanism. Normative component contains factors like societal perception of

4
entrepreneurs and societal expectation from entrepreneurs. Cognitive component deals with factors like
assessment of entrepreneurship as an occupation and relationship between culture and entrepreneurship.

Lewis, Prestin; Lu, Wei; Yin Hao; Li, Yong; Vaccaro, Louis C, (2013) suggest through their study that
there are three major forces that govern entrepreneurship environment- culture, economics and policy.
Culture is determined by number of hours worked, likeliness to become an entrepreneur and social network
(level of trust and strength). Economic environment is determined by chances that the venture will succeed
and funding opportunities whereas different policies that affect entrepreneurship are taxation policy, legal
approval to start a business and government sponsored programs to start a business.

5
 Executive Summary

Abstract of Our Study

The research purpose is to explore the factors influencing the rate of growth of startups. It highlights
attributes which directly influence the growth in the number of startups in a country. Entrepreneur ia l
intentions too have been dealt with. A range of issues and themes have been examined through secondary
research. The overview includes data from salient published articles that empirically assessed the effects
of key variables, both from internal/external/environmental context on entrepreneurship. The primary
research includes a survey being conducted over a sample size of 101 respondents among which 21
entrepreneurs across the country, the findings and results will be used by other researchers, business
support agencies in this field and government strategists to design the policies according to that.

Objectives of the study

The study has following objectives

a. To identify the causes of increasing growth of Startups in India

b. To study the identified causes descriptively.
c. To map the variety of causes with respect to geography and type of startup.
d. To make suitable measures that can be taken by the government to incubate startups

Research Questions

a. What are the reasons for the increased rate of growth of startups?
b. Which factors are most sensitive?
c. How closely increasing startups is related to demographics of entrepreneurs?

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 Introduction

Definitions of entrepreneurship
To understand entrepreneurship, it is important to view the definitions from earlier research on the subject.
In the early 20th century, Schumpeter, J., insisted that entrepreneurship was far too important a part of
capitalism to be ignored. He proposed that innovation or the use of an invention to create a new product
or service was the driving force behind the creation of new demand for goods and services. The market
was, therefore, not perfect but chaotic because of the regular occurrence of entrepreneurs entering the
market with new innovations. This process of “creative destruction” destroyed the static market described
by the neoclassicists and created a dynamic market which had continuous changes in buyer and supplier
behavior. It was these entrepreneurs who developed innovations to create new demand that was the
mechanism of wealth creation and distribution.
Kirzner, I, (1973), influenced by the Austrian school, made a further contribution to entrepreneurs hip
theory. He defined entrepreneurs as individuals who grasp opportunities for pure entrepreneurial profit
and they did this by uncovering unnoticed profit opportunities by being alert to them. Whereas (Stevenson,
2006) in his definition included the following factors, pursuit of opportunity; rapid commitment and
change; multi-stage decision making; using other peoples’ resources, managing through networks and
relationships and compensating for value created .Entrepreneurship, a much debated topic, has been
defined by (Collins and Moore, 1970) in the for-profit literature as “the catalytic agent in society which
sets into motion new enterprises, new combinations of production and exchange.” Low and MacMilla n
(1988) define entrepreneurship as "creation of new enterprise". According to Shane and Venkataraman
(2000), entrepreneurship is a field of business, that seeks to understand how opportunities, create
something new (new products or services, new markets, new production processes, new ways of
organizing) and are discovered or created by individuals (entrepreneurs) and how various means are used
to exploit or develop these opportunities into business ventures. To put it simply, entrepreneur s hip
involves recognizing an opportunity to create a new business venture (Eckhardt& Shane, 2003).
Entrepreneurship has been considered as the engine of economic growth (Schumpeter, 1942) and has
gained importance over the years.

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Who is an Entrepreneur?

An entrepreneur is a person who undertakes a venture with some profit potential and involving a
considerable amount of risk and therefore,
entrepreneurship is the venture undertaken by the
entrepreneur.

