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

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