PPT on Micro Small and Medium Business Enterprises

MSMBE
TY-A,B & D
SMEs in India
• In India, 'small and medium enterprises' (SME) is a generic term used to describe small scale industrial
(SSI) units and medium-scale industrial units. Any industrial unit with a total investment in its fixed assets
or leased assets or hire-purchase asset up to Rs10 million is considered as a SSI unit and investment up
to Rs. 100 million is considered as a medium unit. In addition, an SSI unit should neither be a subsidiary
of any other industrial unit nor can it be owned or controlled by any other industrial unit.
• The SME sector produces a wide range of industrial products such as food products, beverage, tobacco
and tobacco products, cotton textiles, wool, silk, synthetic products, jute, hemp & jute products, wood &
wood products, furniture and fixtures, paper & paper products, printing publishing and allied industries,
machinery, machines, apparatus, appliances and electrical machinery. SME sector also has a large
number of service industries.#
• The small scale sector in India comprises of a diverse range of units from traditional crafts to high-tech
industries. The number of SSI working units (registered & unregistered) in India totaled 11.4 million in
2003-04-80.5 per cent of which are proprietary concerns and 16.8 per cent are partnership firms and
private limited companies.
•
Classification of MSMEs
• Classification of MSMEs
• MSME’s are classified as per their turnover and investment. The new
classifications as per the Aatma Nirbhar Bharat Abhiyan Scheme in
2020 is given in the table below:
• Micro, Small, Medium Enterprises (MSMEs) are entities that are

involved in the production, manufacturing and processing of goods
and commodities.
• The concept of MSME was first introduced by the government of India
through the Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006.
Size of the Enterprise Investment and Annual

Turnover
Micro Investment less than Rs. 1 crore

Turnover less than Rs. 5 crore
Small Investment less than Rs. 10

crore
Turnover up to Rs. 50 crore
Medium Investment less than Rs. 20

crore
Turnover up to Rs. 100 crore
Services Provided by the Ministry of MSME
• Ministry of Micro, Small and Medium Enterprises
• The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex
executive body for the formulation and administration of rules, regulations and laws relating to micro, small
and medium enterprises in India. The Minister of Micro, Small and Medium Enterprises is NARYAN RANE and
the Minister of State is Pratap Chandra Sarangi since 31 May 2019.
• Under the Micro, Small and Medium Enterprises Development Act, 2006, the Government of India established
The National Board for Micro, Small and Medium Enterprises (NBMSME) to examine the factors affecting
promotion and development of MSME. This board also reviews the existing policies and suggests
recommendations to the Government for the growth of the MSME sector
• The services provided by the Ministry of MSME are as follows:
• Facilities for testing, training for entrepreneurship development
• Preparation of project and product profiles
• Technical and managerial consultancy
• Assistance for exports
• Pollution and energy audits.
Importance of MSMEs For Economic
Development:-
• The MSME, or the micro, small and medium enterprises are considered
the backbone of the Indian economy. The contribution of MSMEs in
accelerating the economic growth of the nation has increased manifold in
the last 5 years. In 2019-2020, the contribution of Indian MSMEs in the
India’s GDP stood at a whopping 30 per cent. The MSME ministry expects
this share to grow further.
• For developing nations like India, MSMEs play a vital role in eliminating the
rural – urban disparity, providing employment opportunities, and
supporting equitable growth. As per the data available on the MSME
registration portal Udyam. India has registered 1.24 crore MSMEs till
December 2022, which jointly employ 9.12 crore people. Over 23 per cent
of these are women employees.
Development
• What kind of businesses fall under MSME?
• The government of India states that ‘all business activities – services and manufacturing are
covered in MSME sector’ as long as they meet the investment and turnover criterion mentioned
above. However, there are certain exceptions to this as well, which we have listed out for you
later in the article.
• Manufacturing business activities – Manufacturing business activities (producing finished goods
from raw products) in the MSME segment contribute to 45 per cent of the total manufacturing
output and 40 per cent of total exports. Combined with the collective attempt to popularize the
‘Made in India’ campaign within the country and globally, this share will only go upwards.
• Service sector business activities – An analysis of the Udyam MSME registration portal shows
that MSMEs in service sector comprise a larger proportion of as compared to those MSMEs in
manufacturing sector. Indian entrepreneurs have registered over 5.37 lakh enterprises under the
manufacturing category and 8.65 lakh enterprises under the service sector.
Development
• Here is a broad list of services and businesses shared on multiple
financial portals that qualify as MSMEs:
Placement services Dealers of small white goods
Training institutions Ayurvedic products

Beauty parlour services Khadi materials and products
Development
Crèches services Handicrafts – spinning and weaving
Garages for auto repair Coir Industry
X-Ray clinics Manufacture furniture and wood products
Tailoring units Poultry Farming
Equipment rental Bicycle parts sales and service
Photo labs Stationery Items
Repairs of agricultural machinery Call centres
Computer-based data processing businesses Rubber products
STD/ISD booths Service provider for IT-enabled service
Retail trading Testing Labs for industries
Laundry services Sales of auto parts components
Toughened Metallic Ware Sales of ceramics and glass products
Automotive Electronic Component products Retail and wholesale business

Development
• Businesses that do not fall under MSME
• The MSME Ministry has stated via a notification that the following activities are not
covered under MSMED Act, 2006:
• Gambling and betting activities
• Forestry and logging
• Fishing and aquaculture
• Trade/repair of motorcycles (wholesale and retail)
• Retail trade except of vehicles and motor cycles
• Activities of households for domestic personnel
• Goods and services produced via private households for personal use
• Activities of extraterritorial organization and bodies
Development
• Most popular industries amongst MSME businesses in India
• At present the share of service sector is 61% higher than manufacturing
sector when it comes to MSME registration.
• The top 5 industrial sectors that are most popular amongst the MSMEs
are:-
• Food products
• Textile
• Apparel
• Fabricated metal products
• Machinery & equipment
Development
• Some of the products the government has exclusively marked for manufacturing by the MSME industry are:
•
• Food and Allied Industries
• Pickles
• Bread
• Groundnut Oil (except solvent extracted)
• Chutneys
• Mustard Oil (except solvent extracted)
• Chemical and Chemical Products

• Laundry Soap
• Wax Candles
• Fire Works
• Safety Matches
• Agarbattis
Development
• Glass and Ceramics
• Glass Bangles
• Mechanical Products, excluding Transport Equipment

• Steel almirah
• Rolling shutters
• Steel chairs-All types
• Steel tables-All other types
• Steel furniture-All other types
• Padlocks
• Stainless steel utensils
• Domestic utensils-Aluminium
Understanding The Small Businesses
• Small businesses are either services or retail operations like grocery
stores, medical stores, tradespeople, bakeries and small
manufacturing units. Small businesses are independently
owned organizations that require less capital and less workforce and
less or no machinery. These businesses are ideally suited to operate
on a small scale to serve a local community and to provide profits to
the company owners.
Development
Understanding The Small Businesses
• Types of Small Business
• Small-scale manufacturing industries.
• Handlooms and power loom.
• Khadi
• Agro-based industries.
• Tuition Centres.
• Photography.
• Breakfast joint
• Printing.
• Coir
• Sericulture
Understanding Small Businesses: Definition
and Characteristics of Small Businesses
• A business which functions on a small scale level involves less capital
investment, less number of labour and fewer machines to operate is
known as a small business.
• Small scale Industries or small business are the type of industries that
produces goods and services on a small scale. These industries play an
important role in the economic development of a country. The owner
invests once on machinery, industries, and plants, or take is a lease or
hire purchase. These industries do not invest more than one crore.
Few examples of small-scale industries are paper, toothpick, pen,
bakeries, candles, local chocolate, etc., industries and are mostly
settled in an urban area as a separate unit.
Characteristics of Small Scale Industries
• Ownership: They have a single owner. So it is also known as a sole

proprietorship.
• Management: All the management works are controlled by the owner.
• Limited Reach: They have restricted area of operation. So they may be a local
shop or an industry located in one area.
• Labor Intensive: Their dependency on technology is very little because they
are dependent on labors and manpower.
• Flexibility: Because they are small, they are open and flexible to sudden
changes, unlike large industries.
• Resources: They utilize local and immediately available resources. They do
better utilization of natural resources and limited wastage.
Categories of Small Business
• On the basis of capital invested, small business units can be divided into the following
categories:
• (1) Small Scale Industry (Before 2006)
• They invest in fixed assets of machinery and plant, which does not surpass than one
crore.
• For export improvement and modernization, expenditure ceiling in machinery and
plant is five crores.
• (2) Ancillary Small Industrial Unit
• This industry can hold the status of an ancillary small industry if it supplies a minimum
50 per cent of its product to another business, i.e. the parent unit.
• They can produce machine parts, components, tools or standard products for the
parent unit.
• (3) Export Oriented Units
• This industry can possess the status of an export-oriented unit if it
exports exceeds 50 per cent of its manufactures.
• It can opt for the compensations like export bonuses and other grants
awarded by the government for exporting units.
• (4) Small Scale Industries Owned by Women
• An enterprise operated by women entrepreneurs in which they alone or
combined share capital minimum of 51 per cent.
• Such units can opt for the special grants from the government, with
low-interest rates on loans, etc.
• (5) Tiny Industrial Units
• It is an Industrial or a company whose expenditure on machinery and
plant does not exceed Rs. 25 lakhs.
• (6) Small Scale Service and Business
• It is a fixed asset investment on machinery and plant excluding land
and building should not surplus Rs. 10 lakhs
• 7) Micro Business Enterprises
• It is a tiny and small business sector.
• The investment in machinery and plant should not exceed Rs.1 lakh.
• (8) Village Industries
• The industries which are located in rural areas and manufacture any product
performs any service with or without the utilization of power is called village
industries.
• They have fixed investments on capital as per head, workers, and
artisan, which does not exceed Rs.50, 000.
Indian Cottage Industry
• Indian Cottage Industry Types

• Cottage industries are manufacturing companies that perform the
majority of their labour by hand. India is renowned and well-known
for its diverse culture, traditional cottage industries’ handicrafts, and a
large variety of food products, among other things. The main cottage
industries in India are cotton weaving, carpet weaving, silk weaving,
the leather industry, metal handicrafts, and small-scale food
processing.
• (9) Cottage Industries
• It is also known traditional or rural industries.
• These industries are not covered by the capital investment criterion.
• Cottage industries are characterized by the following features :
• These are organized by a single, with private resources.
• Use family labor and local talent.
• Simple instruments are used.
• Small capital investment is involved.
• Simple products are made.
• Indigenous technology is utilized.
• 1-Cotton Weaving: Cotton weaving is a significant cottage industry in India. Since cotton
clothing is widely worn throughout the nation, the knowledge is age-old. Clothing made of
cotton is renowned for its traditional style, vibrant color, and designs made by expert weavers
using handlooms. Gujarat, Tamil Nadu, and Maharashtra are the three states that produce the
most cotton.
• 2-Sikh weaving: Another well-known cottage industry in India is silk weaving. Our nation
produces and exports a significant amount of silk, both domestically and outside. Karnataka
produces the most silk, making up over 70% of the whole silk weaving business. Mulberry,
Tassore, Muga, and Eri silks are produced in our count.
• 3-Carpet Weaving: During the Mughal era, carpet weaving was first introduced to India. The
durries and coir carpets are equally renowned for their exceptional quality and texture as the
Kashmiri carpet. In spite of the fact that the carpet industry is widespread throughout the
nation, it is largely concentrated in Kashmir, Rajasthan, Punjab, Uttar Pradesh, Andhra Pradesh,
and Punjab. The Carpet Export Council was also founded by the Indian government to promote
knotted rugs and other types of floor coverings from all around the nation.
• 4-Leather production: India is a significant producer of premium
leather for export to international markets, providing around 10% of
the demand. One of India’s top export earners and one with almost
2.5 million workers is the leather industry. The Indian states that
produce leather are Uttar Pradesh, West Bengal, and Tamil Nadu.
• 5-Metal Works: Metal has long been used in India to make figurines,
jewellery, utensils, and other objects. India’s metal handicrafts are
well-liked worldwide and have a major economic impact on the
nation. Metal handicrafts are created using hand-operated tools
rather than sophisticated machinery.
• Handloom Weaving: The production of textiles, sarees, and fabrics using

traditional handloom techniques.
• Art and Craft: Handcrafted items such as pottery, woodcraft, and
handmade jewellery.
• Agro-Based Industries: Processing agricultural products at a small scale,
like making jaggery or processing spices.
• Khadi Production: Manufacturing khadi, a hand-spun and handwoven
fabric, often associated with the Indian independence movement.
• Handicrafts: Crafting of traditional artifacts, paintings, and sculptures.
Role of Small-Scale and Cottage Industries In India
• Employment Generation: Cottage industries contribute significantly to rural

employment, absorbing a substantial portion of the workforce.
• Preservation of Traditional Skills: These industries help in preserving and
promoting traditional craftsmanship and skills passed down through
generations.
• Economic Decentralization: Cottage industries promote economic activities
in rural areas, preventing migration to urban centres.
• Diversification of Economy: They add diversity to the economy by producing
a wide range of handmade and unique products.
• Entrepreneurship Development: Cottage industries often act as a breeding
ground for entrepreneurs, encouraging small-scale business initiatives.
• Issues Faced by the Cottage Industries in India
• The lack of access to adequate finance options and limited technical knowledge has made it
difficult for cottage industries to fulfil domestic and international customer demands, thereby
inhibiting their growth. These are some of the major issues faced by cottage industries in India
– let’s learn more about each one of them individually in the following sections.
• #1 Self-Employed Labour Shortage
• The self-employed labour shortage is a major problem faced by Indian cottage industries. The
lack of skilled labourers has been made worse by the Great Recession and economic slowdown,
which led to a large number of factory workers losing their jobs.
• Most cottage industries are made up of small-scale producers who find it difficult to attract
employees due to low wages, insecure working conditions, and long hours. These challenges
have worsened with the rise in unemployment rates across the country.
• Cottage industries also have difficulties finding skilled employees because many young people
choose not to pursue traditional occupations and apprenticeships.
Indian Cottage Industry-Issues Faced by the Cottage Industries in India
• #2 Low Demand for Handmade Goods

