MODULE-1

UNIT: 1: Basic Concepts, classification and significance

Elective: Small Business Management PRADEEPA.M

Objectives of Small Business:

To generate immediate and large scale employment opportunities with relatively low investment.

To eradicate unemployment problem from the country.

To encourage dispersal of industries to all over the country covering small towns, villages and economically lagging regions.

Objectives of Small Business:

To bring backward areas too in the mainstream of national development. To ensure more equitable distribution of national income. To encourage effective mobilisation of countrys untapped capital and human resources. To improve the level of living of people in the country.

Objectives of Small Business:

To generate immediate and large scale employment opportunities with relatively low investment.

To eradicate unemployment problem from the country.

To encourage dispersal of industries to all over the country covering small towns, villages and economically lagging regions.

SMALL SCALE INDUSTRIES

Manufacturing
KHADI VILLAGE HANDLOOMS COIR INDUSTRIES SERICULTURE COTTAGE ARTISANS

MODREN
EXPORT ORIENTED UNITS ANCILLARIES TINY INDUSTRIES SMALL SCALE SERVICE ENTERPRISE WOMEN ENTREPRENUERS ENTERPRISES

Classification of industries
Micro Small and Medium Enterprise Development Act, 2006 passed
NOMENCLATURE For Manufacturing Concerns (Investment in Plant and Machinery) upto 25 Lacs 25 Lacs till 5 Crore 5 Crore till 10 Crore For Service Industry (Investment in Equipment)

Micro Enterprise Small Enterprise Medium Enterprise

Upto 10 Lacs 10 Lacs till 2 Crore 2 Crore till 5 Crore

As defined under Schedule 1 of Industries ( Development and Regulations ) Act, 1951

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Characteristics of Small Industries: i) Capital investment is small. ii) Generally engaged in the production of light consumer goods, processing etc. iii) Located in rural and semi-urban areas. iv) There is plethora of one-person firms. v) Virtually all these firms are privately owned and are organised as sole proprietorships. vi) Proprietor and family workers generally form the largest component of the small-industry labour force. vii) Hired workers are unorganised. viii) The average person does not work full-time in one activity over the entire year. ix) Fixed assets form the largest component of small units.

Characteristics of Small Industries: xi) Most of the funds come from the entrepreneurs savings. xii) The incidents of infant mortality are also highest. xiii) Most of the SSI, especially chemical units, have been polluting the environment. xiv) Exploitation of natural resources is another characteristics of small scale industries. xv) Human resources is exploited (child and women in particular) instead of developing it

Advantages of Small-Scale Enterprises: 1) Some SSIs do not require a high level of technology, 2) They are generally labour-intensive and do not require a large amount of capital. 3) Projects related to these industries can be undertaken in a short period and hence can increases production both in the short and the long run

Problems That Plague The SSI Sector 1) Problems In Production Machine breakdowns, poor maintenance, poor quality of machines. Poor quality of raw materials. Poor labour productivity. Power shortages. Lack of production planning and control. Delayed supplies from sub-contractors. Poor industrial relations.

Problems That Plague The SSI Sector 2) Problems In Marketing Competition. Recession. Low quality/technical incompetence. Irregular deliveries. Poor marketing efforts. Obsolescence. Government policies.

Problems That Plague The SSI Sector 3) Problems In Inputs Availability

National or regional shortage. High cost. Overdue payments. Poor quality. Uncertain supply. Lack of planning.

Problems That Plague The SSI Sector 4) Problems In Cost Of Production (Inputs)

Increased cost not recovered in selling prices due to faulty costing. Large order booked at fixed prices in an inflationary market. High material wastage. High inventory costs.

Problems That Plague The SSI Sector 5) Problems In Cost Of Production (Overheads)

Inefficient production. Large unutilized capacity. Heavy borrowings, higher interest charges. Increased administrative or selling costs. Unplanned capital expenditure. New product development or diversification without corresponding returns.

Problems That Plague The SSI Sector 6) Financial Problems Deliberate diversion of funds. Well intentioned but unwise diversion (e.g., unplanned diversification and current fund diversion) Poor collections. Unplanned payments to creditors. High inventory. Unproductive and flamboyant expenditure.

