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A

MINOR PROJECT REPORT

ON

“Study of Small business enterprises in gr. Noida” Sarthak business centreVs. Chandana Enterprises)”

Submitted for the partial fulfilment for the award of Post Graduate Diploma in Management

Submitted By:Abhishek kumar(2013002)

Amit Mishra(2013008)Ankur Mishra(2013014)

Chandraprakash(2013020)Harmandeep singh(2013026)

Megha Awasthi(2013032 )

Submitted To:Ms DEEPTI SINHA

(Asst. Professor & Project Guide)

APEEJAY INSTITUTE OF TECHNOLOGY-SCHOOL OF MANAGEMENT

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(2013-15)

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DECLARATION

We, the students of PGDM I year, II Trimester in Apeejay Institute of Technology-School of management hereby declare that we have completed the project report on “Study of Small business enterprises in gr. Noida (Sarthak business centre Vs. Chandana Enterprises)”, is our original and authentic work undertaken by us under the guidance of Ms Deepti Sinha (Asst. Professor) as per the requirement for the award of Post Graduate Diploma in management. The information given in this project is honest & original to the best of our knowledge.

RAJAT PANDEY(M2013015)

ABHAY PRATAP SINGH (M2013074)

SHYAM AGARWAL ()

SHIVANI CHAUHAN ()

VIBHOR VARSHNEY ()

SMARPREET MUKHERJEE ()

PRIYANKA SINGH ()

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CERTIFICATE

This is to certify that RAJAT PANDEY (M2013015), ABHAY PRATAP SINGH (M2013074), VIBHOR VARSHNEY (), SHIVANI CHAUHAN (), PRIYANKA SINGH (), SAMARPEET MUKHARJEE (), SHYAM AGARWAL () are students of PGDM 1st year batch of Apeejay Institute of Technology, School of Management, and Greater Noida has done the project on “Study of Small business enterprises in gr. Noida (Sarthak business centre Vs. Chandana Enterprises)”work under my supervision and guidance. I understand this project report is being submitted to Apeejay Institute of technology, Greater Noida for award of degree of PGDM. To the best of my knowledge, this report has not been submitted to any other University for award of any other degree.

During this period, I have found the performance of his work satisfactory.

Ms. Deepti sinha (Mentor)

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ACKNOWLEDGEMENT

I hereby take the opportunity to express my deep and profound gratitude to Ms Deepti sinha (supervisor) and of this project, without whose help my thesis would not have been a success, and we would also like to thanks both the owner of the shop Mr Vinod Divedi (Sarthak business Enterprises), Mr Anupam Debroy (Chandana enterprises),our respected Director sir,Registrar sir and faculty members and all my classmates without their support we would not be able to make our project.

Last but not the least, we would like to thank our parents for their support and help during the execution of the study.

All may not have been mentioned but none is forgotten.

RAJAT PANDEY (M2013050)

ABHAY PRATAP SINGH (M2013074)

SHYAM AGARWAL ()

SHIVANI CHAUHAN ()

VIBHOR VARSHNEY ()

SMARPREET MUKHERJEE ()

PRIYANKA SINGH ()

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CONTENTS OF RESEARCH

Pg.no.

Chapter1:- Introduction

Chapter2:-About the enterprises under study

Chapter3:- Approach & Objectives

Chapter4:-

Chapter6:-Conclusion and result of study

Chapter7:- Reference

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INTRODUCTION

The term ‘Small business Enterprise’ or Small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs) are companies whose personnel numbers fall below certain limits. The abbreviation "SME" is used in the European Union and by international organizations such as the World Bank, the United Nations and the World Trade Organization (WTO). Small enterprises outnumber large companies by a wide margin and also employ many more people. SMEs are also said to be responsible for driving innovation and competition in many economic sectors.(*1)

Small Scale Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking to be graded as Small Scale Industrial undertaking w.e.f. 21.12.1999

An industrial undertaking in which the investment in fixed assets in plant and machinery whether held on ownership terms on lease or on hire purchase does not exceed Rs 10 million.