• The majority of the demand for handmade products comes from tourists visiting the country.
But unfortunately, not enough people live in these villages to keep up with production. It
means that most of these goods are not made locally and can’t be sold nearby.
• The result is a vicious cycle where supply and demand cannot meet due to a lack of market
access.
• There’s a general misconception that cottage industry goods should be easy to transport
because they’re small. However, this isn’t always the case! For example, if you want to ship
something fragile like silverware to long distances without damaging it, you will need high-
quality packing materials.
• One of the unfortunate realities when it comes to cottage industries is low-quality products.
These businesses often have little knowledge of producing high-quality goods, leaving many
unsatisfied buyers.
Issues Faced by the Cottage Industries in
India
• #3 Lack of Financing Options
• Traditional banks offer loans with higher interest rates than microfinance institutions. The
perception of high-interest rates may be that they are due to the poor credit history and
low income of the rural borrowers.
• However, there are other reasons for the high cost of these loans. For example, traditional
banks charge a commission for processing the loan.
• The process is lengthy and demanding for bank staff and customers, so it costs more to
service each loan transaction. Moreover, using outdated manual systems to process data
limits efficiency, increasing costs.
• In contrast, many microfinance institutions offer their customers products with lower rates
and no commissions on transactions because they do not have expensive brick-and-mortar
branches or costly IT infrastructure; instead, they mainly operate online or through mobile
phone banking apps
India
• #4 Government Regulations
• Each state has its regulations that govern the industries, so it is
important to consult your local government officials and determine
the regulations before starting a business.
• For example, each state restricts how many days a week a business
can be open or if employees must wear certain clothing.
• There may also be a restriction on when employees can take breaks
during the day. As another example, there may be different child
labour laws for children under 14 years old compared to children over
the age of 14 years.
India
• #5 Poor Working Conditions
• In the past, people worked in these spaces for up to 18 hours a day.
They’d work with chemicals and dangerous tools, often without
protective gear or knowledge of how to use them safely. And they
were paid only a fraction of what they were worth.
• In recent years, we’ve seen some progress. The Indian government
has passed legislation that mandates fair wages and working hours for
this industry.
• But there are still many challenges – like limited access to markets for
their products or lack of business skills – that limit their success.
India
• #6 Ineffective Marketing Strategies
• Cottage industries in India need to take marketing into their own
hands because there are not enough jobs available. Of course,
marketing is an important part of any business, but it’s essential for
businesses that rely on word-of-mouth and referral.
• As a result, these businesses will have to be more creative in
advertising themselves. For example, they could try sending emails
with their products and services attached, sponsoring events,
participating in community groups, or partnering with local hotels or
restaurants.
India
• #7 No Brand Identity
• It is not uncommon for small businesses to have issues with branding
and marketing. They may not have the funds or expertise to develop a
strong brand identity design, which leads to a lack of awareness and
visibility.
• For example, if you are a fashion designer who produces clothing but
doesn’t have the funds or skills to create your website, people may
not know that you exist because they couldn’t find your products on
search engines.
India
• #8 Quality Control Issues
• One major problem faced by cottage industries is quality control. The
vast majority of cottage industries are family owned and operated.
When the owner is also the manufacturer, they are not able to
monitor the quality of their products as well as a corporation might
be able to. They will often produce goods until they run out of
materials instead of monitoring the quality and stopping when a
sufficient amount has been made.
India
• #9 Lack of Government Support
• The Indian government has not been supportive of the cottage
industries. The government’s policies do not support the growth and
development of cottage industries.
• For example, cottage industries are only given a 15% discount on the
minimum rate they need to pay on electricity charges when they
purchase their power from a State Electricity Board (SEB) instead of a
50% discount if they purchase their power from private companies.
• It makes it difficult for these small businesses to survive, as they will
have to spend more money each month to use electricity.
India
• #10 Sustainability Issues
• One major issue that many cottage industries have is sustainability.
There are not as many jobs as there used to be, and the demand for
handmade goods is decreasing. It means that the cottage industries
have less income, which makes it hard to maintain their business
operations.
Government Actions to Resolve the Problems of MSME:-
• Micro, Small and Medium Enterprises (MSMEs) form a crucial part of

the Indian economy. The MSME sector in India has exhibited a strong
performance and has protected the economy from global adversities
and shocks. The sector is complementary to large companies and
industries, providing them with necessary parts and components.
Furthermore, the sector helps uplift the country's rural and less
developed areas, reducing regional imbalances and inequality. All
these factors make the MSME sector crucial in the country's socio-
economic development.
Government Actions & Schemes to Resolve the Problem
• The government has launched a number of efforts to address the problems facing the
cottage and small scale industries because of their significance. The first actions taken
are as follows:
• A number of organizations have been established by the Union Government to support
small companies and rural communities. They include the Central Silk Board, the All
India Handicrafts Board, the AH India-Handloom Board, and the Khadi and Village
Industries Commission.
• There are now industrial cooperatives, industrial estates, and rural industrial initiatives.
• To encourage the small-scale manufacturing sector, the Central Government has
designated 807 products for exclusive manufacture.
• District Industries Centers are being created at the district level to house all the support
and services needed for small and village businesses.
Government Actions & Schemes to Resolve
the Problem
• Government Initiatives: The Indian government has launched several
initiatives to promote MSME financing. Some of these initiatives include:
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):
The CGTMSE scheme provides collateral-free credit to MSMEs. The
scheme guarantees up to 85% of the loan amount, which reduces the risk
for lenders and makes it easier for MSMEs to secure financing.
• Pradhan Mantri Mudra Yojana (PMMY): The PMMY scheme provides
loans up to Rs. 10 lakhs to MSMEs. The scheme has three categories of
loans: Shishu (up to Rs. 50,000), Kishore (up to Rs. 5 lakhs), and Tarun (up
to Rs. 10 lakhs). The loans do not require collateral and are available to
both new and existing MSMEs.
the Problem
• Stand-Up India: The Stand-Up India scheme provides loans up to Rs. 1 crore to SC/ST and
women entrepreneurs for setting up new ventures in the manufacturing, services, or trading
sectors. The scheme aims to promote entrepreneurship among these communities and
provides support through the entire loan process.
• Private Sector Initiatives: Apart from government initiatives, the private sector has also taken
steps to promote MSME financing. Some of these initiatives include:
• Online Lending Platforms: Several online lending platforms have emerged in recent years that
offer MSMEs an alternative to traditional bank financing. These platforms use technology to
assess creditworthiness and provide loans quickly and efficiently.
• Collaborations with Government Initiatives: Many private sector entities have partnered with
government initiatives such as the CGTMSE scheme to provide financing to MSMEs. These
collaborations have helped increase awareness about government schemes and make it easier
for MSMEs to access financing.
the Problem
• Public-private partnerships, alliances, and collaborations can have
significant implications for SME financing. By leveraging the
strengths of both the public and private sectors, these partnerships
can help to bridge the funding gap for SMEs, facilitate knowledge
transfer, and promote innovation. Here are some statistics that
highlight the impact of public-private partnerships and collaborations
on SME financing:
• In 2018, the International Finance Corporation (IFC), a member of the
World Bank Group, invested $2.2 billion in private sector projects in
emerging markets, including SMEs.
the Problem
• The IFC has also launched various initiatives to promote SME
financing, including the SME Ventures Program, which provides equity
investments to SMEs in emerging markets.
• In 2020, the UK government launched the Coronavirus Business
Interruption Loan Scheme (CBILS), which provides government-
backed loans to SMEs affected by the COVID-19 pandemic. The
scheme is delivered through a network of accredited lenders,
including banks and non-bank finance providers.
the Problem
• In 2021, the Indian government launched the Asset Reconstruction
Company (ARC) scheme, which aims to address the issue of non-
performing assets (NPAs) in the banking sector. The scheme involves
the creation of a new ARC that will acquire stressed assets from banks
and other financial institutions, and work towards their resolution.
• In 2019, the Asian Development Bank (ADB) approved a $100 million
loan to India's Yes Bank to finance SMEs and small-scale infrastructure
projects. The loan is part of the ADB's efforts to promote inclusive
economic growth and support the development of SMEs in the
region.
the Problem
• Financing is a crucial factor for the growth and development of
MSMEs in India. However, the challenges faced by MSMEs in securing
financing have hindered their growth potential. Lack of credit history,
inadequate collateral, lack of awareness about government schemes,
and high-interest rates are some of the significant challenges faced by
MSMEs in securing financing.
• The Indian government and private sector have taken various
initiatives to address these challenges.
Importance Of Small Scale Industries..
• In every economy small businesses are a million little integral parts of a
lavish car which help the engine keep running but all that someone can see
from the outside are the four tyres (i.e. big corporations) that give the car
speed. It is confirmed that 65-75% of the innovation in India come from the
industry of small business. Let us learn about the vital role small businesses
play in our economy and the problems they face. Small businesses play a
crucial economic role in creating job opportunities, fostering innovation, and
promoting local economic growth. They contribute significantly to a
country's overall economic growth and stability despite their size.
• Small businesses are vital to our economy, and their influence cannot be
overstated. These businesses are often a community's backbone, providing
local residents with jobs, goods, and services.
MSME Statistics
• 96% of the industrial units belong to small companies in the Indian

economy. The small companies account for 40% of the nation’s overall
industrial production and 42% of all Indian exports. Small companies also
offer various opportunities in the rural and urban areas of the country.
The Indian economy generally experiences unemployment and small
firms have helped increase the employment chances for the people.
• In India, 7.56 lakh employment was created, home to 75,000 recognized
start-ups, 12% cater to Information Technology services, 9% of the
healthcare and life sciences, 7% to education, 5% to commercial and
professional services and 5% to agriculture. Over the last six years, there
has been a 110% yearly increase in the creation of jobs.
Small Business Job Creation
• India has witnessed rapid growth in start-ups. According to the

Ministry of Commerce and Industry, the recent start-ups of around
10,000 were approved in 156 days in opposition to the initial 10,000
which got approved in 808 days. Also, the Tier-2 and Tier-3 cities are
said to account for 49% of the start-ups.
• MSMEs created 120 million jobs across all industries in India. Micro
and small enterprises play an important role in the economy because
of it and 33% account for India’s GDP.
Industry Specific
• MSMEs are very essential as they create a lot of job opportunities at a

relatively lower capital cost than large industries in India. Additionally,
they help to industrialize underdeveloped and rural areas, which
ensures a more fair distribution of income and wealth across the
country and reduces regional disparities.
Industry Specific
Sector Job Creation (in lakh)

Trade 387.18
Manufacturing 360.41
Other services 362.82
Indian Brand Equity Foundation Stats:
States Employment Statistics