Entrepreneurs have been on a rapid growth phase

over the past decade. Resources available to
most entrepreneurs are scarce and limited. In
India, 38.8% entrepreneurs are necessity
entrepreneurs, while around 35.9% fall under the
opportunity entrepreneurs’ category (Global
Entrepreneurship Monitor, Global report 2013).

There exists the need for an in-depth study which will help understand the growth of entrepreneurs. The
objective of the researchers has been an attempt through the exploratory study to establish the factors that
influence entrepreneurship. The success of venture creation depends on the individual, environme nt,
economic and financial factors.

An assessment of factors influencing entrepreneurship would ensure that the right eco system for breeding
successful entrepreneurs exists. Once entrepreneurial motivating factors, challenges in setting up ventures
and the external conditions are identified, the entrepreneurs can work towards overcoming these
challenges. Knowing aspects of entrepreneurial success will be a value addition to the upcoming
entrepreneurs.

Our Exploratory Research

We conducted an Exploratory research regarding factor that influence the growth of startups in India. In
our Exploratory research, we conducted a focus group analysis that discussed on factors that are most

8
important of all. After a long discussion, we selected few factors which were highlighted by group as most
significant for research.

Figure 1: Factors considered for questionnaire

Combining the above-mentioned factors with literature review, we made our questionnaire and asked for
inputs from our target audience.

Reason of Research

Entrepreneurs have been on a rapid growth phase over the past decade. With an increase in numbers comes
greater competition and quest for perfection. Resources available to most entrepreneurs are scarce and
limited. In India 38.8% entrepreneurs are necessity entrepreneurs, while around 35.9% fall under the
opportunity entrepreneurs’ category (Global Entrepreneurship Monitor, Global report 2013).

9
There exists the need for an in-depth study which will help understand the growth of entrepreneurs. The
objective of the researchers has been an attempt through the exploratory study to establish the factors that
influence entrepreneurship in India. The success of venture creation depends on the individ ua l,
environment, economic and financial factors. An assessment of factors influencing entrepreneurs hip
would ensure that the right eco system for breeding successful entrepreneurs exists. Entrepreneurs do not
have the luxury of time or resources when starting up, hence awareness of the relevant aspects that support
growth would prove useful. Once entrepreneurial motivating factors, challenges in setting up ventures and
the external conditions are identified, the entrepreneurs can work towards overcoming these challenges.
Knowing aspects of entrepreneurial success will be a value addition to the upcoming entrepreneurs.
Secondary research for theoretical comprehension and primary for current practices being undertaken was
attempted through quantitative research. The survey questionnaire was adapted & modified from,
(Cohoon. J. M., Wadhwa M & Mitchell M, 2010), “The anatomy of an entrepreneur, are successful women
entrepreneurs different from men”. Prior to administering the modified questionnaire inputs were drawn
from six academicians in entrepreneurship. They contributed in providing critique in constructing the
modified questionnaire. Empirical, conceptual and works of practitioners were chosen for concept
understanding from databases of Ebsco, Proquest and the internet. Entrepreneurship is a vast area and
hence the study has been limited to only the factors influencing entrepreneurship. Unfortunately, no
reliable database of entrepreneurs from which to draw exists. Existing lists of entrepreneurs are limited in
their scope, tend to contain many inaccuracies and require considerable purging and correcting.

Methodology & Research Design

The sampling methodology used was convenience or snowball sampling because it was difficult to identify
the established and budding entrepreneurs. The sample consisted of student entrepreneurs, owners of
successful startups who had visited a business school campus, entrepreneurial friends & acquaintances.
Permission for data collection was obtained from the respondent, later an online form through the
administering of a structured questionnaire with forty questions was used to obtain data.

10
We got one hundred and one responses. Many reminders too were also sent. No response was found
erroneous and was discarded. Organizations like Brunchcare, Topper’s Notes, Easy Spotlight, Innov8
Apps and Pioneer Solution that support entrepreneurship were also sent the questionnaires to forward to
their networks.
Inferential statistics has been the method used where statistics gathered from a sample has been used to
reach conclusions regarding the population. The responses were then coded and later the data was
tabulated in MS Excel. The data analysis was then carried out using statistical software SPSS. The
following methods of analysis were used, frequency distribution, t test, testing of hypothesis, ANOVA.
All hypotheses were tested at 5% level of significance. Participants were informed that the study was being
conducted to complete an academic paper and that their responses would be kept confidential and their
participation was voluntary. It was assumed that the respondents are truthful when responding to questions
on the survey and that entrepreneurship is critical to them.

