Analyzing the Impact of Non-Revenue Generating Investments on Entrepreneurial Growth in Tamil Nadu

S. Sivaprakkash, Assistant Professor; D. Kesavan, Assistant Professor; C. Therasa, Assistant Professor; M. Gowtham, Research Assistant

doi:10.21844/smsjei.v11i01.30003

S. Sivaprakkash, Assistant Professor Department of Commerce, Central University of Tamil Nadu, India
D. Kesavan, Assistant Professor Faculty of Management, SRM Institute of Science and Technology, Kattankulathur Campus, India
C. Therasa, Assistant Professor School of Management, SASTRA Deemed University, Thanjavur, India
M. Gowtham, Research Assistant ICSSR Project

DOI: https://doi.org/10.21844/smsjei.v11i01.30003

Keywords: Compliance fees, Digital presence, Entrepreneurs, Financial Strain, Non-revenue generating investments, Subsidies, Taxation

Abstract

Entrepreneurs, particularly small and medium-sized enterprises, often face significant financial challenges
due to various non-revenue generating investments (dormant investments). These dormant expenses,
ranging from compliance fees and building charges to digital presence, create a substantial financial strain
on the operations of the entrepreneurs. This study is descriptive in nature, analysing the various non-revenue
generating investments that entrepreneurs face in their day-to-day operations, which leads to a financial
burden. A structured questionnaire was developed to identify various non-revenue generating investments
and the financial strains they caused, and responses from 1079 entrepreneurs across micro, small and
medium enterprises in different districts of Tamil Nadu were collected. The responses received from the
entrepreneurs depicted that non-revenue generating investments weigh heavily on business operations. The
study aims to provide strategic policy modifications to help entrepreneurs tackle these non-revenue
generating investments and focus on their growth. Entrepreneurs are inclined to adopt strategies that lower
needless expenses and streamline their business processes, allowing them to allocate resources towards
innovation and growth.