(Subject to the condition that the unit is not owned, controlled or subsidiary of any other industrial undertaking)

Explanation: For the purpose of this note:-

(a) "Owned" shall have the meaning as derived from the definition of the expression "owner" specified in clause (1) of section 3 of the said Act;

(b) "Subsidiary" shall have the same meaning as in clause (47) of section 2, read with section 4, of the Companies Act, 1956 (1 of 1956);

(c) The expression "controlled by any other industrial undertaking" means as under:-

(i) Where two or more industrial undertakings are set up by the same person as a proprietor, each of such industrial undertakings shall be considered to be controlled by the other industrial undertaking or undertakings,

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(ii) where two or more industrial undertakings are set up as partnership firms under the Indian Partnership Act, 1932 (1 of 1932) and one or more partners are common partner or partners in such firms, each such undertaking shall be considered to be controlled by other undertaking or undertakings,

(iii) Where industrial undertakings are set up by companies under the Companies Act, 1956 (1 of 1956), an industrial undertaking shall be considered to be controlled by other industrial undertaking if:-

(a) The equity holding by other industrial undertaking in it exceeds twenty four per cent of its total equity; or

(b) the management control of an undertaking is passed on to the other industrial undertaking by way of the Managing Director of the first mentioned undertaking being also the Managing Director or Director in the other industrial undertaking or the majority of Directors on the Board of the first mentioned undertaking being the equity holders in the other industrial undertaking in terms of the provisions of the following items (a) and (b) of sub-clause (iv);

(iv) the extent of equity participation by other industrial undertaking or undertakings in the undertaking as per sub-clause (iii) above shall be worked out as follows:-

(a) The equity participation by other industrial undertaking shall include both foreign and domestic equity;

(b) equity participation by other industrial undertaking shall mean total equity held in an industrial undertaking by other industrial undertaking or undertakings, whether small scale or otherwise, put together as well as the equity held by persons who are Directors in any other industrial undertaking or undertakings even if the person concerned is a Director in other Industrial Undertaking or Undertakings;

(c) equity held by a person, having special technical qualification and experience, appointed as a Director in a small scale industrial undertaking, to the extent of qualification shares, if so provided in the Articles of Association, shall not be counted in computing the equity held by other industrial undertaking or undertakings even if the person concerned is a Director in other industrial undertakings or undertakings;

(v) where an industrial undertaking is a subsidiary of, or is owned or controlled by, any other industrial undertaking or undertakings in terms of sub-clauses (i);

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(ii); or (iii) and if the total investment in fixed assets in plant and machinery of the first mentioned industrial undertaking and the other industrial undertaking or undertakings clubbed together exceeds the limit of investment specified in paragraphs (1) or (2) of this notification as the case may be, none of these industrial undertakings shall be considered to be a small scale or ancillary industrial undertaking.

Note 2-

(a) In calculating the value of plant and machinery for the purposes of paragraphs (1) and (2) of this notification, the original price thereof, irrespective of whether the plant and machinery are new or second hand, shall be taken into account.

(b) In calculating the value of plant and machinery, the following shall be excluded, namely:-

(i) the cost of equipment’s such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores;

(ii) The cost of installation of plant and machinery;

(iii) The cost of research and development equipment and pollution control equipment;

(iv) The cost of generation sets and extra transformer installed by the undertaking as per the regulations of the State Electricity Board;

(v) The bank charges and service charges paid to the National Small Industries Corporation or the State Small Industries Corporation;

(vi) The cost involved in procurement or installation of cables, wiring, bus bars, electrical control panels (not those mounted on individual machines), oil circuit breakers or miniature circuit breakers which are necessarily to be used for providing electrical power to the plant and machinery or for safety measures;

(vii) The cost of gas producer plants;

(viii) Transportation charges (excluding of sales tax and excise) for indigenous machinery from the place of manufacturing to the site of the factory;

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(ix) Charges paid for technical know-how for erection of plant and machinery;

(x) Cost of such storage tanks which store raw materials, finished products only and are not linked with the manufacturing process; and

(xi) Cost of fire fightingequipment.

(c) In the case of imported machinery, the following shall be included in calculating the value, namely:-

(i) Import duty (excluding miscellaneous expenses as transportation from the port to the site of the factory, demurrage paid at the port);

(ii) The shipping charges;

(iii) Customs clearance charges; and

(iv) Sales tax.

Every industrial undertaking which has been issued a certificate of registration under section 10 of the said Act or a license under sections 11, 11A and 13 of the said Act by the Central Government and are covered by the provisions of paragraphs (1) and (2) above relating to the ancillary or small scale industrial undertaking, may be registered, at the discretion of the owner, as such, within a period of one hundred and eighty days from the date of publication of this notification in the Official Gazette.

Ancillary Industrial Undertakings

The following requirements are to be complied with by an industrial undertaking for being regarded as ancillary industrial undertaking: -

An industrial undertaking which is engaged or is proposed to be engaged in the manufacture or production of parts, components, sub-assemblies, tooling or intermediates, or the rendering of services and the undertaking supplies or renders or proposes to supply or render not less than 50 per cent of its production or services, as the case may be, to one or more other industrial undertakings and whose investment in fixed assets in plant and machinery whether held on ownership terms or on lease or on hire-purchase, does not exceed Rs 10 million.