Maharashtra 32.76%
Tamil Nadu 18.84%
Uttar Pradesh 17.24%
Gujarat 13.72%
Rajasthan 13.63%
• Let's delve into the roles and significance of small scale industries in India:
1-Generation of Employment: Small scale industries serve as a significant employment generator in India.
Employment is a crucial determinant of a nation's growth. Hence, the promotion and development of
small scale industries can lead to increased job opportunities, further promoting national growth.
2-Lower Capital Requirement: Unlike large scale industries, small scale industries require less capital. In
countries like India, where capital is limited, small scale industries can help maintain a balance.
3-Resource Utilization and Entrepreneurial Skill Development: Small scale industries provide
opportunities for entrepreneurial skill development, especially among the rural populace who do not
have access to large scale industries. These sectors also utilize resources available in rural areas,
promoting rural development.
4-Equal Distribution of Income: By generating employment opportunities, small scale industries can help
achieve equal income distribution, especially among the youth in underdeveloped regions. This can
significantly contribute to national growth in terms of employment and human development.
5-the sector. Small scale industries can provide alternative employment opportunities, promoting
balanced occupation distribution.
6-Maintenance of Regional Balance: Large scale industries are often concentrated in big cities,
leading to migration and resulting in overcrowding and environmental degradation. Small scale
industries can help maintain regional balance by providing employment opportunities in various
regions, reducing the need for migration.
7-Shorter Production Time: Small scale industries have a quicker production cycle compared to
large scale industries. This can facilitate the flow of money in the economy.
8-Support for Large Scale Industries: Small scale industries contribute to the growth of large scale
industries by manufacturing ancillary products or small components used in the assembly of final
products by large industries.
9-Boosting Exports: Small scale industries contribute approximately 40% of India's total exports,
significantly contributing to the nation's revenue. They also work towards increasing the foreign
exchange reserves of the country, reducing the pressure on the balance of payments.
10-Decreasing Agricultural Dependence: A large portion of the rural population depends on
agriculture, which can burden
• The presence of small businesses is vital for large businesses for several reasons.
• 11-They Serve as Suppliers and Partners for Large Businesses
• Many large businesses rely on a network of small businesses to provide raw materials, components,
and other inputs used in production. Large companies can access a diverse range of products and
services by working with small businesses. This can reduce costs and improve efficiency.
• For example, a small farm that provides a major retail chain with organic vegetables or a logistics firm
that manages transportation.
• 12. They Act as a Source of New Talent and Ideas for Large Businesses
• Many small businesses are run by entrepreneurs constantly innovating and looking for more innovative
ways to grow and succeed. By partnering with small businesses, large companies can tap into this
entrepreneurial spirit and access new ideas and approaches to drive their growth and success.
• For example, a small software company that creates cutting-edge technology for a big software
company or a small consulting firm that offers fresh perspectives and business plans to a big consulting
firm.
• 13. They Help Create a Vibrant and Diverse Economy
• This benefits large businesses. When small businesses thrive,
consumer spending increases, which drives demand for large
businesses' products and services. Additionally, a diverse and vibrant
economy can attract top talent and investment, benefiting large
businesses.
• For example, a small coffee shop that brings people into the
downtown area and helps the nearby businesses or a small
construction business that creates employment opportunities and
boosts the local economy by hiring and training local residents.
The Social Impact of Small Businesses
• Small businesses have a significant social impact in India. They can contribute to social and demographic changes in many
ways.
• 1. Creation of Employment Opportunities
• Small businesses can have a social impact by creating employment opportunities. Small businesses are often a significant
source of employment in India, particularly in rural areas, and can provide livelihoods for many of the population.
• Small businesses can reduce poverty and improve living standards for individuals and families by providing employment.
• 2. Promoting Entrepreneurship
• Another way small businesses can have a social impact is by promoting entrepreneurship. Small businesses often
encourage entrepreneurship and risk-taking, fostering a culture of innovation and creating new opportunities for
individuals to start their own businesses. This can increase economic mobility and break down traditional barriers to
success.
• 3. Development of Local Rural Communities
• Small businesses can also have a social impact by contributing to the development of local rural communities. Many small
businesses are actively involved in their communities and can provide resources and support for local initiatives and
projects. This can improve the quality of life for individuals in these communities and lead to a more cohesive and
connected society.
Problems faced by small businesses
• Just like they have various advantages, small businesses also face a lot of difficulties. Here
are some of the common problems small business might face.
• Finance: One of the major difficulties that they face is finance. Since insufficient money is
pumped into small businesses, it leads to major hindrances in their way.
• Small businesses generally don’t have credit worthiness and these financial
problems make the scenario even more difficult for them.
• Raw material: Without proper access to raw materials, small businesses cannot function.
Access to raw materials gets even more restricted because small businesses do not have
enough capital to purchase them in big lots. Access to the storage facility is also an issue.
• Managerial skills: Since they cannot employ a huge number of people, most of the work is
done by the few employees they have. These people might lack basic managerial skills and
education. In most cases, a single person has to manage most of the operations which
makes it even more difficult.
Problems faced by small businesses:-
• Lack of research: Small scale businesses have limited access at their disposal and this is why they
cannot spend a huge amount on science and technology. Due to the lack of cutting-edge
technology, they are left behind. They often have to use old techniques and obsolete machines,
which makes them incompetent in the market.
• Difficulty in getting loans: Small scale businesses also face difficulty in getting loans. They also
don’t have the capacity to bear losses for a long time. Entrepreneurs have realized this even more
during the pandemic. Many small-scale factories have closed down during this time.High cost of
production, wastage of by-products, and competition with large-scale producers are some of the
other disadvantages that small-scale businesses face. Nevertheless, their nature of demand and
direct relation between producers and consumers are some of the positives.
• Marketing: No matter how good your product or services are, you need to invest in advertising
and marketing to thrive in the market.This is where small businesses lag as they do not have a
good marketing channel and enough capital to promote the same.Direct marketing becomes
difficult for these companies as they lack the basic infrastructure for the same. Thus, they get
exploited by middlemen.
Historical Development of Small Scale
Business Enterprises.
• We can understand the history and evolution of MSMEs in India through three separate time
periods. These time periods are "pre-British rule", "pre-independence", and "post-
independence".
• The pre-British period of the Indian economy was primarily agrarian. A vast part of the
subcontinent had villages that were self-sufficient to a certain extent. Village-level artisans were
able to provide for local needs. They had limited market access due to geographic factors during
that period. However, urban centers (places of pilgrimage, administrative places, and trade
towns) had a high level of economic activities, including the production of various goods. They
primarily met the needs of the local market. However, a significant portion of this production is
exported. Local producers were producing textiles, utility-oriented handicrafts, silk cloths, muslin,
shawls, carpets, wooden works, artistic glass works, and colored glass works. Apart from these,
ornaments made in India, jewelry, brass-works, ivory work, and several other notable products
gained prominence and achieved significant admiration across the world. The political landscape
was largely supportive; however, as political uncertainty and fragmentation increased, these
activities also faced some difficult times. Despite this, they have remained relevant and growing.
Business Enterprises
• The Mughal Empire started declining and the political prominence of the East
India Company (EIC) grew. British rule started taking shape, and during the
same time, the industrial revolution in Europe and America attained great
heights. Therefore, new manufacturing processes were implemented in these
areas for the mass production of goods. This mass production required raw
materials and market access for finished goods. The EIC was well aware of this
opportunity and used its prominence to exploit the Indian subcontinent for
both purposes. During this period, raw materials became more dominant than
finished goods for export. As mass-produced goods flooded the Indian market,
locally produced goods and their manufacturers started to lose their business.
This leads to the systemic destruction of local manufacturing as they lose both
local and foreign markets. This effect was primarily visible in urban centers and
trading towns.
• As British rule transitioned from the EIC to the British monarchy, the industrialization of India also brought mass
production units in the country, which further aggravated the situation of local manufacturers. This period was not
good for local industries and became a victim of unfair market situations. This consequently leads to the destruction
of any future growth or evolutionary prospects of these industries.
• Post-independence, the political landscape changed, as did the business environment. Political leadership took the
route of a planned but mixed economy, under the guidance of socialist ideals. The importance of these enterprises
was well underscored, which led to a slightly favorable outlook for these entities. The seeds of the transformation
were sown during the pre-independence transition phase, as Khadi became a symbol of self-reliance and political
change. During this time for the first time, a Khadi production center was established and it was managed by “All
India Khadi Department” which was established in 1922. Taking cue from its symbolic spark, the following year in
1923, it was replaced by the All India Khadi Board to create its wider outreach. To make it inclusive and spinner-
driven, this board was replaced by the All India Spinners Association in 1925. As Khadi witnessed some
organizational activities in the pre-independence phase, the “National Planning Committee” was established in 1938
by the Indian National Congress. This committee was responsible for providing formal identification to “Small Scale
and Cottage Industries.” These industries were also known as “Village and Small Industries” In the year 1947 an
“Industrial Conference” was organized by central government which further segmented “Village and Small
Industries” (VSI) into three categories. These categories were Service enterprises, Manufacturing and, Auxiliary
Enterprises. (Auxiliaries supported the large units. Service enterprises provide intangible services.
Role of Small Business in India
• Small businesses play a vital role in the economy. Think of the

luxurious car that you see on the roads daily. The final product is the
outcome of many small businesses that are integral parts that help
the engine to run. It is these millions of small industries that get you
the dream car. It has been seen that 65-75% of the innovation comes
from small business industries. Here you will learn about the major
role played by the small business and all the issues that are faced by
them.
• Role of Small Business in India

• Industrial Units: In an economy like India, the majority of the industrial units are
because of small business. This today accounts for more than 95% of the units.
Almost 40% of the total industrial units are contributed because of the small
industries. The small businesses are bagging around 45% of the total exports that
happen from India.
• Labor - Oriented: Small businesses generate a lot of labor. They give many
employment opportunities to those living in rural and semi-urban areas. The small
businesses help to lift the weight of unemployment in any economy. This is a
significant role that they play predominantly in a country like India. India has a
large labor force and the Indian government also encourages small industries that
employ and utilize labor. The government encourages small businesses by drafting
various policies and offering low-interest rates.
• Human Resource: The small businesses rank next to agriculture to employ in

the Indian economy. As compared to many big companies, the small
businesses are capable of generating the maximum employment
opportunities for each unit of capital that is invested. This makes the small
business the second largest employment generator in the economy.
• Utilization of Local Resources: The local community needs and demands let
the small businesses to emerge in the semi-urban and the rural areas. The
small businesses are community-based, and these are focused to work for
and generate employment in a few areas. This lets any business utilize local
resources like talent, raw materials, demographic opportunities and labor.
When there is ample mobilization and utilization of any local resources, this
helps to improve the economic condition of a particular area.
• Flexible and Adaptable: Any new business opportunity gets captured at the
correct time. Small businesses get an edge when it comes to adapting and
growing in the light of any upcoming changes. The small business usually is the
manufactures and the distributors, and they are thus capable of generating a
personal touch with the business and with their clients as well. There is also no
government intervention in the case of small businesses as these are limited in
finance and size.
• Promotes Development & Growth: Development of the region plays an
important role in contributing to the country's development. The establishment
of small businesses in any region or area helps to uplift the lifestyle, earning of
the people residing. Businesses bring in more exposure to foreign markets,
production scale and the overall evolution of state as well as workers.
• Increased Tax Revenue: The industries need to pay the required

amount of tax to government bodies, which is in turn used for the
development of rural regions and to fulfill the demands of cities.
When businesses operate, they do look for profits. And when more
profits come in, more taxes are devoted to the government of the
country. The taxes therefore generated are contributed to upliftment
services such as healthcare, education, defense field and many more.
Problems of Small Businesses
• These are the problems faced by small businesses.

• Finance
• The major small business problems faced is the inadequacy of funds to funnel in the operations. This hinders the business from
developing. The small business does not have enough creditworthiness that is important in the capital market, and thus there are
financial problems faced by small businesses. The industrial investors or the banks ask for collateral as security. The small businesses
operate in the semi-urban and rural areas, and this makes it difficult for them to get their finances.
• Raw Material
• Businesses need raw materials for production. They need some input to generate output. The raw material quality is the challenges
faced by small businesses as it depends on what is inputted into it. However, it is possible that because the small business is tight on the
budget, they are not able to get raw materials of good quality. Also, because these industries purchase in small lots, they do not have a
lot of bargaining power. The storage facility is also an issue here. This is why the small business needs to be quick to produce and to sell
the goods. This is among the major problems of small scale business because they cannot hold on to their inventories for long.
• Managerial Skills
• The small business operations are done by limited employees. In most cases, a single person only will manage all the operations. The
manager has a lot of pressure to meet production demands. Also, it is possible since the small business cannot hire well-read managers.
The managers may lack the basic managerial skills that are needed to operate any unit. These are the challenges of small business.
Problems of Small Businesses
• Skilled Labor
• Skilled labor is among the problems of small scale enterprises. Small businesses have a fund shortage because of
which they are not able to employ skilled labor to do the job, which is one of the challenges of small scale business.
They cannot pay very high wages to their employees, and thus they have to make do with a low skill level. This results
in a productivity drop, and the labor rates are high. This again is a major concern in the production operations.
• Marketing
• Here are the small business marketing problems. The small business needs to sell the product to make profits, and for
this, they need a marketing channel. The business needs a marketing channel that can help it achieve its sales goals.
Because of the lack of infrastructure, direct marketing is not possible for these companies and is one of the problems
of small entrepreneurs. The lack of funds hinders the small business to hire a middle man to make the sales. These
middlemen exploit these companies by paying a low price and delaying payments. This is another of the challenges
facing small business enterprises.
• The small business plays a key role in the economy of the country. There are many problems with small enterprises.
However, if the country has to fulfill its aim of becoming a global hub of manufacturing, then it does need small
business in its country. As is rightly said by Amarendra Sinha, Special Secretary and Development Commissioner at
India’s Ministry of Micro, Small and Medium Enterprises, it is the small business that can lead the charge of
manufacturing.
Importance of SSIs in India
• SSI is one of the significant segments of the Indian economy, contributing

