Small Scale Industry.docx

SMALL SCALE INDUSTRY

Small business forms an important sector of the Indian economy. Small scale industries accounted for 40 percent of the value added by the whole manufacturing sector and 80 percent of the employment. Small industries have contributed to the extent of 42 percent with regard to export. The concept of small scale industry varies from one country to another and from one time to another in the same country depending upon the pattern and stages of development , government policy and administrative set up of the particular country.

STEPS IN SETTING UP OF SMALL SCALE INDUSTRY A Small entrepreneur has to follow certain procedure to set up his unit . A large number of environment factors such as economic ,political ,legal ,social factors etc. have great impact on setting up of small scale industrial unit .And other steps to be fallow as given below : Idea of Self – Employment:- unemployment is biggest problem of India, this problem is increasing to a great extent day by day . One of the solution of this alarming

problem is to motivate the educated unemployment youth to opt self-employment programmers and take a decision to own a small scale industry. He will became an owner , manager , and controller by setting up a new industrial unit. Hence , be can become a job – creator than job seeker some factors:1. Possession of knowledge , skill, experience and entrepreneurial aptitude. 2. Easy availability of inputs. 3. Incentives / subsidies provided by government. 4. Assistance from banks and financial institutions. 5. Financial resources etc.  Analysis of Entrepreneurial Environment:- the potential entrepreneur should properly analyses the entrepreneurial environment after taking the decision to be self-employed . Entrepreneurial environment is greatly influenced by administrative factor and legal factors . The potential entrepreneur should study the opportunities and various programmers initiated by small scale industries ,NSIC, SIDBI, NIESBUD etc. along with incentives and concessions provided by governmental agencies.  Project Identification :- it is very crucial decision to be taken by potential entrepreneur . Selection of right type of project makes a great contribution in the success of

enterprise . project identification refers to identify and analysis of profitable opportunities for investment.  Selection of the Product :- selection of product should be based on market condition . The knowledge , skill , experience and creativity of an entrepreneur plays dominant role in selecting the right choice of product . The existing and potential market demand of product also contributes in the choosing the product.  Selection of Organization:- the selecting of organization structure depends upon the available resources i.e. men, money, material, method . The entrepreneurship has options to choose organizational structure inform of sole proprietorship , partnership firm , co-operative society or a joint stock company .Every types of organization has its own advantages and limitations.  Preparation of Project Report:- it is an report comprising all important information relating to proposed project . The project report should cover the aspects relating to introduction of proposed project, view of entrepreneurs to set up the unit , types of unit , nature of unit, information relating to promoters , information’s relating to product , manufacturing process , plant total capacity , plants utilized capacity , types of raw material to be used , total land required , total cost of project , methods of financing etc.

 Location of Enterprise:- the site of unit is very crucial step in the start-up process of an enterprise . The working and future expansion of the unit depends upon the right type of location of an unit . A large number of factors such as easy availability of raw –material , power , nearness the market , availability of transportation , warehousing and communication facilities , supply of skilled labor , government incentives , existence of supplementary and complementary industries ,land prices climate etc. play dominant role in the choice of location of unit.  Arrangement of Finance :- finance is the blood of every type of entrepreneurial activity. No entrepreneurial activity cannot be conducted without adequate finance . a potential entrepreneur has to thoroughly analyses the financial requirements i.e. fixed capital requirement and working capital requirement .an entrepreneur can invest his own fund in starting new venture.  Provisional Registration :- provisional registration enables the entrepreneur to convert his ideas into realty .the entrepreneur has to submit application for Provisional Registration to the District Industries Centre. DIC issues .and many other provisions are followed .  Acquiring Machinery and Technology:- this manufacturing know-how is provided by various government agencies , research laboratories and other agencies . The small

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entrepreneurs can also acquire technical know-how from foreign countries subject to the terms and conditions laid down by government of India. Apply for Power and Water Connection Recruitment and Training of Workers Installation of Plant and Machinery:- the entrepreneur should design a suitable and best suited layout for the placement of new machinery in the unit . Marketing :- marketing is the process of creating new customer for goods produced in industrial unit by entrepreneur. Marketing plays a dominant role in communicating the information relating to product creating awareness of product , encourage the customer to purchase product and finally to boost the sale . Permanent Registration:- the entrepreneur can apply for permanent registration to District Industry Centers an issue a certificate of permanent registration on proper inspection of industrial units. Profits Generation :- Profit earning is the basic objective of every type of entrepreneuring activity . Profits is essential for the future growth and survival of an unit . Profit helps the entrepreneur to replay the loans of various banks and financial institution .

Fundamentals of Entrepreneurship

Mgt 301 Steps in Setting up of Small Scale Industry

Submitted To

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Dr. Babita

Submitted By

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Herman Khinda

Adm. No.

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L-2016 –H.SC-08-BFD