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Tiny Enterprises

Investment limit in plant and machinery in respect of tiny enterprises is Rs 2.5 million irrespective of location of the unit.

Women Entrepreneurs

A Small Scale Industrial Unit/ Industry related service or business enterprise, managed by one or more women entrepreneurs in proprietary concerns, or in which she/ they individually or jointly have a share capital of not less than 51% as Partners/ Shareholders/ Directors of Private Limits Company/ Members of Cooperative Society.

Small Scale Service & Business (Industry related) Enterprises (SSSBEs)

SSSBEs industry related service/ business enterprises with investment upto Rs 500,000 in fixed assets, excluding land and building, are called Small Scale Service/ Business Enterprises (SSSBEs). This limit has been raised to Rs.1 million w.e.f. September 2000.

I. Illustrative list of recognised Small Scale (Industry-related) Service and Business Enterprises (SSSBEs)

II. Illustrative list of Activities not recognised as Small Scale (Industry-related) Service and Business Enterprises (SSSBEs)(*2)

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The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:

(a) Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

(i) A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;

(ii) A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and

(iii) A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.

In case of the above enterprises, investment in plant and machinery is the original cost excluding land and building and the items specified by the Ministry of Small Scale Industries vide its notification No.S.O.1722 (E) dated October 5, 2006.

(b) Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006 are specified below.

(i) A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;

(ii) A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore; and

(iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. What constitutes "small" in terms of government support and tax policy varies depending on the country and industry. Small businesses range from 15 employees under the Australian Fair Work Act 2009, 50 employees according to the definition used by the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs. However, in 2006 there were over 18,000 "small businesses" with over 500 employees that accounted

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for half of all the employees employed by all "small business". Small businesses can also be classified according to other methods such as sales, assets, or net profits.

Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing, and online businesses, such as web design and programming, etc.

AN OVERVIEW GROWTH AND SCOPE OF SMALL BUSINESS ENTERPRISE IN INDIA

India has got tremendous scope for investors and entrepreneurs as far as business opportunities are concerned. Especially India has always been in the limelight in terms SME business. By SME business, we mean small and medium enterprises that maintain revenues or a number of employees below a certain standard. Every country has its own definition of what is considered as a small and medium-sized enterprise. In India, an industrial undertaking that has investments in fixed assets which do not exceed more than Rs.10 million falls under the category of small business. A small-sized enterprise is a company with less than 50 employees while a medium-sized enterprise is one with fewer than 250 employees.

The SME business opportunity in India can be seen in possibly every sector - financial services, telecom, education, automobiles, media, food, real estate and so on. This makes India a hub for best small business opportunity in various segments. Thus, one who wishes to explore the business opportunity in India must have a look at the SME and retail business ideas to get an idea about the business scenario in India.

SME and Indian Economy

Small and medium sized enterprises play a central role in the Indian economy. They are a major source of entrepreneurial skills, innovation and employment. SME businesses are the biggest contributor to the economy of any country and the same goes with Indian economy. In fact, SME is one of the most crucial sectors of Indian economy as far as the number of employments generated from this segment. As more than 65% of Indian population lives in rural and semi-rural areas, small business becomes a major source of income for many residing in these areas. After

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agriculture, small business in India is the second largest employer of human resources.

New opportunities in SME business

The SME business market of India is large and bubbling with newer opportunities. Increased purchasing power and consumerism is what drives the business scenario in India. Thus, there is an opportunity for competitive advantage that can benefit investors and entrepreneurs to a large extent. An investment in any best small business opportunity promises lucrative returns and success in less time.

Reasons behind growth in SME business

There are various reasons due to which the small scale business in India has witnessed a spurt of growth. Some of these factors are:

• High contribution to domestic production

• Low investment requirements

• Significant export earnings

• Capacities to develop appropriate indigenous technology

• Operational flexibility

• Contribution towards defence’s production

• Technology - oriented industries

• Import substitution

• Location wise mobility

• Low intensive imports

• Competitiveness in the domestic market

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• Competitiveness in the export markets

The India small business opportunity is getting quite exciting and innovative with the passing of every year. There are a lot of retail business ideas for entrepreneurs who are interested to set up a SME business in India. However, investors planning to invest in this sector must ensure that they make a wide choice and use the resources available in the right way to reap the benefits.

THE IMPORTANCE OF SMALL MEDIUM ENTERPRISES

Most of the international economies depend basically on the role of SMEs in supporting the national economy in different countries. The Egyptian economy throughout history contained large number of small projects which constituted major element in that economy.

In general, the importance of the small projects can regarded to different reasons, including:

1- Their ability to use capital in relatively high productivity.

