Small enterprise as a seedbed of entrepreneurship Seedbed

Small enterprise as a seedbed of entrepreneurship Seedbed refers to preparation of soil for sowing of seeds for a good crop. As small scale industries provide conductive & favourable conditions for the emergence & growth of entrepreneurship hence it is treated as a seedbed for entrepreneurship.

• The government of India has also given an important place to small business in the framework of Indian economic planning for ideologically and economic reasons since after independence. As a result small scale industries have achieved an impressive growth in the number of units over the period of time. Small industries units need low capital investment and are labour intensive. more the small scale entrepreneurs develop more will be oppurtinies for entrepreneurial career

Importance of Small Scale Entreprise • • Generation of employment Self employment Lesser capital requirement Mobilisation of capital Mobilisation of entrepreneurial skill Equitable distribution of income Balanced regional development Saving in foreign exchange

• Quick investment • Beneficial to large scale industries • Other benefits

Problems of small enterprise • Marketing problems of small enterprise • 1. Poor product quality : - There are various reasons for low quality of goods • A) lack of quality consciousness • B) Dependence on manually operated machines • C) Lack of skilled workers • D) Insistence of buyers for low price • E) Lack of technical education

• 2) Poor sales promotion : The problem arises because the small entrepreneurs lack resources and awareness about the importance of such methods. • 3) Scale of production : scale of production os small entrepreneurs is low. They do not make full use of their plant and machinery under utilisation increases the cost of production the price of the product

• 4) Lack of knowledge of marketing : They also do not posses adequate and up to date market information. They are ignorant of competitive position , consumer choices and proper markets for their products. • 5) Lack of marketing opportunities : The low quality of products restricts the marketing opportunities • 6) Absence of suitable marketing channel

Production problems of small scale industries • • • Maintenance of delivery schedules Shortage of raw materials Ignorance of scientific methods of production Under utilisation of production capacities Import restriction Gestation period Diversification of the products Quality control Product cost Electricity

Problems related to finance • • • Requirement of capital and credit Problem of producing working capital Inappropriate financial structure Hurdles in getting loans sanctioned Prejudices of lending institutions Pattern of repayment of loan Structure of interest rate Wrong financial planning In proper utilisation of funds

Problems of human resources • Non availability of skilled manpower : An industry located in a backward area may get abundant supply of unskilled labour , but it is difficult to get skilled manpower • Labour problems : labour related problems are absenteeism , turnover , high wage rate , indiscipline , work stoppages, training cost and unionisation

Other problems • • • Technological changes Land building Infrastructural facilities Faulty planning Licence system Managerial inadequacies Analysis of business environment Machinery and other equipment Lack of technological upgradation