Demographics Study:

Gender Study: - From the table we can observe that 67.3% of respondents are males and 32.7% females
which signifies that the number of male entrepreneurs is more than female entrepreneurs.

Tab le 1: Gender Distrib ution

Frequency Percent Valid Percent Cumulative Percent

Male 68 67.3 67.3 67.3

Female 33 32.7 32.7 100.0

Valid Total 101 100.0 100.0

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 Figure 2: Gender Distib ution

Education Study: - According to response 50% entrepreneurs have got bachelor’s degree before
starting their venture and 43% have done their master’s before starting any venture which signifies that
education inhibit the mindset of entrepreneur to start-up.

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 Tab le 2: Education Qualification
Frequency Percent Valid Percent Cumulative Percent

5.0
Secondary education or high
school 5 5.0 5.0 5.9

Vocational Qualification
1 1.0 1.0 56.4
Bachelor's degree
51 50.5 50.5 99.0
Master's degree
43 42.6 42.6
100.0
Professional Certification
1 1.0 1.0
Valid Total 101 100.0 100.0

Figure 3: Education Qualification

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Employment Status Study : - From the table we can observe that maximum respondents are students
who want to start their venture in future. It is interesting to note that 12.9% employees who is currently
doing job want to start their own venture.

Tab le 3: Employment Status

Frequency Percent Valid Percent Cumulative Percent

Self-Employed 12 11.9 11.9 11.9

13 12.9 12.9 24.8

Job

Student 76 75.2 75.2 100.0

Valid Total 101 100.0 100.0

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 Figure 4: Employment Status

Family Income Study: - From the table we can observe that maximum entrepreneur belongs to middle
class families with family income of 5-15 Lacs per annum because of potential and attractiveness of
becoming successful.

Tab le 4: Family Income

Frequency Percent Valid Percent

Cumulative
Percent

27 26.7 26.7
26.7
Up to 5 Lacs
29 28.7 55.4
28.7
5-10 Lacs
27 26.7 26.7 82.2
10-15 Lacs

Above 15 Lacs 18 17.8 17.8 100.0

Valid Total 101 100.0 100.0

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 Figure 5: Family Income

Background Study: -
Tab le 5:: Business Background

Frequency Percent Valid Percent

Cumulative
Percent

No 52 51.5 51.5 51.5

Yes 49 48.5 48.5 100.0

Valid Total 101 100.0 100.0

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 Figure 6: Business Background

Age Study: - From the table we can observe that maximum respondent belong to the age bracket of 23-
25 years followed by 20-22 years as India is a young population country and maximum people from these
age bracket seeks employment opportunity

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 Tab le 6: Age of Respondents

Frequency Percent Valid Percent Cumulative

Percent

2 2.0 2.0 2.0

38 37.6 37.6 39.6

17-19 years
48 47.5 47.5 87.1
20-22 years
8 7.9 7.9 95.0
23-25 years

26-28 years 2 2.0 97.0

2.0
29-31 years 1 1.0 98.0
1.0
35-37 years
1 1.0 1.0 99.0
41-43 years
1 1.0 1.0 100.0
44-46 years

Valid Total 101 100.0 100.0

Figure
7: Age Distrib ution

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 Results of The Study
The respondents were given a set of parameters and asked to determine their perception towards it. A five -
point rating scale was used to judge the responses, where (1) = Not at all important, (2) = slightly
Important, (3) = important (4) = Fairly Important and (5) = very important. Similarly, challenges were
rated, where (1) indicates not a challenge, (2) indicates small challenge, (3) indicates moderate challenge
(4) represents big challenge (5) indicates extremely big challenge.
On conducting a frequency distribution for the demographics of the entrepreneur like gender, age groups,
city, education, Family Income, Employment Status and Inheritance of Business, following results can be
obtained.