2- Being highly specialized makes them more able to produce a major reduction in production costs.

3- Their high ability of innovation.

4- The high skills that their labours should have.

In Egypt, SMEs historically played a relatively significant role in the process of economic development in Egypt:

1- First of all small projects are considered one of the balancing circles in the economic structures due to their flexibility and quick response to the changes in the local and international markets.

2- They contribute in the investment of local savings and capital, and because of that they help in activating the needed local investment.

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The small size of their investment helps in reducing the amount of losses and in directing the investments totally to production processes.

They participate in reducing the intense of poverty, and in increasing the standard of the living of these poor segments of the society mainly by providing job opportunities to poor and unskilled labours.

In addition, they help in generating extra income to those poor segments in the society when they own and operate very small enterprises.

Small projects also play effective role in the process of humane development as they

They are considered one of the major sources of real and permanent job opportunities, especially when put into consideration the fact that due to the expansion in the polices of market economy, the monopoly that many companies have enjoyed in the past are no longer suitable to the dynamics of the current markets, also governmental companies that absorbs large number of labours are no longer available, nothing is now called fixed lifetime job.

Small projects usually don’t allow the existence of labour force that isn't properly abused mainly because of the nature of their business and that has specific orientations.

Technically, SMEs constitutes one of the major mechanisms of technological development due to:

Their ability to modernize production processes quickly and with relatively low costs.

They also provide effective mechanism for working in integrated groups so as to achieve the maximum possible abuse of the available resources in every project; they also provide chances for integration with larger enterprises so as to promote their existence in technologically developed projects.

They contribute in activating the use of local materials and secondary products, and the process of recycling of production.

They also contribute in developing the usage of local technologies, and increasing their quality through contacting with external markets and quality terms.

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They also help in preserving the local identity as they adopt the industries and projects related to local environment and thus contributing in increasing the sense of belonging and the necessary awareness among people.

Another importance of the SMEs appears in the role that they play in the newly inhabited societies. One of the major developmental decisions which has recently took place, and which shall has great effect on the Egyptian economic, social and human development is the decision that the government took in Oct 1996 which include the increase of inhabited space in Egypt from 5, 5 to 25%, and naturally that process will depend largely on small projects, for the following reasons:

The plan includes the elimination of the overpopulation in large cities through many incentives which shall depend mainly on the individual initiatives through private investment in small projects or through working in them.

The expected small size of the markets of these new communities and their horizontal expansion make the small projects, with their high flexibility and low costs, more able to satisfy the gabs in the demand of goods and services in these communities.

The cultivation of lands and the provision of water resources plans in addition to the dictation of small farms to the youth indicate that the small agricultural and industrial enterprises can attract large number of people and encourage the internal immigration.

The next point in the importance of SMEs is their significant role in the large national plans:

They help in overcoming the problem of over population and the relative scarcity of resources by increasing the inhabited space which shall in turn change the nature of the economic and social formation in Egypt.

Their major role in finding home for the large national projects (Toshka project for example).

SMEs will enter relatively new activities in Egypt such as oil services, tourism and environment protection services especially in the new areas that need to be inhabited.

However, SMEs face major problems that constitute significant obstacles in their process of development.

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First, and most important, are the financial ones:

Most of the SMEs suffer from the limited resources needed for their development most probably because of the absence of effective financial institutions capable of providing the needed assistance to these enterprises .and that in turn limits the possibility of the emergence of new enterprises or the development of existed ones.

In Egypt, according to the 1997 statistics, 1, 8 billion Egyptian pounds has been given to these projects, which constitutes .76 % of the GDP in the same year. Most of that money has been dedicated to more than 40 programs fostered by different institutions. Closer view can show that there's a poor participation of the institutions that are supposed to have major role in the financing process, most importantly is the Economic Development Bank which contributes only by 15.7% of the total finance. Commercial banks as well have week participation which never exceeds 20% despite of the vital role they could perform in the facilitation of the financial assistance to these projects. And due to the relative weakness of the institutional capabilities in most of the nongovernmental organizations in Egypt, there's a high possibility that these organizations won't play an effective role in decreasing the existed financial gab.

The other obstacles that face the SMEs are technical ones:

Statistics show that the large number of labours in these projects can hardly read and write (46%), 28.8% are literate and 8.1 are university graduates. which indicate that these kind of projects don’t attract the bachelor degree holders and that justify the urgent need for incentive programs for the university graduates in order to increase their awareness about the profitability behind the free business.

In addition to that is the problem of the difficulty of obtaining the modern technology and the needed information about the market and consumers' desires.