about 7 per cent to the Indian GDP and providing employment to over 28
million people. The Indian SME segment's current production value is
almost Rs 816,000 crore. It contributes to around 40% of industrial
production & exports. It manufactures more than 8,000 diverse products,
ranging from low-tech items to technologically-advanced products. The SSI
sector targets both domestic as well global markets. SSIs sector is
recognized as the engine of growth, accounting for about 70% of
employment and contributes a significant amount for the growth of GDP.
Globally, 99.7 per cent of all enterprises in the world are SME's and the
balance 0.3 per cent are large-scale enterprises. By contrast, the SSI sector
in India accounts for 95 per cent of all industrial units.
Zero Defect and Zero Effect (ZED).
• Ensuring competitiveness of India's MSME is critical as it will contribute to
the overall growth of the manufacturing sector and the country's economy.
International companies competing in global markets focus on their
competitive strengths of costs acceptable to the market, technology,
innovation, service delivery, lean manufacturing, and defect free products
for Zero Defect and Zero Effect (ZED). It is hence prudent that we must
quickly set the pace for the template of industrialisation and export fuelled
growth to make a mark in global markets and improve our GDP. We should
manufacture goods in such a way that they carry zero defect and that our
exported goods are never returned to us. We should manufacture goods
with zero effect that they should not have a negative impact on the
environment".
Zero Defect and Zero Effect (ZED).
• With an aim to make India a global manufacturing hub, the Prime Minister gave an
open invitation to manufacturers and investors across the world to establish
manufacturing units in India.
• "I want to appeal to the entire people world over, "Come, make in India", "Come,
manufacture in India". Sell in any country of the world but manufacture here. We have
got skill, talent, discipline, and determination to do something," he said. He further said
"We want to give the world a favourable opportunity that come here, "Come, Make in
India" and we will say to the world, from electrical to electronics, "Come, Make in
India", from automobiles to agro value addition "Come, Make in India", paper or plastic,
"Come, Make in India", satellite or submarine "Come, Make in India". Our country is
powerful. Come, I am giving you an invitation," he said."As I say to the world "Come,
Make in India", I say to the youth of the country – it should be our dream that this
message reaches every corner of the world, "Made in India". This should be our
dream,"
Export Opportunity For SMEs In India
• Exports hold significant potential for Micro, Small, and Medium Enterprises (MSMEs) in India as a key
avenue for business growth and sustainability. This statemment is all the more important connsidering
the fact that export boost has become a top priority for Modi Government. And Indian MSMEs are the
focal point for this priority.
• Engaging in international trade allows MSMEs to access a broader customer base, diversify revenue
streams, and reduce dependency on local markets. With the advent of digital technologies and e-
commerce platforms, MSMEs can overcome traditional barriers to entry in global markets, reaching
consumers and business partners worldwide. Exporting also provides opportunities for economies of
scale, enabling MSMEs to optimize production and operational efficiency. Moreover, exposure to
diverse markets fosters innovation and adaptability, as MSMEs learn to tailor products and services to
meet the specific needs and preferences of international customers. Collaborating with foreign
partners and navigating different regulatory environments enhances the resilience and
competitiveness of MSMEs. Governments often offer support and incentives for businesses venturing
into exports, further facilitating the global expansion of MSMEs. Embracing the potential of exports
allows these enterprises to contribute not only to their own growth but also to the overall economic
development of their regions and countries.
• MSMEs can leverage various opportunities in the modern age exports business. The global marketplace has
become more interconnected, and technological advancements have opened up new avenues for smaller
businesses to engage in international trade. Here are some opportunities for MSMEs in the modern age exports
business:
• 1. E-commerce Platforms:
- MSMEs can tap into global markets through popular e-commerce platforms. These platforms provide a
convenient and cost-effective way to reach international customers without the need for a physical presence in
foreign markets.
• 2. Digital Marketing
- Leveraging digital marketing strategies can help MSMEs establish a global online presence. Social media, search
engine optimization (SEO), and online advertising can be powerful tools for promoting products and services to a
worldwide audience.
• 3. Blockchain Technology:
- Blockchain can enhance transparency and security in international trade. MSMEs can use blockchain for supply
chain management, ensuring the authenticity of products, and facilitating secure cross-border transactions.
Blockchain:-
• Blockchain defined: Blockchain is a shared, immutable ledger that facilitates the
process of recording transactions and tracking assets in a business network.
An asset can be tangible (a house, car, cash, land) or intangible (intellectual
property, patents, copyrights, branding). Virtually anything of value can be tracked
and traded on a blockchain network, reducing risk and cutting costs for all involved.
• Why blockchain is important: Business runs on information. The faster it’s received
and the more accurate it is, the better. Blockchain is ideal for delivering that
information because it provides immediate, shared and completely transparent
information stored on an immutable ledger that can be accessed only by
permissioned network members. A blockchain network can track orders, payments,
accounts, production and much more. And because members share a single view of
the truth, you can see all details of a transaction end to end, giving you greater
confidence, as well as new efficiencies and opportunities.
• 4. Customized Products for Niche Markets:
- MSMEs can focus on creating unique and customized products to cater to niche markets. This approach allows
them to stand out in a crowded global marketplace and build a loyal customer base.
• 5. Collaboration and Networking:
- Collaborating with other businesses, both domestically and internationally, can open up new opportunities for
MSMEs. Networking and forming strategic partnerships can provide access to new markets, distribution channels,
and resources.
• 6. Government Initiatives and Support:
- Many governments offer support and incentives for MSMEs involved in export activities. MSMEs should explore
government programs, subsidies, and trade agreements that can facilitate and encourage international trade.
• 7. Adoption of Technology:
- Embracing technology such as cloud computing, data analytics, and automation can enhance efficiency in
production, logistics, and overall business operations, making MSMEs more competitive in the global market.
• 8. Focus on Sustainability:
- Many consumers worldwide are increasingly conscious of sustainability. MSMEs can

differentiate themselves by adopting eco-friendly practices and offering sustainable products,
appealing to environmentally conscious consumers in various markets.
• 9. Economic and Market Research:
- MSMEs should invest in thorough market research to identify trends, demand patterns, and
potential competitors in target markets. This information can guide strategic decision-making
and help businesses tailor their offerings to meet specific market needs.
• 10. Easier Access to Finance:
- Financial barriers for MSMEs have decreased with the rise of alternative financing options,
including online lending platforms and crowdfunding. These avenues can provide the necessary
capital for MSMEs to expand their international operations.
• 11. Compliance with International Standards:
- Adhering to international quality and safety standards is crucial for