One sample t - test

In the present study, for the hypothesis a two tailed test was used, and a 0.05 level of significance seemed
appropriate for this decision. The method is measured on a five-point scale where (1) indicates not at all
important, (2) indicates unimportant, (3) neither important nor unimportant (4) represents important (5)
indicates very important.

Hypothesis
H0: µ ≤ 3, respective factor is un-important for the growth of start-ups in India
H1: µ > 3, respective factor is very important for the growth of start-ups in India

P value < alpha: Null Hypothesis will be rejected

P value > alpha: Null Hypothesis will be accepted

Entrepreneurs and aspiring Entrepreneurs

Below mentioned is the table of people involved in a startup and who wish to have their startup. It is
showing the P-value with respective factors depicting decision to accept or reject the null hypothesis, thus
inferring whether the given factor is very important to affect the growth of startups or not.

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 Tab le 7: One-Sample Test of Entrepreneurs and aspiring Entrepreneurs

One-Sample Test

Test Value = 3

t df Sig. Mean 95% Confidence Hypothesis

(2tailed) Difference Interval of the Testing
Difference

Lower Upper

Internal Factors

Team Motivation 11.618 100 .000 1.168 .97 1.37

P < α; H0 is
rejected

Innovation of idea 11.159 100 .000 1.129 .93 1.33 P < α; H0 is

rejected

Risk bearing 13.752 100 .000 1.218 1.04 1.39

P < α; H0 is
Capacity rejected

Ownership (Locus 8.876 100 .000 .871 .68 1.07

of control) P < α; H0 is
rejected

Economic factors

Initial Investment 6.434 100 .000 .683 .47 .89 P < α; H0 is

rejected

Easiness of 7.644 100 .000 .743 .55 .94

P < α; H0 is
Financing rejected

20
Break Even Period 7.575 100 .000 .762 .56 .96
P < α; H0 is
rejected

ROI (return on 9.860 100 .000 .911 .73 1.09 P < α; H0 is

rejected

investment)

Demographics

Age - 100 .000 -.990 -1.19 -.79

P < α; H0 is
10.001
rejected

Education .000 100 1.000 .000 -.21 .21 P < α; H0 is

rejected

Gender - 100 .000 -1.604 -1.74 -1.46

P < α; H0 is
22.761 rejected

Experience in 3.668 100 .000 .386 .18 .60

related field P < α; H0 is
rejected

Environment

Competition 5.835 100 .000 .663 .44 .89

P < α; H0 is
rejected

Supplier's 10.462 100 .000 .941 .76 1.12

Availability and P < α; H0 is
relations rejected

21
 Availability of 8.116 100 .000 .752 .57 .94
labor P < α; H0 is
rejected

Customer 10.222 100 .000 .911 .73 1.09

perception of P < α; H0 is
Industry rejected

Social & Cultural

Social Network 7.683 100 .000 .802 .59 1.01 P < α; H0 is rejected

Awareness of the 10.009 100 .000 .970 .78 1.16 P < α; H0 is rejected
relevant aspects

Support from Family 4.139 100 .000 .475 .25 .70 P < α; H0 is rejected
& Relatives

Entrepreneurial 1.732 100 .086 .198 -.03 .42 P > α; H0 is

training education accepted

Business factors

Bureaucratic 3.857 100 .000 .436 .21 .66 P < α; H0 is rejected

Procedures

Import/export policies 3.092 100 .003 .347 .12 .57 P < α; H0 is rejected

Tax Policy 7.092 100 .000 .772 .56 .99 P < α; H0 is rejected

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 Ease in Winding 3.770 100 .000 .436 .21 .66 P < α; H0 is rejected
Up

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Challenges Faced by Entrepreneurs and Aspiring Entrepreneurs

Table 8: One-Sample Test Challenges Faced by Entrepreneurs and Aspiring Entrepreneurs

One-Sample Test

Test Value = 3

t df Sig. Mean 95% Hypothesis Testing

(2tailed) Difference Confidence
Interval of the
Difference

Lower Upper

Challenges

Family or financial 4.213 100 .000 .446 .24 .66 P < α; H0 is rejected
pressures to keep a
traditional, steady
job

