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1 SME: Introduction
Small and medium enterprise or small and medium-sized enterprise (SMEs, small and medium-sized businesses, SMBs and variations thereof) are companies whose personnel numbers fall below certain limits. The abbreviation "SME" is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO). In most economies, smaller enterprises outnumber large companies by a wide margin. SMEs are said to be responsible for driving innovation and competition in many economic sectors. Global business trends indicate that small businesses are the major contributors to any countrys economy. In India, these businesses generate more than 65% employment across the country. Small Businesses are poised for much bigger things, and investors in this sector must ensure that they utilise all available resources to reap impressive benefits.
The Government of India has taken prominent steps to attract investments in the small business sector. At the same time, such businesses need the right advice and smart tips to go ahead and make gold of opportunities that come their way.
1.2 History
Small industry has been one of the major planks of Indias economic development strategy since independence. India accorded high priority to SMEs right from independence and pursued support policies to make these enterprises viable and vibrant and over time, these have become a major contributor to the GDP of the nation. Despite numerous protections and policy measures, SMEs remained mostly small, technologically backward and lacked competiveness.
The decade of 1990 was characterized by policy changes, nationally as well as internationally. These policy changes took place at the three levels global, national and sectoral, which had the major implication on the functioning of small industry of India as well as their performance. The policy marked: 1) the beginning of end of protective measures for small industry and 2) promotion of competitiveness by addressing the basic concerns of the sector; namely technology, finance and marketing. These resulted in the decline of number of items reserved exclusively for small industry, to be brought down from 842 in 1991 to 239 in 2007. These policy changes led to the radical change in the environment for the functioning of small industry.
In the recent past the SMEs have performed better than their larger counterpart. Between 2001 and 2006, net companies with the net-turnover of Rs 1 Crore 50 Crore had a higher growth rate of 701% as compared to 169% for large companies with turnover of over Rs. 1000 Crore. After a steep fall in the production between 1991 and 2000, there are has been a continuous growth in number of units, production, employment as well as the exports of the sector.
Today the scenario of Indian SMEs has changed completely. Some of the SMEs are acquiring companies abroad as part of the globalization process. The SME sector has transformed themselves to the need of large local manufacturers and suppliers to global manufacturers. SMEs have also started investing in R&D activities in order to compete in the global market.
SMEs now occupy a position of strategic importance in the Indian economic structure due to its
significant contribution in terms of output, exports and employment. The small scale industry accounts for over 40% of gross industrial value addition and over 50% of total manufacturing exports. Further, there are approximately 30 million SME units, that are spread all over the country and account for production of over 8000 different types of the products, right from very basic to highly sophisticated. They have also become the biggest employment generating engine in the country, providing employment to over 60 million and adding over 1.3 million jobs each year.
With the positive outlook of Indian economy, Indian SMEs plan to increase their capital expenditure and hire more staff in the coming months. To add to this there is an increasing number of SMEs that are eyeing offshore expansion for their businesses.
Research findings indicate that number of Indian SMEs conducing international business activities is expected to rise from 31% to 56% by 2013. The increase is driven by the domestic SMEs, 24% of which plan to go international by 2013. With the initiatives that are being taken by the government and other SME organizations, the future definitely looks bright for Indian SMEs.
Manufacturing Enterprises Investment in Plant & Machinery Description Micro Enterprises Small Enterprises INR upto Rs. 25Lakhs above Rs. 25 Lakhs & upto Rs. 5 Crores above Rs. 5 Crores & upto Rs. 10 Crores USD($) upto $ 62,500 above $ 62,500 & upto $ 1.25 million above $ 1.25 million & upto $ 2.5 million
Medium Enterprises
Service Enterprises Investment in Equipments Description Micro Enterprises Small Enterprises INR upto Rs. 10Lakhs above Rs. 10 Lakhs & upto Rs. 2 Crores above Rs. 2 Crores & upto Rs. 5 Crores USD($) upto $ 25,000 above $ 25,000 & upto $ 0.5 million above $ 0.5 million & upto $ 1.5 million
Medium Enterprises
1.4 Opportunities for Joint Venture and Investment with Indian SMEs
India is among the three most attractive FDI destinations in the world India has evolved as one of worlds leading technology centers India has highest return on foreign investment in the world By 2032, India will be among the three largest economies in the world India is a developed country as far as Intellectual Property is concerned The Indian market has two core advantages an increasing presence of multinationals and an upswing in the IT exports.
These factors indicate the current the outlook of the world economy towards the investments in India. The Government of India has always given top priority to the Indian SMEs, leading to their growth and have contributed heavily to the growth of the Indian economy. The government too has introduced incentives for the SMEs in order to make them competitive in the international markets. In order to enable SMEs get easy access to the finance, government has also introduced priority sector lending and has made mandatory on the domestic and foreign banks to lend 40% and 32% of their Net Bank Credit (NBC) to the SMEs. The opportunities exists for foreign SMEs looking to expand in the Indian market in the field of technology transfer, setting up the new business in the country, obtaining the sub-contracting rights, out-sourcing to their Indian partners etc.
Food Processing Agricultural Inputs Chemicals and Pharmaceuticals Engineering, Electrical and Electronics Textiles and Garments Leather and leather goods Bio-engineering Sports Goods Plastic products Computer Software
Your role: You are one of many working on a team at a large corporation. If you enjoy collaborating and relying on a group dynamic, then you will be productive on the job. Be aware of the ever-present diffusion of responsibility existing in the companies. Thats not my problem can only be used as a reason when many people are involved in the same project. Your future: On your very first day on the job, you will be handed a competitive network on a silver platter. You will have successful leaders in your field surrounding you during the workday. As far as moving forward, you will know the exact corporate ladder of your company. The vision of working your way up is clear and you know what you have to accomplish to get there.