The difficulty in obtaining the inputs of production with high quality especially imported inputs as the attainment of these inputs require the competition with export markets in addition to the competition with larger enterprises . Also the high custom tariffs imposed on these imported inputs plus the long bureaucratic procedures constitute one of the major problems that alter the needed development of SMEs.The difficulty in obtaining the appropriate location for these projects, which in turn leads to their isolation from the market and generates relatively high cost when marketing their products.

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LIMITATIONS OF SMALL BUSINESS

While the small entrepreneurs can set up a unit even with less capital, enjoy quick Returns and have the flexibility to handle the vagaries of the market, they have to

Face many problems like the following:

1. Paucity of Finance: The small entrepreneurs possess a weak financial structure and find it extremely difficult to obtain credit because of lack of collateral security. This acts as a big handicap, especially in the initial stages, in most of their operations like their ability to hire the best workers or to purchase the latest machinery and equipment or to acquire sophisticated Technology.

2. Poor availability of power and other infrastructure: Though infra- Structural bottlenecks are problems for big businesses too, yet they can overcome these problems to some extent because of their financial strength

E.g. generating their own power, or even influencing the government in framing its policies sometimes. The small entrepreneur on the other hand has to battle with them.

3. Obsolete Technology: Most small businesses use old technologies because they cannot afford better. As a result the quality of their goods is inferior and the cost of production is higher than in case of other big ventures. This has acted as a serious handicap especially after opening up of the economy when they have had to compete with imported goods.

4. Marketing Problems: The small entrepreneur cannot supply standardized goods of high quality and as a result cannot compete with products of large companies or MNCs. They usually do not have a brand name or loyalty, as there are hardly any funds for advertising or sales promotion. All these Increase their marketing woes.

5. Poor Managerial and Organizational Skills: usually the entrepreneur has to perform a multitude of diverse functions invariably without having any exposure to professional education or formal training.

The large sector on the other hand can hire the best qualified and trained people.

6. High Incidence of Sickness 7 out of 10 small businesses usually fall sick and die within 3to5 years. Main causes for this are a wrong choice of product,

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poormanagerial skills, lack of experience, and poorquality of products because of the use of old technologies, etc.

Apart from the above-mentioned problems the small entrepreneur has weak bargaining power to deal with suppliers and financial institutions, has to face bureaucratic red tapism and is unable to invest in R & D. After the opening up of the economy the small sector has been finding it extremely difficult to compete with the high quality goods available in the market.

HOW TO SET UP A SBE OR SME

The main steps involved in setting up a Micro, Small & Medium Enterprise are as below:-

(a) Project Selection

(b) Technology and Machinery

(c) Arranging Finance

(d) Unit Development

(e) Filing of Entrepreneurs’ Memorandum & Addresses of DICs

(f) Approvals

(g) Clearances

(h) Quality Certification

(A) PROJECT SELECTION

It all begins with an Idea the overriding reason for anyone to think of establishing a MSME unit can be summarised in one word - opportunity.An opportunity to provide a product or service, which can generate sufficient surplus. This is all the more true if one is a believer in the maxim, "Small is Beautiful".

However, ideas need to be filtered through a multi-layer sieve. This model is shown in the following flow:

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- Does the idea fire up your motivation? - Is it a viable business proposition in your area? - Does it match the needs of your clientele? - Check it out with basic market research - Test it out at market place - Consult with the experts - Look out for competition in the field - Is it a sunrise industry? - Your business opportunity - Project conceptualisationOnce the ideas are screened and a viable business opportunity emerges the project has to be conceptualised in all its dimensions. The 4 Ps of Project Conception is:

- PRODUCT (Shape, Size and Nature) - PROCESS (Technology to produce the product) - PLACE (Location of Plant) - PARTNER (Technological of Financial Collaborator)

(B) TECHNOLOGY AND MACHINERY

Process Selection

Choices of process technology emerge once the product is finalised. For some complex products, process know how has to be imported. In such cases agreements for technology transfer should be made with due care to safeguard interest. A lot of appropriate technology is being developed at CSIR and Defence Research Labs and some of this technology can now be bought. Indigenously developed process know-how has intrinsic benefits such as appropriateness and relative inexpensiveness. While checking out on a process technology, the following things need to be considered with utmost care:

Whether process requires very high level of skilled workers or complex machines?

Whether process requires large quantities of water and/or power?

- Whether any process or product patent needs to be honoured while utilising the selected process technology.

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- Any special pollution or environmental regulations.