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Amount of time and 7.935 100 .000 .792 .59 .99 P < α; H0 is rejected
effort required

Lack of industry 8.574 100 .000 .822 .63 1.01 P < α; H0 is rejected
knowledge

Lack of available 6.365 100 .000 .614 .42 .81 P < α; H0 is rejected
mentors or
advisors

Lack of prior 4.140 100 .000 .446 .23 .66 P < α; H0 is rejected
experience in

running a business

As compare to the response from those who already have startups differs from the consensus. The tacit
knowledge of working in the startup and leading the startup firm makes the responses to be skewed.

Only Entrepreneurs
Below mentioned is the table of people already involved in a startup and it is showing the P-value with
respective factors depicting decision to accept or reject the null hypothesis, thus inferring whether the
given factor is very important to affect the growth of startups or not.

Table 9: One-Sample Test of Only Entrepreneurs

One-Sample Test

Test Value = 3

25
 t df Sig. Mean 95% Hypothesis Testing
(2tailed) Difference Confidence
Interval of the
Difference

Lower Upper

Internal Factors

Team Motivation 8.315 20 .000 1.476 1.11 1.85

P < α; H0 is rejected

Innovation of idea 2.752 20 .012 .714 .17 1.26

P < α; H0 is rejected

Risk bearing 5.876 20 .000 1.190 .77 1.61

Capacity P < α; H0 is rejected

Ownership 4.264 20 .000 .952 .49 1.42

(Locus of control) P < α; H0 is rejected

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Economic factors

Initial Investment 1.503 20 .149 .333 -.13 .80

P > α; H0 is accepted

Easiness of 1.985 20 .061 .524 -.03 1.07

Financing P < α; H0 is rejected

Break Even 3.005 20 .007 .667 .20 1.13

Period P < α; H0 is rejected

ROI (return on 3.101 20 .006 .714 .23 1.19

investment) P < α; H0 is rejected

Demographics

Age -3.416 20 .003 -1.000 -1.61 -.39

P < α; H0 is rejected

Education -2.227 20 .038 -.524 -1.01 -.03

P < α; H0 is rejected

Gender - 20 .000 -1.762 -2.01 -1.52

14.981 P < α; H0 is rejected

Experience in .152 20 .880 .048 -.60 .70

related field P > α; H0 is accepted

Environment

27
 Competition 2.646 20 .016 .667 .14 1.19
P < α; H0 is rejected

Supplier's 5.319 20 .000 1.095 .67 1.52

Availability and
P < α; H0 is rejected
relations

Availability of 3.516 20 .002 .905 .37 1.44

labor P < α; H0 is rejected

Customer 4.583 20 .000 1.000 .54 1.46

perception of
P < α; H0 is rejected
Industry

Social & Cultural

Social Network 4.264 20 .000 .952 .49 1.42

P < α; H0 is rejected

Awareness of the 4.932 20 .000 1.048 .60 1.49

relevant aspects P < α; H0 is rejected

Support from 2.444 20 .024 .619 .09 1.15

Family &
P < α; H0 is rejected
Relatives

Entrepreneurial -.894 20 .382 -.238 -.79 .32

training education P > α; H0 is accepted

Business factors

28
 Bureaucratic .000 20 1.000 .000 -.50 .50
Procedures P < α; H0 is rejected

Import/export .000 20 1.000 .000 -.56 .56

policies P < α; H0 is rejected

Tax Policy 1.128 20 .273 .333 -.28 .95

P > α; H0 is accepted

Ease in Winding .346 20 .733 .095 -.48 .67

Up P > α; H0 is accepted

Challenges Faced by Entrepreneurs and Aspiring Entrepreneurs

Table 10: One-Sample Test of Challenges Faced by Entrepreneurs and Aspiring Entrepreneurs

