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