- Finally, the appropriateness to the Indian environment and conditions. Machinery and equipment

One of the major deficiencies in the micro, small and medium enterprises scenario is the prevalence of out-dated production and management methods hindering the efficient operation of micro, small and medium-scale units. It was also found that the most important reason for the reluctance of the small industrialists to install modern machinery and equipment was the lack of investible funds. The main objective of National micro, small and medium enterprises (NMSME) is to provide machinery and equipment to small industrial units offering them long repayment period with moderate rate of interest

(C)ARRANGING FINANCE

No MSME unit can take off without monetary support. This need for finance can be classified into following types:

- Long and medium term loans

- Short term or working capital requirements

- Risk Capital

- Seed Capital/Marginal Money

- Bridge loans

Financial assistance in India for MSME units is available from a variety of institutions. The important ones are:

(i) Commercial/Regional Rural/Co-operative Banks.

(ii) SIDBI: Small Industries Development Bank of India (refinances and directs lending)

(iii) SFCs/SIDCs: State Financial Corporations (e.g. Delhi Financial Corporation)/State Industrial Development Corporations.

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Long and medium term loans are provided by SFCs, SIDBI and SIDCs. Banks also finance term loans. This type of financing is needed to fund purchase of land, construction of factory building/shed and for purchase of machinery and equipment. The short-term loans are required for working capital requirements, which fund the purchase of raw materials and consumables, payment of wages and other immediate manufacturing and administrative expenses. Such loans are generally available from commercial banks. The commercial banks also sanction composite loan comprising of working capital and term loan up to a loan limit of Rs.1 crore.

For loans from financial institutions and commercial banks a formal application needs to be made. The details of documentation that need to be provided with the loan application are indicated below:

- Documentation for Loan Application

- Balance Sheet and Profit Loss Statement for last three consecutive years of firms owned by promoters

- Income Tax Assessment Certificates of Partners/Directors

- Proof of Possession of Land/Building

- Architect’s estimate for construction cost

- Partnership deed/Memorandum and Articles of Associations of Company

- Project Report

- Budgetary Quotations of Plant and Machinery

A sanction or rejection letter is issued by bank after its assessment of the application. After receiving a sanction letter, applicants need to indicate in writing their acceptance of terms and conditions laid down by FI/Banks.

Subsequently, loan is disbursed according to the phased implementation of the project. In today’s environment there are other choices apart from commercial banks and Government owned financial institutions. These options include venture capital funds and non-government finance companies.

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(D) UNIT DEVELOPMENT

After deciding the issues of product and process, the next important question is where to set the unit up?

For many tiny units and service-based units, the home is perhaps the best starting point.Setting up an establishment is much more than putting a signboard up and waiting for customers to walk in. It requires negotiating a favourable plot or shed purchase, organising for proper construction of building, design of interiors and finding good deals for equipment and machinery.

Construction of Building

Once an industrial plot for the unit is secured, then the next job is that of finding a suitable architect. Design of factory building has to be in consonance with the type of industry and have an appropriate plant layout.An architect's estimate of building construction is essential for loan applications. Further, architect's certificate for money spent on building is needed for disbursement of loan.

Getting the Utility Connections

Among the utilities of prime importance are power and water. In many cases getting power connection causes delay in setting up of plant. Therefore it is imperative to commence work on these aspects with diligent follow up. Power connections are generally of either LT (Low Tension) or HT (High-tension) type. If connected load is up to 75 HP, LT connection is provided. For connected loads of 130 HP or higher only HT connection is provided. A formal application needs to be made in a specified form to the state electricity board. An electrical inspector is deputed for evaluation of application to factory site, after which the load is sanctioned. In areas of power shortage, it is advisable to augment the power supply with a captive generating set.Water connection is also obtained likewise by applying in advance in formal forms. The water supply can be augmented by installation of tube well.

Getting 3M's Right

Men

Projections for manpower and staffing are made in the project report. However it is necessary to time the induction of manpower in a planned manner. The engineers and operatives must be available before the installation of the machinery.

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Machinery

Choosing and ordering of right machinery is also of paramount importance. In many cases technology or process provides us with a specification which is not provided, and then an extensive techno-economic survey of machinery and equipment available must be carried out. International trade fairs and engineering fairs are good places to look at available options. The entrepreneur must also consult experts, dealers / suppliers as well as users, prior to making a selection of equipment and machinery. The advice of DIC, MSMEI and NSIC can also be sought.

Materials

Materials procurement and planning are critical to success, of a start-up with a MSME unit. Inventory management can lead to manageable cash flow situations; otherwise if too much is ordered too soon considerable amount of working capital gets locked up. On the other hand, non-availability may result in production hold-ups, and idle machine and manpower. For essential imported raw material whose lead-time is large proper planning is all the more essential.

