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Steps To Start SSI

The document outlines 13 steps to starting a small scale industry: 1) identifying a viable product or project, 2) selecting an ownership structure, and 3) choosing a suitable location based on factors like raw materials, markets, infrastructure, and climate. Key subsequent steps include: 4) preparing a detailed project report, 5) obtaining provisional registration, 6) arranging financing, 7) acquiring necessary licenses and clearances, 8) creating physical infrastructure like buildings and machinery, 9) recruiting staff, 10) procuring raw materials, 11) obtaining utility connections, 12) starting trial production, and 13) marketing the products.

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16K views3 pages

Steps To Start SSI

The document outlines 13 steps to starting a small scale industry: 1) identifying a viable product or project, 2) selecting an ownership structure, and 3) choosing a suitable location based on factors like raw materials, markets, infrastructure, and climate. Key subsequent steps include: 4) preparing a detailed project report, 5) obtaining provisional registration, 6) arranging financing, 7) acquiring necessary licenses and clearances, 8) creating physical infrastructure like buildings and machinery, 9) recruiting staff, 10) procuring raw materials, 11) obtaining utility connections, 12) starting trial production, and 13) marketing the products.

Uploaded by

Jeyarajasekar Ttr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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STEPS TO START A SMALL SCALE INDUSTRY

Before any steps are taken to start a small scale industry, the entrepreneur must familiarize
himself on the following aspects:
a) Priorities and policies of government.
b) Assistance, subsidies and facilities offered by various States.
c) Various organizations like KIADB, SIDBI etc., which help budding
entrepreneurs.
d) Government Incentives available for starting a new industry.
e) Licensing and registration requirements.
f) Policies and regulations concerning imports, exports, laws(legal and
industrial), taxes etc.

The main steps involved in the establishment of a small scale industry can now be listed as
follows:
1. Project/product identification
2. Selecting the form of ownership
3. Location of the unit
4. Preparation of Project Report
5. Registration of Project Report
6. Arrangement of finance- fixed and working
7. Procuring licenses and clearances
8. Creating physical infrastructure
9. Recruitment of staff
10. Procuring raw materials
11. Power connection and water supply
12. Starting production
13. Marketing the production

1. Project/product identification:
Project identification is the process of identifying broad areas where opportunities for new
business ventures exist. Product identification is the selection of the actual product to be
made and is the first major step in the setting up of a business enterprise. The following
points may be noted with respect to product identification.
(i) A new product idea can be pulled from a study of what people need or what
people love. This is known as Market-Pull.
(ii) A new product idea can also be pushed into the market with the help of R&D.
This is known as Technology-Push. Eg:- Plastic was invented and pushed into
market by Dupont Labs, USA.
(iii)Whatever is the product, one has to become aware of the following aspects with
respect to the product market potential (local and international), existing
competition, availability of raw material, technology, man power, future demand etc.

2. Selecting the form of Ownership: This is an important decision taken by the


entrepreneur. Some commonly chosen forms of ownership for SSI would be:
(i) Sole proprietorship
(ii) Family ownership
(iii) Partnership
(iv) Private Limited Company Each type of ownership has both short-term and long-
term advantages and disadvantages.

3. Location of unit: Factors which are normally considered while deciding the location of
the unit are:
(i) Proximity to the source of raw materials
(ii) Nearness to the market.
(iii) Availability of all kinds of manpower.
(iv) Infrastructure available with respect to factory sheds industrial estates,
transportation facility, availability of power, water, waste disposal, essential services
etc.
(v) General business climate of the region
(vi) Climate and environmental factors.

4. Preparation of Project Report:


A Project report is a written document pertaining to the investment proposal. It is basically a
document which explains the road map to reach the destination, as determined by the
entrepreneur. A typical project report should include the following information, as is made
mandatory by Planning Commission of India.

(i) General information about project


(ii) Preliminary analysis of alternatives
(iii) Project description
(iv) Technical feasibility
(v) Economic viability
(vi) Financial analysis
(vii) Marketing plan etc.

5. Registration of Project Report: The registration of small scale units is done in two
stages:
(i) Provisional registration
(ii) Permanent registration

Provisional registration is a temporary registration which is need at the planning stage in


order to bring the unit into existance. It is issued by the district unit of Directorate of
Industries. Provisional registration is given for one year initially and then extended by six
months (for valid reasons) for a maximum of four times. Permanent Registration is then
applied for when the entrepreneur is ready to commence commercial production.

6. Arrangement of finance Fixed and Working Arrangement of finance is required for 2


reasons fixed capital and working capital. Fixed capital is the finance required for setting
up infrastructure like land, buildings, machinery etc, This can be generated by
(i) Partnership
(ii) Bank loans
(iii) Venture capitalists
(iv) Personal savings Working capital which is necessary for buying raw
materials and recurring expenditure can also be raised by various sources.
7. Procuring licenses and clearances:
Depending on the product produced and the area where the unit is located, a number of
licenses and clearances are required to be produced. Some of them are from:
(i) Municipal authorities (if within city limits)
(ii) Chief Inspector of Factories (when employing more than 10 people)
(iii) Ministry of Agriculture (for food and vegetable processing)
(iv) State Drug Controller (for making drugs and cosmetics)
(v) Collector, Central Excise (Excise items like alcohol, cigarette etc.,)
(vi) Bureau of Indian Standards (for all measurements)
(vii) Company Law Board (for Reg. Of corporate body)
(viii)Pollution Control Board (for pollution control clearances)... and so on...

8. Creating Physical Infrastucture:


This is the toughest and most time consuming step involved in the opening of a new
business venture. If it is a manufacturing unit then it takes even more time and effort than if
it is a service unit. Creating physical infrastructure includes acquiring land and building,
selecting, buying and installation of machinery, and so on.

9. Recruitment of staff:
Manpower is the key to success of any organization. The right kind of staff right from
managerial level to worker level has to be recruited so that all types of work can be
accomplished.

10. Procuring Raw Materials:


Raw materials have to be procured in the right quantity, quality and delivery schedules. It is
advisable to have several sources of raw materials.

11. Power Connection and Water Supply:


There is an acute shortage of power and water supply in our country. Therefore application
for connection of power (HT or LT) have to be given well in advance. It is also advisable to
have alternate sources of power and water supply.

12. Starting Production:


After the basic trial runs, commercial production has to begin with proper quality checks in
place.

13. Marketing the product:


This is the last and the most important step in realizing the business ambition. No business
is complete without selling the products and ensuring that the revenue flows into the
organization.
____________________

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