Problems and Growth

Patterns of small scale

business
What are Small Industries -
 Small scale industries are categorized into three parts:
Manufacturing/Production, Ancillary, and Service industries.

• Manufacturing Industries: Units that produce finished goods either for consumption or used in
processing industries. These types of small scale industries are generally individually owned.
Manufacturing small scale industries examples are power looms, engineering industries, food
processing, etc.
• Ancillary Industries: Big companies or MNC manufactures finished goods, but they don’t generally
make all the parts themselves. Vendors of these companies are ancillary industries. Ancillary
industries can also be identified as those companies which makes machines for multinational
companies or medium scale industries.
• Service Industries: Repair shops and maintenance industries comes under the category of service
industries.
Characteristics of Small Scale Industries

Labour
Flexibility
Intensive

Low
Localized investmen
t and
Operation higher
returns
 Role of Small Enterprises in Indian Economy

Employment Generation.
Use of Local resources.
Conservation of Foreign Exchange.
Equal distribution of income.
Supports agricultural and large scale industries.
Increase in Industrial output.
 Advantages Of Small Scale Industries

Close
Easier Management Nature of demand
Supervision

Lower influence of
Need of small capital
external economies

Direct Relationship between workers and employers

Disadvantages of Small Scale Industries

Lack of skilled Shortage of Difficulty in

labour capital getting loans

Improper
Lack of use of
division of
machinery
labour forces
Growth Patterns Of Small
Scale Industries
 Stages of Setting up an SSI

Project Identification.
Project Formulation.
Choice of ownership form.
Location and Layout.
Financing Scheme.
Project Report.
 Five Steps of Small Business Growth
STEP 1 - Existence
• Strategy:- Existence
• Management Style:- Direct Supervision
• Extent of formal systems:- Minimal to non-existent
• Key problems:-1. Getting customers
2.Delivering products.
STEP 2 – Survival
• Strategy:- Survival
• Management Style:- Supervised Supervision ( manager)
• Extent of formal Systems:- Minimal
• Key Problems:- Generate enough cash to break even
STEP 3 – Success
• Strategy:- 1. Maintaining profits.
2.Getting resources to grow.
• Management Style:- Functional (managers takes over all duties)
• Extent of formal systems:- 1.Basic financial marketing and production.
2. Continuous development to meet forthcoming need.
• Key Problems:- Expanding to keep company stable and profitable.

STEP 4 – Take-Off
• Strategy:- Growth(rapidly)
• Management Style:- Divisional.
• Extent of formal systems:- Maturing
• Key Problems:- How to rapidly and to finance the growth.
STAGE 5 – Resource Maturity
• Strategy:- Return on investment ( eliminating insufficiencies)
• Management Style:- Line and Staff
• Extent of formal systems:- Extensive.
• Key Concerns:- 1.Consolidate and control the finance.
2.Retain advantages of small size.
3. Expand managerial force.
4. Lack of innovation.
5. Avoidance of risks.
Basic idea about journey of small businesses
 Initiatives taken by the Government Growth
for SSI
 Credit Guarantee Scheme.
 Credit linked capital Subsidy Scheme.
 Rajiv Gandhi Udyami Mitra Yojana.
 Prime Minister Employment generation programme.
 Procurement Policy for small scale industries.
 Khadi Reform Development Program.
Small Business Problems Faced By Entrepreneurs

Lack of proper Getting Money Online

marketing customers manage. presence

Time Social media Absence of

management management Good Team
 Some Facts About Small Scale Industries In
India
• This Sector contributes around 8% of India’s GDP.
• It contributes 45% of manufactured output and 40% of its export.
• The small scale industry sector holds the key to economic prosperity of the
Indian economy, Characterized by abundant labour supply, unemployment,
scarcity of finance and growing modern large industries.
• 55% of small scale industries are located in rural area.
• More than 64% of Indian population works in small scale and medium scale
industries.
THANK
YOU
Presented By:- Nihar Shah 15649
Soham Kulkarni 15643
Sourabh Udalkar 15641
Yash Mahadik 15663