1.

1 Introduction to Small Scale Industry

The Ministry of Micro, Small and Medium Enterprises (MSME) is a part of The
Government of India that administers and formulates rules and regulation for pertaining to
small, micro and medium scale industries in India. According to MSME, a small-scale
enterprise is an enterprise where the investment in plant and machinery is more than Rs.25
lakhs but does not exceed Rs.5 crore in manufacturing sector. Small scale industries (SSI)
generally require few people for the functioning of the enterprise. SSI are usually labour
intensive.

In developing countries like India, Small Scale Industries constitutes an important and
crucial segment of the industrial sector. They play an important role in employment creation,
resource utilization and income generation and help promote changes in a gradual manner In
India, where is abundance of labour but scarcity of capital, SSI play a vital role in the growth
of economy. They have an edge over other firms as they can choose to provide personalised
service and have the advantage of adapting to the changing economy. They play a vital role
in industrialisation as they provide large scale employment and ensure equitable distribution
of national income and help in mobilisation of resources.

Small industry plays a very important role in widening the base of entrepreneurship.
The development of small industries offers an easy and effective means of achieving broad
based ownership of industry, the diffusion of enterprise and initiative in the industrial field. A
few advantages of SSI are that they do not require high technology. The projects are
undertaken in a short period of time but increase production in the long run. SSI act as a base
ground for local entrepreneurs to grow. They bring integration to rural economy. They meet a
part of the increased demand for consumer goods. SSI is ideally suited to build on the
strengths of our traditional skills and knowledge, by infusion of technologies, capital and
innovative marketing practices.

Small scale sector plays a significant role in elimination of rural backwardness in the
economy. SSI encourage self-reliance and reduces regional imbalances and disparities in
income and wealth. They ensure optimum utilisation of resources. They provide substitutes
for products that are being imported into the country. The growth in the manufacturing and
the industry sector as a whole instils confidence in the resilience of the small-scale sector.

The vision of small-scale industries is usually to conduct businesses honestly and

adhere to the value system and culture of the enterprise. They strive to innovate and update
technology. The value chain should be redefined with the customer’s core needs. They
inculcate skills and discipline on a regular basis.

Some of the major benefits under the Small-Scale Industries Schemes and benefits are
namely, Cheap Banking Finance, under the government’s Focus Scheme, SSIs can be funded
by 50% for buying machines, Duty Drawbacks, exempt from Sales Tax, exempt from Excise
Duty and lastly it is easier to get licenses and permissions. The Small-Scale Sector thus has
immense potential and latent opportunities present both for entrepreneurs as well as for the
economy of a country.

1.2 Introduction to the Han Industry

“Golden Fibre” is a term that is used for Jute. This fabric is usually yellowish brown,
natural vegetable fibre, shiny. It is produced from the stem of a plant names Genus
Corchorus. The jute fibre occupies a place next to cotton. It is mainly used for agricultural
bulk packaging due to its inherent high tensile strength, modest moisture, retention, etc. They
aim to help the environment by encouraging more people all over the world to use earth-
friendly bags. Jute is the second to cotton in terms of amount of these bags being produced
and is also one of the most affordable fibres, naturally. The life time of the bag could be
somewhere around 3-5 years. They help in reducing the use of wasteful and mostly unnatural
materials.

Jute is biodegradable, recyclable and thus it stays environment friendly. Jute is a rainy
season crop, usually sown from March to May according to rainfall and type of land and
harvested from the months June to September depending on the weather. The production of
this material is usually in humid heat, preferably in West Bengal.

Jute plants are ready for harvesting about roughly four months after sowing. The
plants range from 8 to 12 feet high, are cut using sickles close to the ground, normally after
these plants have shed their leaves. The jute fibre is in the outer layer of the stem, amidst the
wood on the inner side and the cortex fibre outside which are all surrounded by the soft
tissue. These results are softened with the results that this fibre can be separated readily in the
process of stripping.

Sangeetha Bag was established about 27 years ago by Mr. K.C Job and is one of
South India’s first ever Eco-friendly jute bag manufacturing company. This firm has
immensely grown over the decades that’s past and has taken a unique name in the field of
manufacturing and exporting of the world’s most everlasting eco-friendly bags possible.

1.3 Entrepreneurs Profile

1. Name: Chitra Javvaji

Age: 19

Gender: Female

DOB: 11th July, 2000

Native: Hyderabad

University: Christ (Deemed to be University)

Skills: Good listener, Time management, Multi-tasking, Patient

Interests: Books, Music, Food, Animals

2. Name: Snigdha Malladi

Age: 19

Gender: Female

DOB: 22nd February, 2000

Native: Hyderabad

University: Christ (Deemed to be University)

Skills: Communication, Problem Solving, Time management

Interests: Movies, Music, Travel.