Problems That Plague The SSI Sector

7) Other problems

Delay in sanction of loan. Delay in disbursement of sanctioned loan. Delay in implementation of project on account of (a) and (b) above and also on account of a variety of reasons, for example, shortage of cement or steel. Escalation in the project cost and inability of the promoters to rise the required margin money for the escalated project costs; and in some cases, due to unsatisfactory appraisal of the promoters ability to rise his share of the project cost even though there was no escalation. Difference of opinion, among partners/directors. Strikes, lockouts, natural calamities. Changes in government policy. Power cut and power shortage. Delay in sanction of working capital limits by banks.

Economic Significance of MSME

Indian economy growth rates closing in on 8 per cent per annum. among the leaders in exiting the global recession. India represents 32.5 per cent of potential workforce in developing Asia MSMEs produce Rs20 lakh crore of goods and services contributing as much as 40% to Gross Domestic Product (GDP) of India

The MSME sector

accounts for about
45 per cent of manufacturing output, 95 per cent of the industrial units and 40 per cent of exports.

the sector provides

employment to almost 60 million people, (mostly in the rural areas of the country), making it the largest source of employment after the agriculture
sector.

KARNATAKA
EMERGING INDUSTRIAL CENTERS Karnataka, in addition to Bengaluru, has many more centers which are ideal for investment in Industry or Service or Business or Tourism Sectors. Some of the potential tier II and tier-III centers are; Mysore Mangalore Hubli -Dharwad Belgaum Tumkur Kolar Shimoga Hassan Raichur Gulburga

Advantage Shimoga
Salubrious climate, congenial environment, rich Malenadu culture, and good education facilities. Western ghats in the district offers potential for wild life tourism. Located 278 Kms north east of Bengaluru connected by National Highway 206. Also connected by broad gauge railway line. Airport is proposed at Shimoga.

Advantage Shimoga
Nearest Port - Mangalore ,at a distance of 186 kms connected by National Highway 13 and Broad gauge Rail, Karwar at a distance of 211 Kms Connected by National highway 206. 3 Industrial areas with 463 acres of developed land in the district developed by KIADB. 3 Industrial estates in district developed by KSSIDC. Special Economic Zone for Auto components is promoted by KIADB is coming up at Machanalahhi, 9 kms from Shimoga on Shimoga - Bengaluru National highway.

Advantage Shimoga
Availability of water in plenty and quality power. Availability of Skilled Manpower - 1 Engineering college, 1 Dental College, 8 Polytechnics and other colleges & technical Institutes. New Government Medical college Major Industries - Mysore Paper Mills, Vishweshwaraiah Iron and Steel Industries, Perfect Alloy Components, Shantala Ductile and Grayiron foundry pvt ltd, Pearlite Liners Pvt Ltd and other alloy, casting industries and auto component industries. Agri resources - Areca nut, Paddy, Sugar cane Great potential for areca nut based industries.

Present scenario: Shimoga

9779 no. of units with an investment of Rs.11715.90 lakhs, employing 41000 persons. Agro based industries and Automobile based industries and the Engineering based industries are the prominent ones in the district. The average investment per unit is about Rs.1.30 lakhs and the employment per unit on an average is 4 persons.

Present scenario: Shimoga

So far, the investment made is maximum under the food and beverages sector followed by the

general Engineering/mechanical products.

Likewise, the employment provided is also maximum from Food & Beverages sector followed by General Engineering/ mechanical sector. traditional carpentry, blacksmithy, leathercrafts, pottery, beekeeping, stone cutting, handlooms, agarabathi and sandal carving etc

WOMEN ENTREPRENUERS
"Women Entrepreneur" is a person who accepts challenging role to meet her personal needs and become economically independent. strong desire to do something positive is an inbuilt quality of entrepreneurial women Some serious constraints faced Lack of Confidence Socio- Cultural Barriers: Market-oriented risks Motivational factors Knowledge in Business Administration Identifying the available resource

WOMEN ENTREPRENUERS
. Earlier there were 3 Ks
Kitchen Kids Knitting Then came 3 Ps Powder Pappad Pickles At present there are 4 Es Electricity Electronics Energy Engineering

Some success stories will be discussed at the last Unit

Unit-2 Registration of SSIs

Benefits of Registering
Credit prescription (Priority sector lending), differential rates of interest etc. - Excise Exemption Scheme - Exemption under Direct Tax Laws. - Statutory support such as reservation and the Interest on Delayed Payments Act. Package of facilities and incentives development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support

 Provisional Registration Permanent Registration Procedure De-registration

THANK YOU!

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