One-Sample Test

Test Value = 3

t df Sig. Mean 95% Hypothesis

(2tailed) Difference Confidence Testing
Interval of the
Difference

Lower Upper

Challenges

29
 Family or financial .000 20 1.000 .000 -.58 .58 P < α; H0 is
pressures to keep a rejected
traditional, steady job

Amount of time and 3.344 20 .003 .762 .29 1.24 P < α; H0 is

effort required rejected

Lack of industry 2.914 20 .009 .619 .18 1.06 P < α; H0 is

knowledge rejected

Lack of available 2.772 20 .012 .619 .15 1.08 P < α; H0 is

mentors or advisors rejected

Lack of prior .777 20 .446 .190 -.32 .70 P > α; H0 is

experience in running accepted

a
business

30
Internal factors include- Team Motivation, Innovation of Idea, Risk Bearing Capacity, Locus of Control.
The P-value of these internal factors is less than 0.05 thus the null hypothesis is rejected. Given factors
thus were very important for the growth of startups. The given effect is due to the mean being skewed
towards right to wards very important.

In External factors, economic factors including- initial investment, easiness of financing, break even
period, ROI (rate of return). The P-value of these economic factors, except initial investment, are less than
0.05 thus the null hypothesis of easiness of financing, break even period, ROI (rate of return) factors are
rejected. Initial investment in economic factors is not much important, and rest factors are very important
for any startup to grow. The responses in the economic factors are skewed to the very important.

Demographics section in the external factors includes- age, education, gender, experience in relevant field.
The P-value of the demographic factors except experience in relevant field is less than 0.05 thus the null
hypothesis of age, education, gender is rejected and for rest null hypothesis is not rejected. Age, education
and gender produce significant effect in the growth of startup but the experience in relevant doesn’t have
significant effect in the growth. The responses in the demographics section are spread across the ends thus
having mean near to neutral with deviation.

Environment factor of the industry includes-competition, supplier’s availability, availability of labor and
customer perception of industry. The P-value of all the environment factors are less than 0.05 thus the null
hypothesis of these factors are rejected. The environment factors are very important to affect the growth
of startups.

Social-cultural factor of the industry includes-social network, awareness of relevant aspects, support from
family & friends and entrepreneurial education & training. The P-value of all the environment factors
except entrepreneurial education & training are less than 0.05 thus the null hypothesis of these factors are
rejected. The social-cultural factors are very important to affect the growth of startups except education &
training.

Business factor of the industry includes-bureaucratic procedure, import/export policies, tax policies, ease
in winding up. The P-value of bureaucratic procedure, import/export policies is more than the 0.95 critica l

31
significant value thus null for these is rejected but for other two tax policies and ease of winding up doesn’t
have significant effect in the growth factor of startup.

Table 11: Statistics

Statistics

Internal Economic Demographics Environmental Socio- Business

Cultural factor

N Valid 101 101 101 101 101 101

Missing 0 0 0 0 0 0

Mean 4.0965 3.7748 2.4480 3.8168 3.6114 3.4975

From the statistical analysis we see that the following factors are considered significantly important;
Internal factors (includes Team Motivation, Innovative Idea, Risk bearing Capacity & Locus of Control)
is considered most important among all factors with mean of 4.0965 and Demographics (Age, Education,
Gender and Experience) is considered least important with mean of 2.4480 by the entrepreneurs. We can
interpret that starting a venture will not depend on the age, gender, experience and education of
entrepreneurs. Environmental factor (Competition, Suppliers, Labor and Customer perception) is also
considered important with mean of 3.8168.

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CHALLENGES

Table 12: One-Sample Statistics of Challenges

N Mean Std. Deviation Std. Error Mean

Family or financial pressures to 101 3.45 1.063 .106

keep a traditional, steady job

Amount of time and effort 101 3.79 1.003 .100

required

Lack of industry knowledge 101 3.82 .963 .096

101 .969 .096

Lack of available mentors or 3.61
advisors

101 1.081 .108

Lack of prior experience in 3.45
running a business

33
 Table 13: One-Sample Test of Challenges

O ne-Sample Test

Test Value = 3

t df Sig. (2tailed) Mean 95% Confidence Interval

Difference of the Difference

Lower Upper

Family or financ ia l 4.213 100 .000 .446 .24 .66

pressures to keep a
traditional, steady job

Amount of time and 7.935 100 .000 .792 .59 .99

effort required

Lack of industry 8.574 100 .000 .822 .63 1.01

knowledge

Lack of available 6.365 100 .000 .614 .42 .81

mentors or advisors

Lack of prior 4.140 100 .000 .446 .23 .66

experience in
running a business

34
ANOVA
Hypothesis 1
H0: There is no significant difference in the various economic factors across the level of family income
H1: There is significant difference in the various economic factors across the level of family income
The family income has been divided into four groups;
(1) Upton 5 Lacs