successful exports. MSMEs should invest in obtaining necessary
certifications to build trust with international customers.
• By capitalizing on these opportunities and staying adaptable to
changing market dynamics, MSMEs can successfully navigate the
complexities of the modern age exports business and expand their
footprint in the global marketplace.
• 12 Best High Demand Products for Export in India
• 1. Petroleum Products
• Many semi-products are made of petroleum-like charcoal, coal, coke, and wax. These products have a massive demand
in some developing neighbouring nations like Bangladesh, Bhutan, Nepal, Myanmar, etc. It's undoubtedly a very
lucrative export business, but keep in mind that you need heavy investment for this.
• 2. Precious Stones and Gems
• India has always been known for its jewelry and precious stone exporters. There's no deficiency of markets that import
gold, silver, gems, semi-precious stones, etc., and India is one of the top exporters of local handmade jewellery.
• If you participate in the same business, you can reap great profit margins. If you plan to export precious stones, you
need an in-depth knowledge of these gems, and their quality, because a slight up/down in quality means a lot of
difference in the cost.
• 3. Mineral Fuels
• You'll be shocked to know India has 87 sorts of minerals out of which 47 are non-metals, 10 are metallic minerals,
bifurcated as 40 sorts of fuel minerals and 26 others. Iron ore is the leading mineral in export, and it is undoubtedly a
vast market. A huge advantage is a never-ending demand for these minerals.
• 4. Mechanical Equipment
• India is the leading manufacturer of mechanical appliances. Indian manufactured tractor–driven harvesters and self-propelled harvesters are
used in numerous countries from South America, Asia, the Middle East and Africa. Experts even expect further expansion of the demand in the
upcoming time.
• 5. Pharmaceutical Products
• In terms of value, the Indian pharmaceutical industry ranks 14th globally, and concerning size, it stands third. In 2019, India supplied 20% of
the global generic medicines, expected to grow further in the coming years.The pharmaceutical industry has over 8,100 drug production
facilities in India. The top pharmaceutical export products are active ingredients (APIs), finished drugs (FDFs), biopharmaceuticals and other
medical services. India leads the world in pharmaceutical factories as per the U.S. Drug Control Agency outside the U.S.The pharmaceutical and
drug products export business is among the most liquid and lucrative export businesses globally, and surprisingly, it's still an easy choice for any
small exporter in India.
• 6. Dairy Products
• India reaps great profit by exporting dairy-based products to many countries. Milk from Indicine cattle is highly sought after in Western
markets. The cost of products derived from these kinds of milk is easily sold at around four times the price of local dairy products.
• Also, some major Indian dairy exports include ghee, cheese and curd. Dairy products are a very lucrative export proposition. However, it would
be best if you kept a sharp eye on quality controls, packaging and refrigeration because of the shorter shelf life of these products.
• 7. Leather and Its Products
• India is one of the leading leather exporting nations, and several markets worldwide pay very high for leather products. These products include
purses, coats, shoes, cricket balls, etc. Many leading luxury brands import leather from India at very low costs.
• The U.S and Europe have traditionally been the big markets for Indian leather goods. You can even target some small countries to play the
game in the low competition. Even demand for semi-treated leather is high.
8. Textile Products
• The textile industry has always served as the trump card for the Indian export monopoly. This industry has direct
employment of 45 million, and the Indian government is very generous towards exporters of textile products.
• Many countries like the U.K., U.S., UAE, etc., always have a demand for Indian textile, accounting for around 50%
of the entire textile exports from India.
• Numerous natural and artificial fibres can be exported from India, and even as a very small exporter, you can get
large orders. Many small-scale jute exports have expanded at an incredible rate in recent years. Besides jute, India
is a leading exporter of many other fibres. If you ask which textile product is most exported from India, the answer
will be cotton.
• 9. Organic Chemicals
• Whenever we talk about India's most exported product, organic chemicals are always a strong point of discussion.
The market is pretty wide, and a wider market always offers great opportunities to importers and exporters.
• Today, India exports agrochemicals, organic, and inorganic chemicals to numerous countries in South America,
Africa, Europe and Asia.
• 10. Homoeopathy and Medicines
• If you're in the mood to export the most profitable products from India, you shouldn't ignore Homoeopathic and Ayurvedic medicines. India
has become one of the big exporters of alternative medicines to the western world in the last decade.
• Thousands of medicines fall under this category. If you can explore the demand and buyers across the seas, you can comfortably begin an
alternative exporting business with very little investment.
• Homoeopathic and Ayurvedic medicines bring you great exporting opportunities, and undoubtedly you can enjoy huge returns even after
selling these meds at a very competitive price.
• 11. Cereals
• Holding the reputation of a great cultivating nation, India has been very active in Agro-based export for a long time. Presently, we're
exporting cereals to Iran, UAE, Iraq, Saudi Arabia, and other Middle Eastern countries. There is a great demand in the whole gulf, and India
exports rice in enormous quantities to these countries. Most importantly, the government highly supports the export sector of cereals and
promotes it by giving exporters many concessions and benefits. Small businesses get a lot of support to thrive.
• 12. Meat Products
• India holds the biggest vegetarian population in the world. People from Western countries consume more meat products per capita than
Indians when comparing meat consumption. India faces no difficulties in meeting its local demands, and that is where the doors for export
open.
• Many countries cannot meet the meat consumption scale in their countries, and they've got no option other than exporting meat from
other countries. India is a huge exporter of buffalo meat, and beef consumption is banned almost throughout India, leaving the majority for
export. Besides beef, India is also a huge exporter of pork. India also is a major seafood exporter, with it single-handedly fulfilling the
seafood requirements of many land-locked countries.
Issues and challenges of MSMEs
• Micro, Small, and Medium Enterprises (MSMEs) in India face a
multitude of challenges that hinder their growth and sustainability.
From strategic planning and human resource management to finance
and compliance, these enterprises encounter obstacles that require
effective solutions. India has a large number of registered Micro,
Small, and Medium Enterprises (MSMEs) which amount to 7.9 million.
These enterprises are significant contributors to the country’s
economy, accounting for 33% of the GDP.
• They also create more than 120 million jobs across various industries
and regions, playing a crucial role in generating wealth at the
grassroots level. The MSME sector provides opportunities for
entrepreneurs who are often overlooked, such as women and
marginalized individuals, empowering them and contributing to
wealth creation. In the fiscal year 2022 alone, 8.59 lakh MSMEs led by
women were registered on the Udyam portal, accounting for 17% of
the total MSME registrations. Overall, 63.4 million MSME units
contribute 6.11% to the manufacturing GDP and 24.63% to the
services GDP.
• One significant challenge faced by MSMEs is the absence of strategic planning.
Many entrepreneurs venture into their businesses without a well-defined
roadmap, leading to inefficiencies and missed opportunities. Business
consultancies offer expertise in formulating tailored strategic plans, helping
MSMEs identify goals, assess risks, and develop actionable strategies for growth.
• Efficient human resource management is another common challenge. Limited
resources and the lack of dedicated HR personnel often result in ineffective talent
acquisition, training, and retention processes. Business consultancies can
streamline HR functions, ensure compliance with labor laws, and implement
performance management systems. They provide guidance on creating a
conducive work environment, fostering employee engagement, and facilitating
skill development to enhance productivity.
• One significant challenge faced by MSMEs is the absence of strategic
planning. Many entrepreneurs venture into their businesses without a
well-defined roadmap, leading to inefficiencies and missed
opportunities. Business consultancies offer expertise in formulating
tailored strategic plans, helping MSMEs identify goals, assess risks,
and develop actionable strategies for growth.
• Efficient human resource management is another common challenge.
Limited resources and the lack of dedicated HR personnel often result
in ineffective talent acquisition, training, and retention processes.
Business consultancies can streamline HR functions, ensure
compliance with labor laws, and implement performance
management systems. They provide guidance on creating a conducive
work environment, fostering employee engagement, and facilitating
skill development to enhance productivity.
• Keeping pace with technological advancements and market trends is
crucial for MSMEs. However, upskilling and reskilling employees can
be challenging due to time and resource constraints. Business
consultancies identify skill gaps and design customized training
programs, collaborating with industry experts to empower MSMEs
with a highly skilled workforce capable of meeting market demands.
• Managing cash flow is a perpetual challenge for MSMEs. Limited
working capital and an inadequate sales funnel can disrupt business
operations. Business consultancies assist in creating a robust sales
funnel, optimizing pricing strategies, and implementing credit control
measures. By analyzing market trends and devising tailored marketing
and sales strategies, consultancies help MSMEs stabilize cash flow and
ensure better-working capital management.
• In addition to management aspects, MSMEs face challenges in
finance, technology adoption, skilled labor availability, and
compliance. Access to affordable finance options, reluctance to
embrace technology, difficulties in finding and retaining skilled labor,
and navigating complex regulations pose additional hurdles. Business
consultancies provide valuable insights, connect MSMEs with financial
institutions, advise on technology adoption, facilitate talent
acquisition, and ensure compliance with legal requirements.
• Main Challenges for local MSMEs: 1. Domestic market for output: able
to compete with imported products or to at least maintain market
share? 2. Foreign market for output: able to export or to at least
maintain export share Main opportunities for local MSMEs: 1. Output
market: Export market 2. Input market: more profitable/efficient as
better quality and cheaper inputs are available in domestic input
market Indicators on Current Capability of Local
• MSMEs to face the challenges: 1. Annual/Current Domestic market
share 2. Annual/Current Foreign market share 3. Quality of internal
organisation/management 4. Annual growth rate of production 5.
Number of certificate owned 6. etc.
• Two Main Channels through which Investment Liberalization affects
local MSMEs. + effects - effects + effects - effects Free flow of fixed
investment inflow of fixed investment (FDI) Outflow of fixed
investment MSMEs ↑ via e.g. subcontracting, transfer of technology,
etc. MSMEs ↓ via e.g. competition pressures in local market. MSMEs
↑ via regional supply chain MSMEs ↓ via less local demand for
components
• Main challenges for local MSMEs 1.able to compete with FDIs 2.to be
accepted as local suppliers for FDI 3.to be accepted as local suppliers
in regional/global value chain Main opportunities for local MSMEs: 1.
To be accepted as local suppliers 2. To open affiliates/factories abraod
Capability of local MSMEs to face the challenges/opportunities
depends on three key factors: 1. Current constraints facing local
MSMEs 2. Current condition/capacity building in local MSMEs; 3.
current government supports (policies/regulations/programs.
Unit-2
Operations Management in Small Businesses
• What is operations management?
• Operations management (OM) is the process of planning, organizing,
directing and controlling the resources and activities of a company in
order to achieve its goals. In other words, it’s the backbone of any
business, big or small.
• In larger businesses, there are entire departments dedicated to
operations management. There is often an OM head of department
and a team of specialists who work together to ensure that the
company is running as smoothly and efficiently as possible.
• Operations management (OM) is the administration of business
practices to create the highest level of efficiency possible within an
organization. It is concerned with converting materials and labor into
goods and services as efficiently as possible to maximize the profit of
an organization.
• In small businesses, Operation Management looks a little different.
You may only have one person who wears the OM hat, and that
person is responsible for all aspects of OM within the company (along
with many other hats).
• Essentials and importance of Operations Management:-
• 1-Define roles and responsibilities
• This is one of the most crucial aspects of setting up and managing a small business — even if there are
only a handful of employees! You need to define who is responsible for what and make sure everyone
understands their role, or else chaos will ensue.
• The following responsibilities will all need to be considered:
• Operations management. Who is responsible for overseeing the smooth-sailing of day-to-day
operations?
• Sales and marketing. Who is in charge of generating leads and closing sales?
• Customer service. How will customers be taken care of and who is responsible for this?
• Finance and accounting. Does someone have the responsibility of tracking expenses and ensuring the
books are balanced?
• Human resources. Do you have someone who is responsible for overseeing the hiring and firing of
employees, as well as their onboarding/offboarding processes?
• 2-Assess tasks In Hand:-
• In small businesses, there’s far less room for error than in their larger
counterparts. Before operations commence, it’s important to take a
step back and assess the tasks at hand. Are they achievable? What
resources will be needed to complete them successfully?
• This preliminary review is key to avoiding common pitfalls in small
businesses, such as inadequate planning or unrealistic expectations. If
you do not have the necessary skills to carry out a task, don’t be
afraid to outsource it.
• Here’s an example: You’ve decided to start a small business producing and
selling custom-made jewelry. A couple of weeks into your new venture, you
receive an order for a necklace that requires 10 different types of beads,
which you don’t have in stock.
• Rather than turning the customer away and losing the sale, you could
outsource the beading to a professional bead supplier. This will ensure that
your customer is happy and that your small business remains profitable.
• If you can’t outsource a task, it’s important to factor in the time and
resources that will be needed to complete it. For example, if you’re starting
a small business that requires producing and shipping products, you’ll need
to calculate the lead time required for production and shipping.
• 3-Continious Assessment:-
• In large companies, errors and inefficiencies can go unnoticed for quite a
while before the bottom line is affected. But in small businesses, even the
slightest misstep can mean the difference between success and failure.
• This is why it’s essential for small business owners to have a clear
understanding of operations management and be constantly reflecting on
and revising their systems.
• This element of operations management is called ‘controlling’, and it
involves the continual assessment and adjustment of your current systems
and processes to ensure that they are as effective and efficient as possible.
• There are a number of techniques you can use to control your operations, such as:
• A-Performance measurement: tracking key performance indicators (KPIs) to see how your
business is performing overall. You can then use this information to make changes and
improvements where necessary.
• B-Process mapping: creating a diagram of your business processes, and then identifying and
addressing any inefficiencies.
• C-Flowcharting: a similar technique to process mapping, but instead of focusing on the entire
process, you focus on specific tasks or steps. This can help you to identify and fix any problems
that may be causing delays or inefficiencies.
• Statistical analysis: using data to identify trends and patterns, and then using this information to
make decisions about how to improve your operations.
• By integrating one or more of these techniques into your operations management strategy, you
can ensure that your business is running as efficiently as possible — no matter how small it may
be.
• 4-Find solutions-
• When problems come up in small businesses, it can be tempting to
sweep them under the rug or put temporary measures in place
instead of addressing the root cause. However, issues when allowed
to stagnate can quickly become bigger problems and can even
threaten the existence of the business.
• Operations management is all about finding solutions to problems so
that they don’t become bigger issues down the road. This means
taking a systematic and analytical approach to identifying issues and
coming up with practical solutions.
• A-. Take a step back and assess the business as a whole. This includes
looking at what is working and what isn’t, as well as how different areas
of the business are interconnected.
• B. Make a list of the issues that need to be addressed. Even if some of
these seem like they are unrelated, it’s important to address them all
systematically.
• C-. Develop solutions for each concern. This may involve changes to
processes, policies, or procedures.
• D-. Implement the solutions and track progress. It’s important to be
vigilant in monitoring how the solutions are working and make changes
as needed.
• 5- Flexibility In Operation:-
• Small businesses need to be nimble and adaptable. The world is constantly changing, and
small businesses need to be able to change with it. This means being willing to
experiment and taking risks. It also means being able to pivot when necessary.
• One of the advantages of being small is that you can move quickly and take advantage of
opportunities as they arise. This agility can be a major asset in today’s competitive
marketplace — especially in industries where technology is constantly evolving.
• To stay flexible, small businesses need to keep the following in mind:
• Flexibility is key, but a clear mission statement is a non-negotiable
• Keep your team small and nimble so that everyone can be responsive to changes
• Be willing to experiment and take risks; that’s how you’ll find new opportunities
• Be prepared to pivot when necessary in order to stay ahead of the competition
SME: Basics of operations management
• Operations management involves utilizing resources from staff, materials,
equipment, and technology. Operations managers acquire, develop, and deliver
goods to clients based on client needs and the abilities of the company.
• Operations management handles various strategic issues, including determining
the size of manufacturing plants and project management methods and
implementing the structure of information technology networks. Other
operational issues include the management of inventory levels, including work-
in-process levels and raw materials acquisition, quality control, materials
handling, and maintenance policies.
We can distinguish seven main functions of operation management in the
industrial enterprise: planning, scheduling, purchasing, controlling, quality
control and inventory control.
BASIC COMPONENTS OF OPERATIONS MANAGEMENT?
• Forecasting: Here, historical data, facts, figures and statistics are used to make decisions
regarding production. This essential step informs how much of a specific product should
be produced, aiming to avoid excess inventory or stock shortages.
• Location strategies: Selecting the right location for an organisation’s operations is key as
it can impact procurement. For example, the location of a manufacturing facility may be
based on availability and proximity to specific materials or skilled labour resources.
Transportation costs can also be a factor. Organisational requirements, values and goals
will help to determine the appropriate location in order to minimise costs and potential
risks.
• Maintenance: Machines and equipment require regular, scheduled maintenance checks.
Proper, routine maintenance creates a safer workplace for employees and reduces the
risk of unexpected breakdowns and failures that could affect production schedules and
quality. Additionally, maintenance ensures machines operate at maximum efficiency for
the longest time, ensuring overall production output remains high.
• Purchasing: This aspect ensures that enough raw materials are available to supply incoming
customer demand for products. With centralised purchasing, a single department organises
purchasing for an entire organisation, whereas decentralised purchasing refers to
departments who organise purchasing for their individual needs. Businesses may also use a
combination of these strategies.
• Scheduling: This involves assigning jobs or operations to the correct machine or labour
resource.
• Total Quality Management (TQM): TQM creates a customer-focused organisation which
aims to improve all company activities to meet customer requirements. It focuses on
optimising processes and working towards zero defects.
• Materials Requirement Planning (MRP): MRP ensures a business receives the correct
amount of each specific material on time in order to meet production targets. It involves
taking inventory of current items, identifying whether additional materials are required,
and scheduling production or purchase of these materials.
• Quality control: It is important for businesses to conform to product

specifications, both for compliance and safety and in order to maintain
positive relationships with customers.
• Just-In-Time (JIT): JIT is the process of scheduling operations so that they can
begin and end ‘just-in-time.’ It ensures that the number of in-progress items
are limited in order for materials and intermediates to progress along the
workflow, and avoids bottlenecks and storage of large quantities of in-
progress items.
• Process and system performance: Through examination, capacity utilisation
and production, businesses can analyse and compare the expected time and
quantity of items produced to the actual values. This helps to identify
whether a production facility is meeting or falling short of its targets.
• Layout of facilities: This component ensures that the most optimal

workflow is established in a production facility.
• Lean manufacturing – originally developed by the Toyota Motor
Company – is the term given to production processes where there is no
waste and where any elements that do not add overall value to the
finished product are removed. It focuses on seven areas of waste; one is
the unnecessary movement of items throughout the facility, caused by
poor workflow, poor layout and inconsistent working methods.
• Inventory management: Keeping track of inventory levels ensures that a
company is carrying the products needed at particular times and helps to
meet demands.
• Operations management entails studying the use of raw materials and

