Chapter-9

Challenges for Small Enterprises

A u t h o r : A l p a n a Tr e h a n

ro"lems #ace( ") Small Enterprises

!anagerial ro"lems #inancial ro"lems !ar$eting ro"lems %uman &esource ro"lems &a' !aterial-&elate( ro"lems Technological ro"lems

!anagerial

ro"lems #ace( ") Small Enterprises

!ost of the SSEs are not m anage( effecti*el) an( efficientl) SSEs generall) lac$ m anagerial capacities to successfull) im plem ent ne' opportunities SSEs also ha*e an insufficient num "er of traine( an( e+perience( em plo)ees as the) cannot pa) high salaries The (ifferent ,o*ernm ent initiati*es to o*ercome managerial pro"lem s are:
!anagement Training rograms

-ational .nstitute for !icro, Small an( !e(ium Enterprises -ational .nstitute for Entrepreneurship an( Small /usiness De*elopment, -oi(a .n(ian .nstitute of Entrepreneurship 0..E1, ,u'ahati

#inancial

ro"lems #ace( ") Small Enterprises

SSEs are una"le to "orro' at reasona"le interest rates (ue to their lo' goo('ill #or re3ection of consignment an( (ela) in pa)ment small enterprises nee( to close their operations The ,o*ernment initiati*es to o*ercome financial pro"lems are:
riorit) Sector 4en(ing olic)

Cre(it ,uarantee Co*er #un( Scheme olic) ac$age for Stepping up Cre(it to Small an( !e(ium Enterprises 0S!Es1

Small .n(ustries De*elopment /an$ of .n(ia 0S.D/.1 State #inancial Corporations 0S#Cs1 an( State .n(ustrial De*elopment Corporations 0S.DCs1

!ar$eting

ro"lems #ace( ") Small Enterprises

Depen(enc) on outsi(e sources ten(s to raise the cost of their pro(ucts an( ser*ices SSEs, "eing una'are of mar$eting concepts an( strategies, hesitate opting for efficient mar$eting techni6ues Small scale entrepreneurs (o not accuratel) un(erstan( 'hat $in( of pro(ucts are in actual (eman( in the mar$et The ,o*ernment initiati*es to o*ercome mar$eting pro"lems are:
Consortia an( Ten(er !ar$eting Approach Single oint &egistration for ,o*ernment urchase Scheme

E+hi"itions an( Technolog) #airs #acilitation in E+port of ro(ucts an( ro3ects

%uman resource ro"lems #ace( ") Small Enterprises

SSEs generall) face (iffic ult) in ac6uiring an( retaining emplo)ees 'ith proper $no'le(ge an( s$ills Small enterprises cannot offer e6ual compensation to emplo)ees T he ,o*ernment initiati*es to o*ercome human resource pro"lems are:
8arious training programs, seminars, an( 'or$shops to "ri(ge the s$ill gaps of emplo)ees in SSEs con(ucte( ") -S.C

Some of the institutes focusing on human resource (e*elopment of SSEs :

.n(ian .nstitute of Entrepreneurship0..E1, ,u'ahati #ragrance an( #la*our De*elopment Centre, 9annau3 -ational .nstitute for !icro, Small an( !e(ium Enterprises0-.!S!E1, %)(era"a(

&a' !aterial-&elate( ro"lems #ace( ") Small Enterprises

-on-a*aila"ilit) of ra' materials on a timel) "asis or insufficient 6uantit) of ra' materials Scarcit) of "asic ra' materials nee(e( for (ail) pro(uction The ,o*ernment initiati*es to o*ercome ra' material-relate( pro"lems are:
-S.C an( Small Scale .n(ustries De*elopment Corporations &a' !aterial Assistance Scheme

Technological

ro"lems #ace( ") Small Enterprises

<na"le to use the latest techni6ues of pro(uction (ue to lac$ of capital The pro(ucti*it) an( 6ualit) of pro(ucts of SSEs ten(s to "e lo' The ,o*ernment initiati*es to o*ercome technological pro"lems are:
.S= 9000>15001 Certification #ee &eim"ursement Scheme -ational !anufacturing Competiti*eness rogram 0-!C 1

Cre(it 4in$e( Capital Su"si() Scheme 0C4CSS1

&ole of Central an( State ,o*ernments in romoting Small Enterprises

Entrepreneurship De*elopment rograms 0ED s1

&a3i* ,an(hi <()ami !itra @o3ana 0&,<!@1 Scheme of Sur*e), Stu(ies, an( olic) &esearch

!icro, Small, an( !e(ium Enterprise De*elopment 0!S!ED1 Act, 200: &eser*ation olic) of ,o*ernment

.n(ustrial
. & 195? . & 197: . & 19;; . & 19?0 . & 1990

olicies for Small Enterprises

-e ' S ma ll E n te r p ris e Co mp re h e n s i*e 2000 .n ( u s tria l .n ( u s tria l o lic ) o lic ) o lic ) o lic )

o lic ) 0-S E 1, 1 9 9 1 a c$ a g e fo r S ma ll S c a le .n ( u s trie s a n ( Tin ) S e c to r

a c $ a g e fo r S S E s 2 0 0 1 -0 2

o lic ) fo r S S E s 2 0 0 2 -0 5

a c $a g e fo r S S .s 2 0 0 5 -0 7 a c $a g e fo r S !E s 2 0 0 7 -0 :

&ECA
Small Scale Enterprises 0SSEs1 come across (ifficulties in e*er) stage of their operationsA .n case of SSEs, the) are often una"le to o"tain a(e6uate financial resources for purchasing e6uipment an( machiner), procuring ra' materials, an( meeting (a)-to-(a) e+pensesA &ecogniBing the importance of SSEs in the economic gro'th of the countr), the .n(ian go*ernment has formulate( se*eral policies an( schemes for the (e*elopment an( promotion of SSEsA