Small Business: Structure: The structure of small business is often times a little more flexible than those of large corporations. Because the environment in a small business is ever-changing, your schedule may be also. You may have the opportunity to take longer lunches, work from home, or spend a little more time on balancing your personal life. For those who choose not to set a predetermined trajectory of a career path, the small business route gives you a little more wiggle-room. Your role: Rather than having a strict and straightforward title attached to many corporate workers, you may be expected to juggle many roles when you work for a small business. If you find a small business opportunity with a mission you are passionate about, you can be a driving force in the companys success and you have the ability to receive more responsibility sooner. Your future: In a small business, you are competing for a higher position with less people than Fortune 100 companies. You are in control of you own destiny in a small business and your voice will get heard, whether you like it or not. If you find the company you chose isnt for you, employers love seeing small business experience on a resume. A candidate with small business experience usually is more of a self-starter, company-focused and has ideas.
The difference between small and large scale enterprise can be seen in three categories viz. ~Number of employee ~Capital invested ~Asset availability
However small scale is a business enterprise which the minimum employee is 10 and maximum of 300 and which capital base is 200m excluding land and working capital. Anyone who has worked for both a large corporation and a small, entrepreneurial company can talk endlessly about the differences in the two cultures and mindsets. The 7 key differences between big and small companies when it comes to innovation are: Speed of decision-making Attitude toward risk Allocation of resources Who understands the business model and who manages it. Processes or lack thereof Following rules versus breaking rules Differing definitions of innovation
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the contract term and condition referencing the business policy the business policy definition the business policy command itself
The business policy definition may specify a set of parameters that are automatically fed into each invocation of any of commands associated with the policy. A business policy command may specify additional parameters when it is invoked. Finally, a contract term and condition may proved extra parameters for a business command unique to the term and condition. Business policy commands for the same type of business policy must have the same interface.
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tell all staff that discrimination and harassment will not be tolerated tell them disciplinary action will be taken tell them it applies to behaviour towards other staff and customers tell new staff it is a condition of employment keep a note of when all staff are told give them equal opportunity information brochures advise them to complain to you if discrimination or harassment happens follow your complaint procedure
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You can download sample policies and a code of conduct template below to use as a starting point. Adapt them to suit your business. Consider having your statements translated into other languages, if appropriate for your business.
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state why you support equal opportunity, listing the benefits to service and productivity state who the policy covers define direct and indirect discrimination, sexual harassment, bullying and victimisation and state that they are against the law
commit to not tolerating such behaviour in your workplace state staff and employer responsibilities and rights explain what to do if discrimination or harassment happens explain that people who breach the policy or the law will be disciplined explain the complaint procedure guarantee protection from victimisation state where people can get further help be supported and signed by the chief executive officer.
You can download a sample equal opportunity policy below to use as a starting point. Adapt the sample to suit your business. Also develop a complaint procedure so that everyone is clear about what happens if a problem arises.
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A code of conduct may also be useful. This outlines the conduct that is expected of everyone in your business. Very small businesses may be able to use a code of conduct rather than a policy. A sample code of conduct can be downloaded below. Introducing a policy is the first step. Then everyone needs to know about the policy and what it means for them.
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publish them on your website or intranet produce brochures for staff and customers periodically attach copies to pay slips or email them to staff display them on notice boards include them in company manuals, business plans and performance appraisals discuss them at staff meetings give them to new staff and get an acknowledgement signature make someone responsible for updating and circulating your policies regularly.
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The mission of the business is the most obvious purposewhich may be, for example, to make soap.
The vision of the business reflects its aspirations and specifies its intended direction or future destination.
The objectives of the business refers to the ends or activity at which a certain task is aimed.
The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the managers' decision-making. It must be flexible and easily interpreted and understood by all employees.
The business's strategy refers to the coordinated plan of action that it is going to take, as well as the resources that it will use, to realize its vision and long-term objectives. It is a guideline to managers, stipulating how they ought to allocate and utilize the factors of production to the business's advantage. Initially, it could help the managers decide on what type of business they want to form.
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All policies and strategies must be discussed with all managerial personnel and staff. Managers must understand where and how they can implement their policies and strategies.
A plan of action must be devised for each department. Policies and strategies must be reviewed regularly. Contingency plans must be devised in case the environment changes. Assessments of progress ought to be carried out regularly by top-level managers. A good environment and team spirit is required within the business. The missions, objectives, strengths and weaknesses of each department must be analysed to determine their roles in achieving the business's mission.
The forecasting method develops a reliable picture of the business's future environment. A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.
All policies must be discussed with all managerial personnel and staff that is required in the execution of any departmental policy.
Organizational change is strategically achieved through the implementation of the eightstep plan of action established by John P. Kotter: Increase urgency, get the vision right, communicate the buy-in, empower action, create short-term wins, don't let up, and make change stick.
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They give mid and lower-level managers a good idea of the future plans for each department in an organization.
A framework is created whereby plans and decisions are made. Mid and lower-level management may add their own plans to the business's strategies.
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5. Company Profile
5.1 About Us
Being process driven and understanding the importance of measurability helps us meet the communication objectives with the right set of ideas every time.
5. 2 Services
Identity Design Brand and Communication Strategy Packaging Design Retail Branding and Deployment Web and Multimedia Activation and Events Films and AVs
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