18.12.13

STEPS FOR STARTING A SMALL INDUSTRY

Introduction

The development of small scale industries has been one of the most significant and characteristic features of industrial development in India. One of the distinctive characteristics of small – scale sector is that the development of these industries would create broader employment opportunities assist in entrepreneurship and skills development and ensure a better use of scarce financial resources and appropriate technology.


Steps of the ladder the entrepreneur (small) has to climb. It is a continuous process of industrialization.

34. Ancillary development.
33. Grow bigger.
32. Compete with others.
31. Modernization.
30. Diversification.
29.Plough back profits.
28. Keep up to date.
27. Sell.
26. Produce.
25. Plan out record keeping.
24. Organise marketing.
23. Decide on pricing policy.
22. Trial run.
21. Recruit personnel.
20. Procure materials.
19. Install Machinery.
18. Plan buying.
17. Apply for materials ( if imported or controlled)
16. Place order for machinery ( preferably on hire purchase)
15. Plan sources of machinery.
14. Plan finance.
13. Obtain clearance from central state and local authorities and SI regn.
12. Make sure what lows will particularly affect you.
11. Arrange the work shed with facilities ( preferably on rent)
10. Decide on location and site.
9. Obtain the project report from SISI or elsewhere or prepare it yourself.
8. Decide whether to purchase a going concern or to start a new one.
7. Decide on form of ownership (sole proprietary / partnership / co – operative / company )
6. Choose a line.
5. Date with yourself for a decision.
4. Discuss with all around you with SISI and D.I office.
3. Consult publications and agencies.
2. Date with yourself for newer ideas.
1. Analyze yourself and your objectives.

STARTING A SMALL SCALE INDUSTRY

A small entrepreneur is the chief executive of his unit, its floor supervisor, accounts clerk, purchase manager, salesman, legal and economic adviser, planner and visionary – all rolled into one.

Any entrepreneur may be qualified engineer. Even so he should not dream of becoming a small entrepreneur unless he is confident of meeting the flowing twelve essential requirements:

1.     The entrepreneurs should be fully conversant with the product line. It is not enough that he knows the method of manufacture he has to know how to operate the machines etc.
2.     He should have adequate shop floor experience to guide the machine operators in fool – setting techniques or the die – maker on the specific needs of his press tools.
3.     He should be familiar with the raw materials he requires, their specifications how to ensure their quality and where to get them at reasonable prices.
4.     He should know how to keep accounts how to maintain stores, how to prepare the balance sheet. Etc.
5.     He should have knowledge of marketing channels, distribution network agency practices, transport intricacies and the economic of packaging.
6.     He should know how to ensure the stipulated quality of his product.
7.     He should be well versed in taxation and to her laws governing SSIs.
8.     He should be well versed in taxation and other laws governing SSIs.
9.     He should be willing to put up with bureaucratic regulations and insults, and be fractional under any circumstances.
10.  He should know how to avail himself of the various benefits available to the SSIs.
11.   He should possess expertise, shrewdness, resourcefulness and most important preservance in his business dealings. There is no substitute for hard work.
12.  He should have the guts to with stand the high pleasure climate in which he has to build his unit.
Objectives

Any entrepreneur desirous of starting a small – scale industry should have a clear picture of the objectives of his project. It is advisable a comprehensive check list.

Licenses

An impression seems to have gained ground among some people that there are some restrictions on the getting up of small scale industrial units and that licenses from either the central or state governments have to be taken out before an entrepreneur to set up an industrial unit in the small scale sector no formal permission from the state or Central government is necessary for this purpose. Also industries employing less than 100 workers and having fixed assets of less than Rs.10 lakh need not obtain any license under the Industries. ( Development and Regulation) Act.
Registration of Small scale industries

In their won interest all existing small – scale units or intending entrepreneurs employing more than 10 workers should get themselves registered with the Director of industries in their State. A copy of this application for registration should be sent to the Director of small industries service Institute in the concerned state.

Machinery

The small entrepreneur needs the requisite type of machines for production. He can get the necessary machinery from the National Small Industries Corporation under a hire – purchase scheme.

Raw materials

The raw materials required by SSIs may broadly be classified as under:

1.     Raw materials components and spares both indigenous and imported.
2.     Non – ferrous materials – both indigenous and imported.
3.     Iron and steel – both indigenous and imported and
4.     Chemicals – indigenous and imported

Finance

The finance function in a small – scale industry is similar to the financial function in any other organization, but with this essential difference – that there are a host of banking and insurance regulations to be strictly adhered to and quite to fe precautions to be taken.

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