Question

Explain the process of establishment of Small Scale industries.

Answer 1

In today's world, youth are more attracted to business opportunities rather than employment.

To start a small scale industry following stages to be followed.

1. The idea to Setup a Business: This is a first step to start a small scale industry. The prospective entrepreneur with his own capacity decides the sized and type of business like a sole proprietorship, partnership or corporation.
2. Analysis of Business Surrounding: It is necessary to understand different business surrounding and policies before starting any business. They are competitors, legal, economical, industrial, technological, etc.
3. Choice of Product: Entrepreneurs has to decide his sector of production i.e. Manufacturing or Service sector. After doing a market survey and understanding the advantages and disadvantages one should decide the line of product or services.
4. Location for Business: Entrepreneur has to select a location to start a business. It plays a very important role in the success of the business while selecting location many factors are to be taken into consideration like availability of labour, raw materials, power supply, transportation, etc.
5. Technology Selection: An entrepreneur has to select available and suitable technology for his business. He should select technology he is familiar to use.
6. Project Appraisal: It means the study and assessment of a project. One should study the project very carefully from the point of view regards to the economy, finance, marketing and profitability.
7. Capital Requirement: The entrepreneur has to plan for the capital requirement and sources available for Capital. It can be self-finance, a loan from relatives or banks.
8. Incorporation/Registration: It is compulsory for every small scale industry to register with the respective Government Authorities. A printed application form is available with District Industries Centre (DIC). The entrepreneur has to duly fill the information with his signature in the form and submit to DIC.
9. Implementation of Resources: After registration of business entrepreneur has to start with the production process.
   (a) Financial Resources: The entrepreneur has to collect finance and make necessary arrangement for capital.
   (b) Factor Set up: The entrepreneurs have to allocate space for various operations, purchase of machinery and tools and installation of it.
   (c) Electric power and water supply: The entrepreneur has to calculate the total electric power requirement in KW (Kilowatt) and get a connection from the authority and supply for water connection.
   (d) Appointment of staff: Small scale industries are labour, intensive. One has to appoint unskilled and semi-skilled staff as per the requirement to start production.
10. Manufacturing and Selling of Product: After assembling all financial and physical resources goods are manufactured and send to market for sale. Advertising and publicity play a very important role in marketing and selling of product.
11. Customer’s Feedback: Customer satisfaction is very important in business. Regular feedback from customers is helping to make qualitative changes in the product.