ensuring that minimal waste occurs. Operations managers use
numerous formulas, such as the economic order quantity formula, to
determine when and how large an inventory order to process and how
much inventory to hold on hand. What Is Economic Order Quantity?
• Economic order quantity (EOQ) is the ideal quantity of units a company
should purchase to meet demand while minimizing inventory costs
such as holding costs, shortage costs, and order costs. This production-
scheduling model was developed in 1913 by Ford W. Harris and has
been refined over time.1 The economic order quantity formula
assumes that demand, ordering, and holding costs all remain constant.
EOQ
Gantt Charts
• Gantt Charts
• A Gantt chart, named after the designer, Henry Gantt, is an easy-to-use graphical
tool that helps operations managers determine the status of projects. Let’s say
that you’re in charge of making the “hiking bear” offered by the Toronto Teddy
Bear Company. Below is a Gantt chart for the production of one hundred of these
bears. As you can see, it shows that several activities must be completed before
the bears are dressed: the fur has to be cut, stuffed, and sewn; and the clothes
and accessories must be made. Our Gantt chart tells us that by day six, all
accessories and clothing have been made. The sewing and stuffing, however
(which must be finished before the bears are dressed), isn’t scheduled for
completion until the end of day eight. As operations manager, you’ll have to pay
close attention to the progress of the sewing and stuffing operations to ensure
that finished products are ready for shipment by their scheduled date.
Gantt Charts
Supply Chain Management For Small
Business
• A supply chain includes every step that is involved in getting a
finished product or service to the customer. The steps may include
sourcing raw materials, moving them to production, then transporting
the finished products to a distribution center or retail store where
they may be delivered to the consumer.
• The entities involved in the supply chain include producers, vendors,
warehouses, transportation companies, distribution centers, and
retailers.
Supply Chain Management For Small
Business
• The key steps in a supply chain include:
• Planning the inventory and manufacturing processes to ensure supply and
demand are adequately balanced.
• Manufacturing or sourcing materials needed to create the final product.
• Assembling parts and testing the product.
• Packaging the product for shipment or holding in inventory until a later date.
• Transporting and delivering the finished product to the distributor, retailer, or
consumer.
• Providing customer service support for returned items.
•
Major Components Of The Supply Chain
Management
• Suppliers. These entities provide the materials needed to create the product, whether they’re raw
materials or individual parts to a finished product. For example, Apple’s iPad comes from a variety of
suppliers: Samsung manufactures its processor chips, LG produces the touchscreen display, and Toshiba
creates the flash memory.
• Manufacturers. This stage of the supply chain entails bringing together all of the parts provided by
suppliers to create the finished product. To continue the example, Apple would take each individual part
from the suppliers and put them together to create a finished iPad for distribution.
• Distributors. These entities store and sell the finished product, either at a physical storefront or through
an online store. Locations like Apple stores and Walmart provide physical locations where consumers can
buy an iPad, whereas online distributors ship the iPad directly to a consumer’s door.
• Customers. Consumers create demand for products and ultimately influence the quantity of products and
the overall supply chain structure.
• The organizations that constitute the supply chain are linked together through both physical and
informational means. The physical element involves the creation, shipping and storage of goods — the
obvious, visible part of the process. However, the informational element that allows supply chain partners
to communicate with one another and control the flow of goods is also critical.
Quality management and Process
Improvement.
• Quality Management may be defined as an act of performing all the activities
and tasks which are needed to maintain a desired level of excellence. This
includes creating and implementing quality planning and assurance, as well as
quality control and quality improvement.
• What Is Quality Management Improvement?
• Continuous and consistent quality improvement is a must pre-requisite for all
the Quality Management Systems. Quality improvement is a recurring process
and should be repeated at regular intervals. It is an ongoing process, not a
one-time effort and lasts with the life of an enterprise. Different examples
across industries have proved that any negligence on product quality and
process improvements end up in serious catastrophic results for the company
and its products.
Improvement ISO 9001:2008
• The International Standard for Quality Management (ISO 9001:2008) Has Identified the
Following Management Principles Which Help Organizations to Improve Their Performance
1-Customer-Centric
• Customer’s satisfaction is of the utmost importance for the overall growth of an
organization. All the members of an organization should know about the requirements of
the external as well as the internal customers and also resolve ways to meet those
requirements.
2-Involvement of employees in decision making
• This brings a sense of loyalty among the employees towards the organization and they
become more responsible.
3-Leadership Qualities
• An organization needs to inculcate leadership qualities among its people so that they
establish unity of purpose.
Improvement ISO 9001:2008
4-Process Approach
• This approach helps in attaining the desired result when activities and available resources are managed
efficiently.
5-System Approach to Management
• This approach implies identifying, understanding and managing all systems which are interrelated as a
process. Quality control involves checking transformed and transforming resources in all stages of the
production process.
6-Continual Improvement
• It is one of the most important quality improvement functions and helps in gaining insights about the overall
performance, leveraging clear and concise Process Performance Measures (PPMs).
7-Factual Approach to Decision Making
• Decisions made on a data basis and analyses are always effective and efficient.
• Win-Win Situation for both the organization and its suppliers
• Both organizations and their suppliers are inter-dependent on each other. Therefore, a mutually beneficial
relationship is a must for growth.
Methods Involved In Quality Improvement?
• Following are the globally accepted and recognized methods for Quality Improvement:
• FADE Model:
• This model comprises of four steps- focus (on the process to be improved), analyze (collection and analysis of data to
find possible solutions), Develop (data plans for improvement, implementation, and communication), Execute and
Evaluate (implementation of data plans).
• PDSA Model:
• Another important method of Quality Improvement is based on the PDSA model which involves a combination of
building and applying knowledge. PDSA model comprises of Plan, Do Study and Act. This process runs as a cycle and
needs to be repeated.
• Six Sigma:
• It is one of the most important methods of Quality Improvement. The term ‘Six Sigma’ is derived from the Greek letter,
Sigma which denotes standard deviation of time from the mean. Six Sigma equals 3.4 defects or errors per million. It is a
measurement-based strategy of quality improvement and finds great success in problem reduction.
• Total Quality Management (TQM):
• TQM, as a management approach, was first promoted in Japan and then was adopted in the USA and
Europe. TQM involves total employees participation in improving processes, product, services or the culture in which
they operate. It’s a long term process and aims at customer satisfaction through an integrated approach.
What is Business Process Improvement?
• Business process improvements are methodologies in which a team

evaluates their current processes and adapts them with the intent to
increase productivity, streamline workflows, adapt to changing
business needs, or increase profitability.
Business Process Improvement
• 7 types of process improvement methodologies
• There are seven different business process improvement methodologies your team can use to help
reduce inefficiencies. In most cases, the methodology you choose depends on why you want to
improve your processes and what you’re looking to improve.
• 1. Six Sigma methodology
• Six Sigma is a process improvement methodology that aims to minimize the amount of variations
within the end product. Developed in 1986 by American engineer and Motorola employee Bill Smith,
this process uses statistical data as benchmarks to help business leaders understand how well their
processes work. A process is considered optimized if it produces less than 3.4 defects per one million
cycles.
• Six Sigma is often used in manufacturing, mainly because it helps minimize defects and
inconsistencies. The goal here is to optimize for consistency, which in the end leads to customer
satisfaction.
• There are two main processes used in Six Sigma: DMAIC for existing processes and DMADV for new
processes. .
• What is the DMAIC process?
• DMAIC is a Six Sigma process used to optimize existing processes.
DMAIC stands for:
• Define the opportunity for improvement.
• Measure the performance of your existing processes.
• Analyze the process to find defects and root causes.
• Improve processes by addressing root causes.
• Control any improved processes and assess future process
performance to correct deviations.
2.
Business Process Improvement-Total quality management (TQM)
• Total quality management (TQM) is a customer-focused method that involves continuous improvement over time. This
technique is often used in supply chain management and customer satisfaction projects.
• TQM relies heavily on data-driven decisions and performance metrics. During the problem solving process, you use success
metrics to decide how you can improve a process.
• Here some key features of TQM:
• Customer-focus: The end goal of TQM is always to benefit the end customer. If your team is focused on improving quality,
ask yourself how that process change may affect how end consumers experience your product.
• Full-team involvement: Unlike other process improvement methodologies TQM involves the entire team—not just
production. As a result, you may end up looking for ways to optimize more business-centric processes, such as sales and
marketing, to benefit the end consumer.
• Continuous improvement: Continuous improvement in business is the idea of making small changes with the goal of
continually optimizing processes. There's a lot of variability when it comes to business, and continuous improvement helps
your team adapt when outside circumstances change.
• Data-driven decision making In order to apply continuous process improvement, you must continually collect data to
analyze how processes are performing. This data can help identify where there may be inefficiencies and where to focus
improvement initiatives.
• Process-focused: The main goal of implementing TQM is to improve processes. Other process improvement methods like
Six Sigma work to minimize the amount of defects, while TQM works to decrease inefficiencies.
• 3. Lean manufacturing
• This form of process improvement goes by many names, with lean manufacturing being
the most common. It may also be referred to as Lean production or just-in-time
production. Defined by James P. Womack, Daniel Jones, and Daniel Roos in the book "The
Machine That Changed the World," Lean highlights five main principles based off of the
authors' experiences at Toyota manufacturing.
• The 5 principles of lean
• Identify value
• Value stream mapping
• Create flow
• Establish pull
• Continuous improvement
• 4. Continuous improvement (kaizen)
• The Japanese philosophy of kaizen guides the continuous improvement model. Kaizen
was born from the idea that life should be continuously improved so we can lead more
satisfying and fulfilling lives.
• This same concept can be applied to business—because as long as you are continuously
improving, your business can become more successful. The goal of continuous
improvement is to optimize for activities that generate value and to get rid of any waste.
• There are three types of waste that kaizen aims to remove:
• Muda (wastefulness): Practices that consume resources but don’t add value.
• Mura (unevenness): Overproduction that leaves behind waste, like excess product.
• Muri (overburden): Too much strain on resources, such as worn out machinery or
overworked employees.
• 5. Plan Do Check Act (PDCA)
• The PDCA cycle is an interactive form of problem solving. It's used to improve processes and
implement change. PDCA was created by Walter Shewhart when he applied the scientific method to
economic quality control. Later, the idea was developed even further by W. Edwards Deming, who
expanded on Shewhart's idea and used the scientific method for process improvement in addition
to quality control.
• There are four main steps to the PDCA cycle:
• Plan: Decide on the problem you would like to solve, and create a plan to solve it.
• Do: Test and implement the plan at a small scale.
• Check: Review how the actions in the Do stage performed.
• Act: After reviewing the results of the test, decide whether or not you want to implement the
change at a larger scale.
• PDCA is an improvement cycle. This means that these steps can be repeated until your team reaches
the desired result.
• 6. 5 Whys analysis
• The 5 Whys analysis is a process improvement technique used to identify the root cause of a problem. It's a really simple process in
theory: you gather a group of stakeholders who were involved in a failure, and one person asks: "Why did this go wrong?" Repeat
this question approximately five times, until you get to the root cause of an issue. The 5 Whys analysis aims to identify the issues
within a process, but not human error.
• Here's an example:
• Problem: There was an increase in customer complaints regarding damaged products.
• "Why did this happen?" Because packaging was not sufficient enough to protect the products.
• "Why was the packaging not sufficient enough to protect the products?" Because the team testing packaging did not test past a
certain level of stress.
• "Why did the team not test the packaging further?" Because current standard processes indicated that the testing indicated was
sufficient.
• "Why did the current standard process indicate that this testing was sufficient?" Because this process was created for a previous
product, and not this current product that is coming back damaged.
• "Why wasn’t there a new process for the new product?" Because the project template for launching new products doesn’t include
stress testing the new packaging.
• You can see from this example that the team asked “Why” until they identified the process error that needs to be fixed—in this case,
adding a “stress test new packaging” step into their product launch template. When working with stakeholders in processes like this,
it's important to identify the issues, and co-create next steps together so that your production can improve.
• 7. Business process management (BPM)
• Business process management, or BPM, is the act of analyzing and improving business processes. Much like any
organic being, businesses grow and shift over time. Your team may have implemented processes that worked when
your team was small, but as you grow those processes may not scale in a way that allows your team to be as efficient
as possible.
• Most of the time, BPM helps teams identify bottlenecks, ways to automate manual work, and strategies to improve
inefficiencies. There are five main steps to business process management.
• Analyze: Look at your current processes and map them from beginning to end. This is commonly known as process
mapping.
• Model: Draft out what you want the process to look like. Ideally, you'll have found any inefficiencies in the first step,
and you can draft how you would like to solve them in this stage.
• Implement: Put your model to action. During this stage, it's important to establish key success metrics so you can
gauge whether or not the changes made were successful.
• Monitor: Decide whether or not your project is successful. Are the success metrics you identified in step three
improving?
• Optimize: As the process evolves, continue looking for inefficiencies in your process and continuously optimize as you
go.
Marketing for Small Businesses
Marketing for Small Businesses SME: Importance of marketing in small business success, Developing a marketing strategy,
Marketing for Small Businesses SME: Importance
of marketing in small business success,
• Marketing is important for small businesses because it helps them to:
• Reach their target audience - In today's crowded marketplace, it can be difficult for small businesses to get
their message heard. Marketing helps small businesses to reach their target audience with their message,
whether it's online, offline, or through a combination of channels.
• Differentiate themselves from the competition - In a competitive marketplace, it's important for small
businesses to differentiate themselves from the competition. Marketing helps small businesses to highlight
their unique selling points and to communicate those points to their target audience.
• Build brand awareness - Marketing helps small businesses to build brand awareness among their target
audience. This can lead to increased sales, as well as a stronger competitive position.
• Generate leads and sales - The ultimate goal of marketing is to generate leads and sales. Marketing helps small
businesses to attract new customers and to convert those customers into paying customers.
• Increase customer loyalty - Marketing can help small businesses to increase customer loyalty. This can be done
by providing excellent customer service, offering loyalty programs, and keeping customers informed about new
products and services.
• Grow the business - Marketing can help small businesses to grow their business by attracting new customers
and increasing sales. This can lead to increased profits and a stronger competitive position.
Marketing for Small Businesses
• In short, marketing is essential for small businesses that want to
succeed in today's competitive marketplace. By effectively reaching
their target audience, differentiating themselves from the
competition, building brand awareness, generating leads and sales,
increasing customer loyalty, and growing their business, small
businesses can use marketing to achieve their goals.
Digital Marketing for Small Business
• Digital marketing This is an umbrella term for all of your online
marketing efforts. Businesses leverage digital channels such as Google
search, social media, email and their websites to connect with their
current and prospective customers.
• Digital marketing offers many advantages over traditional advertising methods,