3. Name: Rahul Sai Chandra

Age: 19

Gender: Male

DOB: 12th January, 2000

 Native: Bangalore

University: Christ (Deemed to be University)

Skills: Patient, Good listener, Creative, Self confidence

Interests: Cooking, Music, Dance, Movies, Animals

1.4 Partnership Deed

1. Chitra Javvaji daughter of Sreenivas Javvaji, resident of Hyderabad (hereinafter referred to
as the First Party/First Partner, which expression shall include her heirs, executors, legal
representatives, administrators and assignees) of the one part
AND

2. Snigdha Malladi daughter of Priyaram Malladi, resident of Hyderabad (hereinafter

referred to as the Second Party/Second Partner/Third Partner, which expression shall include
her heirs, executors, legal representatives, administrators and assignees) of the Other Part.

AND

3. Rahul Sai Chandra son of Uthra Rajiv, resident of Bangalore (hereinafter referred to as the
Third Party/Third Partner, which expression shall include his heirs, executors, legal
representatives, administrators and assignees) of the Other Part.
Whereas, the parties referred hereinabove wants to carry on a partnership business of Jute
bags, Under the name and style of ‘----------’ in Bangalore .Under the following terms and
conditions set forth herein below :

1. That the name and style of the Partnership venture shall be -------- .
2. That the partnership shall be at will.
3. That the business of Partnership shall be carried out at Bengaluru as agreed upon by
both the partners.
4. That the capital of the firm shall be contributed by the partners to this deed or raised
through the loan as agreed upon by all the parties.
5. That the share of the profit and loss of the partnership shall be as follows :-
a. 33.34%
b. 33.33 %
c. 33.33%
6. That all the partners shall operate upon the business account of the firm.
7. That the account of the firm shall be closed on 31st of March every year. Immediately
after signing the accounts each partner shall be entitled to draw out and receive his share of
profit and loss of the business for that year.
8. That if any partner opts to retire from the partnership business he may give one month
notice thereof in writing to the other partners. The account of the outgoing partner shall be
settled as per the terms and conditions of this deed and the amount of profit and loss shall be
paid to him within the period of 6 months from the date of retirement.
9. That such outgoing partner shall not use the name of the firm and shall not solicit any
of the customers of the partnership nor carry on any such type of business similar to that the
partnership within the period of 3 years.
10. That if any dispute arising out of this partnership business shall be decided by
Arbitration under the Indian Arbitration Act.
In witness whereof both the partners have set their hands on this Partnership Deed at on this
day, month and year first mentioned above in the Presence of marginal witness.

First Party/First Partner

Second Party/Second Partner

Third Party/ Third Partner

WITNESSES:

1.

2.
1.5 Approximate Investment

The approximate initial investment for the start-up is amounted to Rs 3,00,000, which consists
of the cost of Raw materials, cost of stitching equipment, hiring cost of employees, license fees
and other nominal fixed investments.

The initial investment also includes expenditure such as expenses on marketing strategies,
investment on equipment, rent of building, procurement of business licenses and permits, repair
charges etc. The total investment of Rs 3,00,000 is brought in by all the three partners equally.
2.1 Executive Plan
We decided to name our company ‘-------’ because our main motive is to be environmentally
friendly and help as many people as possible. We at --------- focus on bulk orders and our
target customers are event management companies.
India is a culturally diverse country. Functions, Parties and Weddings are almost a daily
occurrence. Return gifts are a major part of any Indian gathering and hence we are targeting
event management companies. The bags are customisable (with reference to size, colour and
design)
With reference to the market survey done, Bangalore is the best place to start this business as
it is a state with people from all over the country and there will be more requirements with
respect to Return Gifts because studies show that there are at least 25 functions/weddings that
happen all over Bangalore every day.
Our main mode of marketing and promotions will be Online because it has a wider reach.

2.2 Purpose of selection of Business

Apart from earning profits, we wanted to do something for the society, give back what we
have taken so far. Jute is environmentally friendly and easy to procure. These bags will be
hand stitched by the wives of farmers in the rural areas so as to provide them employment
and some extra financial support.
With relatively lower investment and operation costs, setting up a jute bags business is
cheaper and faster.
This business is our contribution towards environmental protection and employment
generation.