(E)FILING OF ENTERPRENEURS MEMORANDOM

Section 8 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 provides for filing of memorandum by a Micro, Small or Medium Enterprise. Sub-section (2) of section 8 stipulates that the form of the Memorandum, the procedure of its filing and other matters incidental thereto shall be such as notified by the Central Government. The memorandum may be filed by all three categories of enterprises with the District Industries Centre in the jurisdiction of which the enterprise is (or, is proposed to be) located,

The procedure for filing it has been outlined in Schedule. II of the Notification for the format of EM,Download Registration Forms & Related Documents (Performa)

File Format for Entrepreneurs Memorandum

Features of the Scheme

The memorandum may be filed by all three categories of enterprises with the District Industries Centre in the jurisdiction of which the enterprise is (or, is proposed to be) located,

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The procedure for filing it has been outlined in Schedule. II of the Notification for the format of EM

Procedure for Filing Memoranda

Features of the present procedures are as follows:

Form of the Entrepreneurs Memorandum can be downloaded from the Internet, the address of which can be obtained from Directorate dealing with Micro, Small & Medium Enterprises of the State Governments/ UTs. Or the hard copies of the same can be obtained from the District Industries Centres. This form can also be downloaded from the SIDO website i.e. www.laghu-udyog.com or www.dcmsme.gov.in

Any person who intends to establish a micro or small enterprise, at his discretion; or a medium enterprise engaged in providing or rendering of services may, at his discretion or a medium enterprise engaged in the manufacture or production of goods shall file the Memorandum of Micro, Small or as the case may be, of Medium Enterprise with District Industries Centre of its area.

The District Industries Centre shall fill all the codes in the form of the Memorandum and issue an acknowledgement after allotting an EM number, date of issue and category of the unit within five days of the receipt of the form of Memorandum by post or same day, if the form of Memorandum is submitted in person as well as online.

Before issuing the acknowledgement, the District Industries Centers shall make sure that the form is complete in all respect and particularly the form is signed and is accompanied with an undertaking, which is a part of the form of Entrepreneurs Memorandum.

The District Industries Centre shall maintain record of all the Entrepreneurs Memorandum so filed in respect of micro and small enterprises and medium enterprises engaged in providing and rendering services. District Industries Centres shall forward a copy of the Entrepreneurs Memorandum so filed with EM number allotted to the Small Industries Service Institutes of their State/Jurisdiction.

The District Industries Centre shall maintain record of all the Entrepreneurs Memorandum so filed in respect of medium enterprises engaged in production/manufacturing of products and forward one copy each of the Entrepreneurs Memorandum with EM number allotted to Small Industries Service Institutes of their State/Jurisdiction and to Joint

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DevelopmentCommissioner (MSME Pol.) in the Office of the Development Commissioner (Small Scale Industries).

The form of Memorandum is in two parts. Any person who intends to establish a micro, small or medium enterprise engaged in providing or rendering of services may file or those who want to establish medium enterprise engaged in the production or manufacture of products shall file Part 1 of the Entrepreneurs Memorandum to District Industries Centre.

Once the above enterprises start production or start providing or rendering services, they should file Part II of the Entrepreneurs Memorandum to District Industries Centre.

In case of non-filing of Part II of the Entrepreneurs Memorandum within two years of the filing of Part I, the Memorandum (Part I) filed by the entrepreneur will become invalid.

In case of change in the investment in plant and machinery or in equipment, the enterprises who have already filed Entrepreneurs Memorandum should inform the District Industries Centre of the same in writing within one month of the change in investment.

In case of change of products and that of services or addition in products or services, the enterprises who have already filed Entrepreneurs Memorandum should inform the District Industries Centre of the same in writing within one month of the change.

The District Industries Centre shall, in addition of keeping a record, in writing, shall also maintain records electronically on computer. The following form basis of evaluation: The unit has obtained all necessary clearances whether statutory or administrative. E.g. drug license under drug control order, NOC from Pollution Control Board, if required etc. Unit does not violate any locational restrictions in force, at the time of evaluation. Value of plant and machinery is within prescribed limits. Unit is not owned, controlled or subsidiary of any other industrial undertaking as per notification.

(F)APPROVALS

Every SSI unit has to comply with various regulations in force. These include regulatory, taxation, environmental and certain product specific clearances. This section looks into the methodology of obtaining these approvals and clearances.

Exemption from Compulsory Licence

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Licensing in the Industries sector is governed by the licensing exemption notification issued by Govt. of India in July 25 1991 under the Industries (Development and Regulation) Act, 1951. In SSI, there are virtually no licensing restrictions. No industrial license is required except in case of 6 product groups included in compulsory licensing (these products groups mainly cover products that can only be made in large sector.)