such as print ads and direct mail, billboards, TV and radio. It allows brands to do
more with their resources while empowering the customer to do business with
that brand on their terms.
• At a minimum, online marketing allows customers to find the information they
need even after you’ve closed up shop for the night. It gives them the option to
email questions at any time, rather than forcing them to call during business hours;
it puts your interactions on their schedule and not the other way around.
• Done well, digital marketing is the ultimate way to build authority and brand
awareness in the largest market on Earth: the Internet. Brands can engage directly
with their target audience through social media to learn exactly what consumers
are looking for, and forge authentic relationships that create trust and brand
loyalty.
Digital Marketing Strategies that can be
effective for Small Businesses
• Here are some specific marketing strategies that can be effective for small businesses:
• Content marketing - Creating and sharing valuable content that is relevant to your
target audience can help you to attract new customers and build brand awareness.
• Social media marketing - Using social media platforms like Facebook, Twitter, and
LinkedIn to connect with your target audience and promote your business can be a very
effective marketing strategy.
• Email marketing - Building an email list and sending regular emails to your subscribers
is a great way to stay in touch with your customers and promote your business.
• Search engine optimization (SEO) - Optimizing your website for search engines can
help you to attract new customers who are searching for products or services like yours.
• Pay-per-click (PPC) advertising - PPC advertising allows you to show your ads to people
who are already searching for products or services like yours.
• t it’s easy to experiment with different ideas to reach your audience
on social media, search engines, and your own website. You can try
different types and formats of content to find the best results. The
great thing about most digital marketing campaigns is you can begin
to track reactions soon after they’re launched. That means you can
soon work out which campaigns are delivering the best return on
investment (ROI) and which techniques are most efficient for your
brand.
• Here are the digital marketing techniques that we’ll cover in-depth:
• 1 SEO Analysis-Unlike an audit, which is often a one-time process, SEO analysis involves continuous monitoring of
your website's performance. Tracking key performance indicators (KPIs) helps you adapt your strategies in real-time
to stay ahead of algorithm changes and industry trends.
• 2 On-page SEO Audit:- An audit, which is often a one-time process
• 3 User Experience:- User experience (UX) focuses on having a deep understanding of users, what they need, what
they value, their abilities, and also their limitations. It also takes into account the business goals and objectives of
the group managing the project. UX best practices promote improving the quality of the user’s interaction with and
perceptions of your product and any related services. He notes that in order for there to be a meaningful and
valuable user experience, information must be:
• Useful: Your content should be original and fulfill a need
• Usable: Site must be easy to use
• Desirable: Image, identity, brand, and other design elements are used to evoke emotion and appreciation
• Findable: Content needs to be navigable and locatable onsite and offsite
• Accessible: Content needs to be accessible to people with disabilities
• Credible: Users must trust and believe what you tell them
• 4 Paid Search Ads:- When you type something into Google, you’re presented
with a list of results on the Search Engine Results Page (SERP). Here, you see
both organic results and paid results.
• Paid search results appear at the top of the SERP, and they feature a little
green box with the word "Ad." To start running Search ads and drive traffic to
your website, sign up for a Google Ads account. You’ll only be charged when
someone clicks on your ad and gets redirected to your site.
• 5 Display Advertising:- Display ads are images, videos, or gifs shown to users
on websites or apps. Most display advertising uses square, landscape, or
skyscraper formats with images, copy, and a strong (CTA) to entice users to
click. Display ads resemble ads you might see in a newspaper or magazine,
but they appear on the web.
• 6 Sponsored Social Posts:-Social Media Sponsored Posts. These are
promotional posts on social media platforms such as Facebook,
Instagram, Twitter, or LinkedIn. ...
• Influencer Sponsored Posts. ...
• Sponsored Blog Posts. ...
• Sponsored Videos. ...
• Sponsored Podcast Episodes. ...
• 7 Email Marketing: Email marketing is a form of marketing that can
make the customers on your email list aware of new products,
discounts, and other services. It can also be a softer sell to educate
your audience on the value of your brand or keep them engaged
between purchases.
• 8 Native Advertising: Native advertising is a form of paid advertising in
which the ads match the look, feel and function of the media format
where they appear. They fit “natively” and seamlessly on the web
page. Unlike banner or display ads, native ads don't really look like
ads, so they don't disrupt the user's interaction with the page.
• 9 Customer advocacy marketing:- Advocacy Marketing is a type of marketing
that focuses on getting your current customers to talk about your brand and
products through tools such as testimonials, reviews, and social
mentions. Since over 88% of shoppers research online before buying, brand
advocates help new customers make decisions about the products that the
buy.
• The advantages of Advocacy Marketing?
• Simple.
• Affordable.
• Effective.
• These are the three th
Identifying the Business opportunity:-
• A business opportunity provides an individual or a company with an
amazing chance to expand their current operations, initiate new offerings,
and turn a profit. It can be found in any industry and often exists due to
factors such as technology advancements, product development, market
changes, skill gaps, and even financial benefits. Identification of
entrepreneurial opportunities is an effective way to jumpstart your business
endeavors.
• The world best business opportunity offers advantages that include better
access to resources, relatively easy entry into competitive markets, lower
start-up costs, and the potential for significant profits. Whether you are a
budding entrepreneur or an established business owner, exploring
opportunities can open the door to increased success.
Identifying the Business opportunity
• Business opportunities are essential for business growth and success. Having the right
opportunities gives business owners, entrepreneurs, and investors the ability to maximize
their potential and create a successful business enterprise. Identifying business
opportunities can allow companies to increase their revenue streams by providing unique
products, services, or an innovative approach to a problem.
•
• Identification of business opportunities in entrepreneurship is an important step to
kickstarting your career as an entrepreneur. There are numerous possibilities for
entrepreneurs to explore, including harnessing technology or creating a new niche in an
industry or sector, as well as identifying opportunities that involve taking advantage of
changes in consumer behavior or leveraging resources from other businesses. By correctly
following well-defined steps in the identification of business opportunities, anyone has the
potential to find success in entrepreneurship and create lucrative business ventures.
•
Methods of Identifying Business
Opportunities
• Innovation Brainstorming. ...
• Market Research. ...
• Social Listening & Monitoring. ...
• Availability of Raw Materials. ...
• Internal Demand Analysis. ...
• Market Size. ...
• Management Skillsets. ...
• Access to the customers.
Factors to Consider While Identifying Business Opportunities
• Are you seeking the world no 1 business opportunity like every aspiring entrepreneur out there? Here are some factors to
consider to identify the business opportunity suitable for you:
•
• Availability of Raw Materials
• This ensures you have the necessary resources, such as materials, equipment, and labor, to produce a product or provide a
service. Raw materials are essential for any business opportunity to manifest into a functional one.
•
• Internal Demand Analysis
• Internal demand analysis analyses the potential demand for a product or service within the company or organization. This
can lead to business expansion and identify opportunities within your current business. Who knows, you could even end
up starting an online business for a new business dimension altogether.
•
• Market Size
• Market size helps to determine the potential demand for a product or service in the broader market. Knowing the market
size for a particular product or service can help determine the potential demand and growth and lead to the identification of
business opportunity.
•
Factors to Consider While Identifying
Business Opportunities
• Management Skillsets
• Management skills are crucial for world no 1 business opportunity to manifest into a successful venture. The skills and
experience of the management team are necessary for your business to run.
•
• Access to the customers
• The ability to reach and sell to the target market for a particular product or service is important for your business
opportunities to flourish. You need to have the right marketing strategy to reach your customers and ensure they have
access to the service or products you are providing. (Here are some good customer acquisition strategies for your
reference.)
•
• Need for Financing
• Most importantly, ensure the financial resources required to start and run the business, including funding for initial start-up
costs, ongoing expenses, order management, and future growth.
•
• Passion
• An entrepreneur's enthusiasm and drive for the business opportunity drive the business forward. Likewise, a passion for the
business can sustain motivation and effort through the challenges of starting and growing a business.
Business opportunities in various sectors
• Below is a list of small scale industries in India that have helped aspiring entrepreneurs in their journey.
1-Apparel Boutique Stores:
• Everybody likes to have a well-stocked closet with renowned brands and the latest in fashion, making apparel boutique stores a
popular choice for entrepreneurs to start their entrepreneurial journey. The initial investment required for this business is low, and
you can start this business with a small store and gradually expand as your business grows.Catering:
2-Catering is another profitable small-scale industry in India. With the rise of the food industry, catering has become essential to events
such as canteens, weddings, corporate events, and parties.
3-Papads/Pickle-Making:
• In most Indian households, papads and pickles are a must to complete a meal. There is considerable demand as it is not possible to
make pickles at home nowadays. Expertise in this area of cooking is much appreciated as it is often associated with one’s emotions.
Besides, buying from home-run ventures is considered healthier and economical too.Spices:
4-Pickles-If not cooking or making pickles, making the perfect spice powders and blends for delicious food can also be an attractive small
scale traditional business. Spices have a critical role in Indian cuisine. As a result, there will always be a strong need for them.Indian
Handicrafts:
5-Indian Handicafts-Indian handicrafts are another interesting option from among the small scale industries list in India. With the rise of
the tourism industry, Indian handicrafts have become essential to the country’s culture.Incense Sticks and Camphor-making:
6-Incensed Stics-One of India's most lucrative small scale industries is making incense sticks and camphor. They are a traditional item and
are used in every household in India. Initial investment is required toward machinery and raw materials. Later, the business can be easily
scaled up if the quality is good and there is higher demand.
Business opportunities in various sectors
• 7-Candle Making- candle-making business is simple and can be started from home. Whether for therapy, religious/spiritual
reasons, or simply using candles as art, candle-making is a low-investment business option. They are an excellent gifting
option, too.Salon:
• 8-Salons are another profitable small-scale industry in India. With the rise of fashion consciousness, salons have become an
essential part of people’s lives. The initial investment required for this business is low, but the profit potential is significantly
high.Handcrafted Goods:
• These include scented candles, handmade cards, soaps, woodcrafts, cloth/jute bags, etc. During the pandemic, many small-
scale businesses flourished and made a decent profit from their sale, and handcrafted products are one of the best small-
scale businesses.Sapna aapka. Business Loan Humara.
• 9-Coaching Classes:
• Coaching classes are another profitable small-scale industry in India. With the rise of competition in education, coaching
classes have become essential to students’ lives. One can even coach from the comfort of one's home with a blackboard or a
whiteboard.
• 10-Consultancy Companies:
• Consultancy companies are another profitable small-scale industry in India. With the rise of the service industry, consultancy
companies have become an essential part of businesses.Jobs & Placement Services:
• Jobs & placement services are another profitable small-scale industry in India. With the rise of the service industry, jobs &
placement services have become an essential part of businesses.
Formalities for setting up an enterprise
• Decision to be an Entrepreneur
• Choosing your form of Business Organisation
• Making a Product Choice
• Location of Industry
• Preparation of Business Plan
• Sourcing Process, Raw Materials, Machineries and Equipments
• Infrastructure - Land & Building, Water and Power Supply
• Legal Aspects
• Finance and Working Capital to Start Business
• Human Resource
• Production
• Today's competitive market, it is difficult to maintain stable relationships with
suppliers, customers, brokers, distributors, and even your own company personnel.
Competitors are stealing your best customers. To maintain the edge entrepreneurs
need to synchronies their production process, capacity, and delivery schedule.
• Plan out your work area keeping in mind the requirement of your business. More
often than not the area available to small businesses is limited and within that area
all the work needs to be carried out, right from storing the raw materials to the
final product. The space for each of these should be clearly chalked out.
• Pricing
• In India, price is often affected by excise duty, sales tax and local taxes like octroi, thereby making it difficult to maintain a
uniform price throughout the country. You may opt for any of the following policies or modify and combine them depending
upon your objective or you can have your own pricing policy.
•
Marketing
• Marketing is an important tool to be used while setting up your business. Study, but don't necessarily copy your competitor's
moves. Visit their businesses, watch their ads, figure out their strategies, and keep your eyes open. You may not be able to
keep up with your competitor's strategy move by move. You should, however, be ready and able to blunt or block the impact
of their moves through effective marketing. Then, later, you can make your own offensive move at your own
•
Paying Back Loans and Profit Generation
• Manage your cash Flow to pay back your loans, debts or credits. A healthy cash flow is an essential part of any successful
business. If you fail to have enough cash to pay your suppliers, creditors, or your employees, chances are you will be out of
business very soon. You should pay back the loans so that when you need loans in future, you get one. You can pay the loans
or debts as per terms and conditions initially agreed upon, if you can't pay in time inform the creditor, ask for an extension
stating the reasons. Proper management of your cash flow will ensure the same and is a very important step in making
business successful.
Location of Enterprise
• The study of industrial locations forms an important branch of economic
geography which has engaged the attention of both economists and geographers.
Economists judge from the point of view of profit, productivity and growth.
•
STEPS IN ENTERPRISE LOCATION
• 1.Selection of the region.
• 2.Selection of the locality or community.
• 3.Selection of the exact site.
• 4.Selection of the optimum site.
• The Weber’s theory of industrial location is based on the following basic
assumptions:The materials can be
1-Ubiquitous(being or seeming to be everywhere at the same time)

