Small Scale Industry & Steps To Be Taken To Start A New Business

Small Scale Industry

An enterprise where the investment in plant machinery (original cost excluding land & building and the items specified by the ministry of small scale industries) is more than Rs. 25 lac but does not exceed Rs. 5 crore is known as small scale industry.

Reasons For The Growth Of SMEs In India

Government policies, and easy loan opportunities with low interest rate help these SMES in their growth Banking sector has also shown a keen interest in lending these enterprises. The sector has significantly contributed towards the domestic production as well as export earnings. Low investment is required to start and maintain these enterprises. The sector has contributed impressively towards job creation and increases the individual incomes.

Decisions To Become Entrepreneur

Curiosity

Good at reframing any situation

Problem friendliness

Entrepreneur

Not afraid of failures

Optimism

Enthusiasm

Steps To Be Taken To Start A New Business

Search of new ideas

Idea processing stage

Idea selection stage

Actual product development stage

Test marketing stage Production & commercialization stage

1. Search of New Ideas

An entrepreneur has to generate many business ideas in order to find a few good one. Idea search process: Idea generation: (It is known as seeding stage of the idea) Preparation: (In this a conscious search for knowledge related to the idea is made) Incubation: (This stage is fantasizing about the idea) Illumination: (In this feasibility of idea is recognized) Verification: (In this application or test of idea is performed)

2. Idea processing
It is screening stage which helps to select the good idea and drop the poor idea. It is very important at this stage because if the poor ideas are not filtered and sorted out they may cause a huge financial loss in the next stages. The ideas can be screened against rough estimates of following factors. Cost of manufacturing set up Cost of development Production cost Market size Cost of marketing and promotion

3. Idea selection
After the refining of new business idea the entrepreneur gets few selected ideas. These ideas should be further developed and refined. For this purpose the idea is studied further and more knowledge is gathered. Basically it is a concept testing stage where the product is presented to the target group in symbolic or physical form. After that the feedback is collected from them.

4. Actual product development stage

In this physical product is developed by using real material and real process.

5. Test marketing Stage

In this limited quantity of actual product is marketed into a controlled area. The results are gathered from the retailers, whole sellers, and other channels of distribution and from the customers also. On the basis of evaluation of these results the product is further recommended for commercial production.

6. Production & Commercialization Stage

In this stage actual marketing of the product is started. Following activities are there: Setting up channels of distribution Finalizing product packaging and price Advertising and sales promotion Final marketing of the product Ensuring coordination between production and sales deptt. Inspecting market at regular intervals.

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