(2) 5-10 Lacs

(3) 10-15 Lacs
(4) 15 above

Table 14: ANOVA Hypothesis1

ANOVA

Sum of df Mean F Sig.

Squares Square

Initial Between 1.890 3 .630 .546 .652 P > α; H0 is

Investment Groups accepted

Within 111.971 97 1.154

Groups

Total 113.861 100

Easiness of Between 2.426 3 .809 .845 .473 P > α; H0 is

Financing Groups accepted

Within 92.881 97 .958

Groups

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 Total 95.307 100

Break Even Between 5.774 3 1.925 1.934 .129 P > α; H0 is

Period Groups accepted

Within 96.523 97 .995

Groups

Total 102.297 100

ROI (return Between 2.249 3 .750 .866 .461 P > α; H0 is

on Groups accepted

investment)
Within 83.949 97 .865
Groups

Total 86.198 100

Interpretation
Here, µ1 represents population mean of economic factors for entrepreneurs with family income- Upton 5
Lacs; µ2 represents that of 5-10 Lacs; µ3 represents that of 10-15 Lacs; µ4 represents that of 15 Lacs
above.
At a significance level of 0.05, it is observed that there is no significant difference in the various economic
factors across the level of family income.

Hypothesis 2
H0: There is no significant difference in the various internal factors because of business background
H1: There is significant difference in the various internal factors because of business background The
business background has groups; (1) Yes (2) No
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 Table 15: ANOVA Hypothesis2
ANOVA

Sum of Df Mean F Sig.

Squares Square

Team Between .418 1 .418 .407 .525 P > α; H0 is

Motivation Groups accepted

Within 101.721 99 1.027

Groups

Total 102.139 100

Innovation of Between .287 1 .287 .276 .600 P > α; H0 is

idea Groups accepted

Within 103.039 99 1.041

Groups

Total 103.327 100

Risk bearing Between .070 1 .070 .087 .768 P > α; H0 is

Capacity Groups accepted

Within 79.138 99 .799

Groups

Total 79.208 100

Ownership Between 1.116 1 1.116 1.149 .286 P > α; H0 is

(Locus of Groups accepted

37
control) Within 96.210 99 .972
Groups

Total 97.327 100

Interpretation
Here, µ1 represents population mean of internal factors for entrepreneurs having business background; µ1
represents population mean of internal factors for entrepreneurs not having business background At a
significance level of 0.05, it is observed that there is no significant difference in the various internal factors
because of business background.

Conclusion

As revealed by this study it is obvious that there exists a plethora of factors which impact the issue of
‘wanting to be an entrepreneur’ which in turn does not permit gross generalization. However, factors like
economic, business and financial background besides educational background of parents, parents who
have grown rich during their lifetime, role and extent of government involvement besides availability of
capital have a pronounced impact in driving entrepreneurship.

References

1. Bygrave, W.D., & Hofer, C.W. (1991). Theorizing about entrepreneurship. Entrepreneurship, Theory
and Practice, 16(2), 13–21.
2. Collins, O., & Moore, D.G. (1970). The Organization Makers. Englewood Cliffs, N.J.:
AppletonCentury-Crofts.
3. Eckhardt, J.T., & Shane, S.A. (2003). Opportunities and entrepreneurship. Journal of Management.
29(3), 333-349.
4. Stevenson, H.H. (2006). A perspective on entrepreneurship. Harvard Business School Press
5. Kirzner, I.M. (1973). Competition and Entrepreneurship. University of Chicago Press.
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