2-localized materials
3--weight – losing or gross materials
4- pure materials
Environmental Aspects in the Setting up of
Business Enterprises:-
Business environment is the sum of all external and internal factors that
impact a business and its operations. Internal factors are those
components that exist within the company and external factors are
outside causes that influence an organization's functioning. The
business environment indicates the totality of all the individuals,
resources, stakeholders, institutions, regulations and market forces that
subsist around the organization.
• Types Of Business Environments
• Understanding the types of business environments and their differentiating
factors can help an organisation understand their significance and manage their
complexities. Below are some common types of business environments with
examples of each:
• Internal business environment
• The internal business environment includes all those aspects and recognisable
factors that exist within an organisation or business. It includes underlying
components that characterise and have an influence on the organisation like the
work culture, human resources, management hierarchies, value systems, physical
assets, brand image, strategies and policies. Usually, the forces that exist within
the internal business environment are within the control of the organisation.
• Economic environment
• The economic environment is the culmination of all the economic factors within which
the organisation exists. It refers to all aspects of the local and global economies that may
have an impact on the business and its operations. Usually, these factors are beyond a
business's control. They may include economic conditions like per-capita income, the
country's economic policies, interest rates, inflation, currency exchange rates, taxes and
the purchasing power of consumers.
• Technological environment
• The technological environment refers to the technological factors that influence the
production of goods and services. It is usually all-pervading and can impact an
organisation's internal and external environments. The technological environment may
include aspects like scientific advancements, technology adoption, transfer of technology,
research and development, technology costs and the impact of technology on humans.
• Socio-cultural environment
• The socio-cultural environment refers to the societal and cultural factors that are characteristic of a
place. An organisation's socio-cultural environment includes the demographic attributes, values,
customs, beliefs, norms, life expectancy rate and social forces of the community in which it exists. As
social and cultural movements shape the market, they have a considerable influence on businesses
operating in that location.
• Competitive environment
• An organisation's competitive environment refers to competitive forces that affect the market and how
these changes can impact business. This may include large and small competitors whose dynamics can
impact a business favourably or otherwise. Usually, the competitive environment is subject to
statutory regulations.
• Example: A premier clothing brand is seeing a rise in fast-fashion trends, and its small competitors are
leveraging from replication and the production of high volumes of clothing made from low-quality
material. Noticing the competitive pricing, it decides to lower its premium prices. It also launches a
campaign that highlights the importance of sustainability and ethical fashion.
• Legal environment
• The legal environment that exists around a business includes statutory factors and legal
forces that may influence its operations. The legal environment provides the framework
for the business to operate through processes that facilitate and regulate its activities.
This includes laws put in place by the government, rules made by legal bodies,
regulations, clearances, provisions and contractual laws that relate to the business.
• Political environment
• The political environment consists of forces and activities that relate to governmental
and political bodies that may have an impact on businesses. Usually, the political
environment in which a business exists is interwoven with its social, economic and legal
environment. The political factors that can influence a business include political stability,
ideologies, governmental policies, lobbying, legislative processes, political structures and
attitudes towards the business community.
• Natural environment
• The natural environment in which a business exists includes ecological and
geographical factors that may influence its activities. Natural factors like geography,
climatic conditions, the availability of resources, air quality and environmental
regulations greatly affect the functioning of a business. It is a key macro aspect that
ultimately determines how the business interacts with inputs like raw materials and
if the output is conducive to its natural environment at large.
• Example: Developing countries that witness no drastic changes in weather and
relatively high temperatures usually encourage businesses to invest in solar
technologies to harness the energy of the sun. Businesses also take adequate
measures to ensure their agricultural activities do not get overly dependent on
water-intensive crops, such as sugarcane and paddy, as this could potentially
deplete the groundwater resources.
Incentives and subsidies by the Government
• To promote a vibrant business community and generate employment,
the Government of India provides a host of subsidies and incentives
for business. For any entrepreneur managing a startup or an
established business, it is important to know about these subsidies
and incentives – so that these subsidies are availed while incurring
capital expenditure to reduce capital cost, lessen interest burden and
achieve break-even faster.
• 1-Credit Linked Capital Subsidy Scheme (CLCSS)
• Many of the Small Scale Industries (SSI) in India continue to manufacture goods and
products with outdated technology and plant & machinery due to the lack of
awareness about access to capital, quality standards and modern technology.
However, the globalization and liberalization of the market, has necessitated
upgradation and modernization of equipment to ensure survival and growth of the
unit. Therefore in an effort to facilitate the technology upgradation of SSI in India,
the Ministry of Small Scale Industries is operating a scheme for technology
upgradation called the Credit Linked Capital Subsidy Scheme.
• The CLCSS provides 15% capital subsidy to SSI units on institutional finance availed
by them for the induction of well established and improved technology in many of
the sub-sectors/products approved under the scheme for a loan of upto Rs.1 crore.
• 2-Subsidy for Establishing Cold Chain
• A strong and dynamic food processing sector plays a vital role in the reduction in the wastage
of perishable agricultural produce, enhancing the shelf life of food products, enhancing the
income of farmers and creating surplus for the export of agro & processed foods. Therefore,
in an effort to develop a strong food processing industry, the Ministry of Food Processing
Industry provides a subsidy for establishing cold chain. The objective of this scheme is to
provide financial assistance for integrated cold chain and preservation infrastructure facilities
without any break from the farm gate to the consumer. It covers pre-cooling facilities at
production sites, reefer vans, mobile cooling units as well as value addition centres which
includes infrastructural facilities like processing/multi-line processing/collection centres, etc.
for horticulture, organic produce, marine, dairy, meat and poultry etc. Financial assistance
(grant-in-aid) of 50% the total cost of plant and machinery and technical civil works in general
areas and 75% for NE region including Sikkim and difficult areas (J&K, Himachal Pradesh and
Uttarakhand), subject to a maximum of Rs.10 crore is provided as financial ass under this
scheme.
3-Technology Upgradation Fund Scheme (TUFS) – Textile Sector
• The Textiles sector is the second largest provider of employment after agriculture. It
contributes about 14% to industrial production, 4% to the GDP, and 17% to the
country’s export earnings. It provides direct employment to over 35 million people,
which includes a substantial number of SC/ST, and women. Therefore, the Ministry
of Textiles through its flagship scheme, the Technology Upgradation Fund
Scheme(TUFS) has helped the industry scale new heights and improve technology
to match global standards. Under the TUFS Scheme, Interest Reimbursement of 5%
is provided on interest charged by the financial institutions or banks for textile
technology upgradation projects. In addition, the scheme also provides for margin
money and/or capital subsidy for investment in many types of textiles
manufacturing equipment like power looms, common effluent treatment plants,
garment machinery, machinery for technical textiles, handlooms, etc.,
4-Subsidy for Acquiring Quality Management System
• With a competitive global market, implementation of quality standard
has become mandatory for MSME units to successfully compete and
improve profitability by optimizing internal processes. Therefore, in an
effort to increase the adoption of quality standards by Indian MSME
units, the Government of India provides a subsidy, wherein the cost of
acquiring ISO Certifications like ISO-9000 and ISO-14001 is subsidized.
• The scheme provides for all units having an SSI Registration to have
reimbursement of charges of acquiring ISO-9000/ISO-14001 certifications
to the extent of 75% of the expenditure subject to a maximum of
Rs.75,000/- in each case
5-Capital Subsidy for Solar Lighting and Small Capacity PV Systems
• The Government of India has launched the Jawaharlal Nehru National Solar
Mission (JNNSM) to promote sustainable energy generation and support the
growing need for energy in India while addressing India’s energy security
challenge. The JNNSM provides a host of subsidies and soft loans for the
promotion and penetration of solar energy generation in the nation.
• Through the capital subsidy for solar lighting and small capacity PV systems,
the JNNSM provides capital subsidy of upto 40% of the approved unit cost
(benchmark cost) for solar lighting systems and small capacity Photovoltaic
systems. Capital subsidy of 90% of the benchmark cost, would be available for
special category states, viz. NE, Sikkim, J&K, Himachal Pradesh and
Uttarakhand
6-Support for International Patent Protection in Electronics & IT
• Department of Information Technology, MCIT, GOI has started a scheme to
provide financial support to SMEs and Technology Start-Up units for
international patent filing so as to encourage indigenous innovation and to
recognize the value and capabilities of global IP and capture growth
opportunities in the area of information technology and electronics.
• Through this scheme, all patent processing costs including Attorneys’ Fees,
Patent Office filing fees, Examination Fees, Patent Search cost, Additional cost
for entering National Phase upto grant/issue is subsidized. The scheme
provides reimbursement of upto 50% of the total patent cost. Support will be
limited to Rs.15 lakhs or 50% of the total expenses incurred on filing each
invention whichever is less.
Women Entrepreneurship.
• Women entrepreneurs may be defined as a woman or a group of women

who initiate, organise and run a business concern.
• With a vision to promote the sustainable development of women
entrepreneurs for balanced growth in the country, Startup India is committed
towards strengthening women entrepreneurship in India through initiatives,
schemes, creation of enabling networks and communities and activating
partnerships among diverse stakeholders in the startup ecosystem.
• Government of India – “A woman entrepreneur is defined as an enterprise
owned and controlled by a woman having a minimum financial interest of 51
percent of the capital and giving at least 51 percent of the employment
generated in the enterprise to women.”
• World over 1/3rd of the entrepreneurial ventures are run by woman entrepreneurs. Due to economic progress, better access to
education, urbanization, spread of liberal and democratic culture and recognition by society, there has been a spurt in woman
entrepreneurship in India. Special incentives and drives have been created in India to bolster the growth of women entrepreneurs.
Schemes like Startup India and Standup also make special case to promote entrepreneurial drive among women.
• Indian woman Entrepreneur, Kiran Muzumdar Shaw, Chairman and Managing Director of Biocon Limited, received various coveted
corporate award and civilian awards like Padma Shri (1989) and Padma Bhushan (2005) for her remarkable contribution to health and
medicine industry. Other famous Indian Women entrepreneurs include personalities like Vandana Luthra, Ekta Kapoor, Naina Lal
Kidwai and so on.
•
In modern days, particularly in India, there is a great need for women entrepreneurs. Several factors are responsible for compelling
the women members of the family to set up their own ventures.
• These factors are;
• I) Motivational factors or needs-1) Economic Necessity:2) Desire for High Achievement 3) Independence:
• 4) Government Encouragement
• 5) Education:
• Women have been taking up various kinds of technical, vocational, industrial, commercial and specialised education so as to qualify
themselves to be self-employed in some kind of trade, occupation, vocation or business. Facilities are also being provided to women
in areas where they can grow and blossom as persons in their own right. Women have proved in modern days that they are no less
than men in efficiency, hard work or intelligence or even they can surpass men in several fields
• 6) Model Role:
• Women, like men, are also desirous of contributing their might to the economic development of their
country. Similarly, our women in India would like to play a key role model. They have already entered
other fields like politics, education, social field, administration, etc. Now they have started entering the
business field where they can also show their importance as in other fields.
• 7) Family Occupation:
• Family occupation is an important factor motivating a woman member to participate in the family
business, along with her husband and other members of the family. There is a great need for women to
undertake economic activity or business of the family and support their families in family occupation or
family business so as to reduce the expenses of the family business and increase its income.
• 8) Employment Generation:
• Another influencing factor that motivates women to become entrepreneurs is the creation of
employment opportunities. Women entrepreneurs generally take up labour intensive small scale and
village industries or handicrafts and they have high potential in employment generation. Therefore, they
serve as a solution to the widespread problem of women unemployment to some extent.

PPT on Micro Small and Medium Business Enterprises

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PPT on Micro Small and Medium Business Enterprises

Uploaded by

Copyright:

Available Formats

MSMBE

• Micro, Small, Medium Enterprises (MSMEs) are entities that are

Size of the Enterprise Investment and Annual

Micro Investment less than Rs. 1 crore

Small Investment less than Rs. 10

Medium Investment less than Rs. 20

Training institutions Ayurvedic products

Importance of MSMEs For Economic

Garages for auto repair Coir Industry

X-Ray clinics Manufacture furniture and wood products

Tailoring units Poultry Farming

Equipment rental Bicycle parts sales and service

Photo labs Stationery Items

Repairs of agricultural machinery Call centres

Computer-based data processing businesses Rubber products

STD/ISD booths Service provider for IT-enabled service

Retail trading Testing Labs for industries

Laundry services Sales of auto parts components

Toughened Metallic Ware Sales of ceramics and glass products

Automotive Electronic Component products Retail and wholesale business

• Chemical and Chemical Products

• Mechanical Products, excluding Transport Equipment

• Ownership: They have a single owner. So it is also known as a sole

• Indian Cottage Industry Types

• Handloom Weaving: The production of textiles, sarees, and fabrics using

• Employment Generation: Cottage industries contribute significantly to rural

• #2 Low Demand for Handmade Goods

• Micro, Small and Medium Enterprises (MSMEs) form a crucial part of

• 96% of the industrial units belong to small companies in the Indian

• India has witnessed rapid growth in start-ups. According to the

• MSMEs are very essential as they create a lot of job opportunities at a

Sector Job Creation (in lakh)

States Employment Statistics

• Small businesses play a vital role in the economy. Think of the

• Role of Small Business in India

• Human Resource: The small businesses rank next to agriculture to employ in

• Increased Tax Revenue: The industries need to pay the required

• These are the problems faced by small businesses.

• SSI is one of the significant segments of the Indian economy, contributing

- Many consumers worldwide are increasingly conscious of sustainability. MSMEs can

- Adhering to international quality and safety standards is crucial for

• Quality control: It is important for businesses to conform to product

• Layout of facilities: This component ensures that the most optimal

• Operations management entails studying the use of raw materials and

• Business process improvements are methodologies in which a team

• Digital marketing offers many advantages over traditional advertising methods,

1-Ubiquitous(being or seeming to be everywhere at the same time)

• Women entrepreneurs may be defined as a woman or a group of women

You might also like