Starting Small Scale Industries

Since Small Scale Industries helps in generating employment, requires less finances, easy to start, less complicated to manage, government is helping young entrepreneurs so as to encourage them to establish their own enterprises. In addition to financial assistance, government is helping by giving financial, technical and managerial advice, imparting training; marketing assistance, providing build up sheds, and also helps in preparation of project reports.

Procedure to Start Small Scale Industry

Procedure to start small scale industries consists of following steps:

Selection of Industry

Selection of a suitable place for an industry is the key to success. Different factors for the selection of site are: availability of land, labor, raw materials, power transport, and nearness to the market.

For deciding a type of industry, aptitude and financial position and experience of the owner are considered. Type and size of the industry should be decided by the market study (i.e. nature and extent of consumers demand), quality and price of other products with which proposed item will be in competition. Demand and supply position of the product should also be studied before selecting the type of industry.

Owner should make himself conversant with all Acts, Rules and other literature which may help in setting up and running a small scale industry. A vast literature published by the Central and State Government is available for the help of interested persons. A large number of model schemes are also available with the Manager of Publications, Civil Lines, Delhi-6. These schemes provide guidance in different aspects including requirements of capital, machinery, material and labour etc.

Directorate of Industries and Civil Supplies also help in selecting the product for manufacturing. It also publishes the lists of products which have scope and which do not have scope. These lists are revised from time considering different factors changing with the development of small scale industry and demand.


Preparation of Scheme

After deciding the product to be manufactured and the place of industry, a detailed scheme is prepared. This scheme should include number of machines, their approximate cost, amount of raw materials and their cost, requirements of land and building, number of workers and their staff --- their salary and estimated production cost, expected profit, proposed factory layout and plant layout.

The pattern on which the scheme may be prepared is given ass under:

Pattern on which the Scheme may be prepared

Scheme for the manufacture of...

I. Introduction and Manufacturing process in Brief
II. Non-Recurring Expenditure

Market Survey

The aim of market survey is to find out all the relevant economic and social facts about the markets in which the manufacturers, goods will be sold. In market survey, investigation about the product demand, design and cost if production is made. An owner, always want that his money should be utilized to the best possible extent.

For this reason planners must survey the market conditions, where the customers are in need of that product, whether the demand is continuous or intermittent. The next important factor a planner should consider is to see that whether similar products are being produced by some other manufacturers or not and whether he will be able to complete them as regards quality and cost is concerned.

As size of industry is related with the consumption of product, therefore, this fact must be considered while deciding the capacity of plant and machinery.

The following points are of utmost importance while making market survey:

1. Demand for products in the product.
2. Selling method to be adopted.
3. Possible new markets for the products.
4. Comments on consumers for the product.
5. To see that whether existing size, quality and design suit the customers or not.

Industrial Areas

Industrial areas are developed to plan the development of industries in a systematic manner considering the adequate scope for future expansion. These are provided with facilities of loans electricity, water, drainages etc. Thus separate industrial areas are necessary to prevent the haphazard and unplanned growth of industry which may create social problems of congestion, slum and nuisance in future particularly in big cities and towns. In these industrial areas land is allotted on lease for a period of 99years, on applying to the District Industries Officer prescribed application form.

Industrial Estates

Small industries are generally private ownership or partnership concerns and it is not always possible for the owners to construct their own factory building. Therefore, to assist them and to promote the rapid development of small industries, these industrial estates are made in different industrial towns. These industrial estates provide suitable planned factory accommodation at convenient location with facilities water, electricity transport, post office; banks etc. by taking a factory building on rent in industrial estates, time and large money for constructing building can be saved.

For the allotment of the building (on lease basis or on hire-purchase basis or on rent basis) an application in the prescribed form should be submitted to the District Industries Officer. The application should be accompanied by the detailed scheme of the small industries proposed to be started together with the required money.

Next Chapters

Estimating Procedure
Difference between Estimating & Costing
Depreciation & Obsolescence
Material Cost Calculation
Calculating Labor Cost
Direct and Indirect Expenses
Component Cost
Machine Shop Estimating
Forging and Forging Types
Starting an Organization
Welding Cost Estimation
Jigs and Fixtures
Qualities of an Entrepreneur
Starting Small Scale Industries
Budget and Budgetary Control
Supply & Law of Supply
Exchange and Barter Exchange
Classification of Market
Money and Types of Money
Trade Cycle
Break Even Analysis
Financial Management

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