Entrepreneurship Management

Small Scale Industries

Definition
Characteristics
Importance
Advantages of running an SSI
 Entrepreneurship Management

A few definitions..
• Small scale undertakings - Engaged in manufacturing, processing
or preservation of goods; investment in plant and machinery up to
Rs. 1 crore

• Tiny enterprises - Investment in plant and machinery up to Rs. 25

Lakh

• Small scale service/business enterprise - Investment in fixed

assets up to Rs.25 Lakh (excluding plant and machinery)

• Women enterprises- Small scale units with financial holding of

minimum 51% by one or more women entrepreneurs

• Artisans, village and cottage industries – Artisans and small

industrial activities in villages/towns with population of max.
50,000; utilising locally available natural resources; individual
credit requirement up to Rs.50,000/-
 Entrepreneurship Management

Characteristics of a SSI

• Small capital investment

• Generates employment, generally around 10 employees
• Located in rural and semi urban areas
• Generally a sole proprietorship business
• Funding from the entrepreneur’s personal funds
• Exploitation of human resources (Women and child labour)
• Organising and management skills are often neglected
• Financial discipline is weak
• Encourages entrepreneurial growth
• Balanced regional development is ensured
 Entrepreneurship Management

Importance of SSI

• Labour intensive
• Ensure an equal distribution of income and wealth
• Act as a link to large scale
• Act as a training ground for entrepreneurs
• Mobilize resources and services
• Give rise to capital formation
• Has a huge export potential
• Are extremely innovative and productive
 Entrepreneurship Management

Advantages of running a SSI

• Most do not need high level of technology and are labour intensive
and hence do not need huge start up or working capital

• SSI projects can be undertaken in a short time frame

• Use of abundant local natural resources is possible

• Small scale enterprises can be linked to large businesses which

help in their growth and progress

• Able to generate local and permanent employment

• Have a short gestation period