CHAPTER 9 3.
Managerial skills:(not in a position to afford
SMALL BUSINESS & & ENTREPRENEURSHIP
(Village & small industries sector’ consists of both
traditional and modern small industries -eight
subgroups.: handlooms, handicrafts, coir,
sericulture, khadi and village industries (traditional),
small scale industries and power looms (modern) -
largest employment in India)
Classification of Small Industries
(MSMED (Micro, Small and Medium Enterprise
Development) Act-2006)
1.Manufacturing 2.Services
1.Manufacturing :( engaged in the manufacture or
production of goods)
(i) Micro enterprises: (investment in plant and
machinery does not exceed Rs. 25 lakhs)
(ii) Small enterprises: (investment in plant and
machinery is more than Rs. 25 lakhs but doesnot
exceed Rs. 5 crore)
(iii) Medium enterprises: (investment in plant and
machinery is more than Rs. 5 crore but does not
exceed Rs.10 crore)
2.Services:(enterprises engaged in services)
(i) Micro enterprises: (investment in equipments
does not exceed Rs.10 lakh)
(ii) Small enterprises: (investment in equipment is
more than Rs. 10 lakh but does not exceed Rs. 2
crore)
(iii) Medium enterprises: (investment in equipments
is more than Rs. 2 crore but does not exceed Rs. 5
crore)
Village industries
(Industry located in a rural area which produces any
goods, renders any service with or without the use of
power - fixed capital investment per worker does not
exceed Rs.50,000 or specified by central govt., from
time to time.)
Cottage industries
(known as Rural Industries or Traditional Industries -
Simple equipment is used - individuals with private
resources -Family labour and locally available talent
is used -Small capital investment -Produce simple
products)
Role of Small Business in India
(95% of the industrial units in India come under SSIs
- second largest employers - more labour intensive -
less capital intensive -produce variety of products -
balanced regional development - uses locally
available material- low cost of production -quick
decisions)
Problems of Small Business
1. Finance: non-availability of adequate finance to
carry out operations)
2. Raw materials: Availability & procurement of raw
material a major problem )
Downloaded from hssreporter.com
professional managers)
4. Labour:(employee turnover is generally
high due to low remuneration -lack of specialization)
5. Marketing:(weaker area of small organisations)
6. Quality:(do not follow the desired standards of
quality due to shortage of finance and resources)
7.Capacity utilization:(operating below full capacity)
8. Technology:(uses outdated technology)
Government Assistance to Small Industries & Units)
(National Bank for Agriculture and Rural
Development :NABARD -Rural Small Business
Development Centre :RSBDC -National Small
Industries Corporation :NSIC -Rural and Women
Entrepreneurship Development :RWED -Scheme of
Fund for Regeneration of Traditional Industries:
SFURTI) -District Industries Centres :DICs)
Entrepreneurship : (purposeful activity to organize
profit oriented business unit )
Characteristics of Entrepreneurship :(Systematic
activity -Lawful and purposeful activity -Brings
innovation and creativity to the business -Organizes
production -Risk taking )
Start-up India Scheme:(initiative by Govt. of India to
promote a strong ecosystem for nurturing new
enterprises in the country -Annual turnover does not
exceed Rs.25 crores in any preceding year -Paytm,
Flipcart, Snapdeal, Swiggy, Redbus, Uber Eats etc.)
Aims and Objectives of Startup Scheme
(entrepreneurial culture -awareness among the youth
-motivating educated youth -promote women,SC’s...)
Start-up India – Action Point
(Simplification of Formalities -Startup India Hub -
Legal support and fast tracking Patent Examination
Easy Exit --Incubator setup -Tax exemption )
Ways to fund startup
1. Boot Strapping (Self financing by the promoters
from their personal savings and resources)
2. Crowd Funding (Pooling resources by a group of
people for a common goal through internet platforms)
3. Angel Investment (investors with surplus cash who
invest in start-ups -offer mentoring or advice )
4. Venture Capital (Venture capitalists provide
professionally managed funds to companies)
5. Business Incubators and Accelerators – Incubators
provide funds for start-ups in the
early stage - accelerators help the start-ups to run or to
take a giant leap in business)
Intellectual Property Rights (IPR) :(Rights given to
persons over the creations of their minds - trade secrets,
copyrights,patents,trademarks,Design,Plant Variety..)
Importance of IPR:(encourages new inventions -
incentives to inventors -prevent loss of income -recognition)
Legislations and Agreements on IPR:(TRIPS -Trade
Mark Act 1999 -Designs Act 2000-Patents Act 2005..)
Prepared by ANFAS .V.S ,HSST Commerce , Thrissur