But if a small-scale unit employs less than 50/100 workers with/without power then it would not require a license from the Govt. of India even for the 6 product groups covered in licensing under Schedule II of the notification.

Subject to this, an entrepreneur can set up a SSI unit anywhere in the country without any restriction. The units are, of course, subject to the locational/land use and zoning restrictions in force under the local laws.

(G)CLEARANCE

An entrepreneur has to obtain several clearances or permissions depending upon the nature of his unit and products manufactured.

Regulatory or Taxation Clearances

1. Registration under Sales Tax Act - Commercial Tax officer of area concerned

2. Registration under Central Excise Act - Collector of Central Excise or his nominee for area

3. Payment of Income Tax - ITO of the area concerned

4. Registration of Partnership deed - Inspector General of area concerned

5. Calibration of weights & measures - Weights and Measures Inspector of State

6. Power Connection - Designated Officer of State Electricity Board

7. Employee strength exceeding 10 with power connection or 20 without power - Chief Inspector of Factories

Environment& Pollution Related Clearances

The method of granting consent under water and air pollution to SSI units has been simplified. Except for 17 critically polluting sectors given below, in all other cases

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SSI units will merely have to file an application and obtain an acknowledgement which will serve the purpose of consent:-

1. Fertilizer (Nitrogen/Phosphate)

2. Sugar

3. Cement

4. Fermentation & Distillery

5. Aluminium

6. Petrochemicals

7. Thermal Power

8. Oil refinery

9. Sulphuric Acid

10. Tanneries

11. Copper smelter

12. Zinc smelter

13. Iron & Steel

14. Pulp & Paper

15. Dye and Dye intermediates

16. Pesticides manufacturing and formulation

17.Basic Drugs and Pharmaceuticals

Product Specific Clearances

1.Establishing a Printing Press - District Magistrate

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2. License for Cold Storage Construction - Designated Official in State

3. Pesticides - Central/State Agricultural Department - Ministry of Agriculture

4. Drugs and Pharmaceuticals - Drug license from State Drug Controller

5. Safety Matches/ Fireworks - License under Explosives Act from Directorate of Explosives, Nagpur

6. Household Electrical Appliances - License from Bureau of Indian Standards

7. Wood Working Industry within 8 km from forest - District Forest Officer

8. Milk Processing & Milk products manufacturing units - Approval under Milk and Milk Products Order from State Agricultural/ Food Processing Industries Department above a designated capacity.

(H)QUALITY CERTIFICATION

Quality certification has become extremely important in competitive markets and especially in gaining foothold in exports. To avail the certification of ISO-9000, a unit has to undertake significant costs; the small scale industries have been found wanting mainly on account of resource crunch to implement quality systems to obtain this certification. However, as a paradigm shift, SSI must make 'Quality' a way of life. It has been decided to push the quality up gradation programme in the SSI Sector in a big way.

A scheme has been launched to give financial incentive to those SSI units who acquire ISO-9000 certification, by reimbursing 75% of their costs of obtaining certification, subject to a maximum of Rs. 0.75 lacs per unit.

In order to promote modernisation and technology up gradation in SSI, the units are assisted in improving the quality of their products. A new scheme has been launched to assist SSI units in obtaining ISO-9000 or an equivalent international quality standard.

Subject to an upper ceiling of Rs. 075Lacs, each unit are given financial assistance equal to 75% of the costs incurred in acquiring the quality standard. The SSI units are also encouraged to participate in quality awareness and learning programmes organised specially for their benefit(*3)

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OBJECTIVES OF PROJECT

The main objective of this project is to compare the two shops so that their difference can be found out which is related to profit or loss, customer satisfaction, capital invested, loan taken and many other things which are essential to know for any marketing aspirants like MBA or PGDM in marketing.

Through this research we can also assess the customer preference their need wants and desire and of cause for P’s of marketing play very important role in it like product, price, place, Promotion, People,Process, and Physical Evidence.

SMALL BUSINESS ENTERPRISE UNDER STUDY

In this research report on “Comparison of two shops” we have taken two most popular and well known shops

(a) Sarthak business enterprises(b) Chandana enterprises

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Both these shop are situated in greater Noida from a long time and these shops are favourite among many entrepreneur and student of Greater Noida.

Both these shop deal with the business of photocopy and printing works. From this research we had find that which shops is more profitable, what are their level of investment, what are their number of employees and many other questions answer is asked from the owner and employees of the shop and on the basis of that answers we had make bar graph pie charts which is shown in chapter 4.

Our group members under this study are shown below:-

(1) Rajat pandey(2) Abhay Pratap Singh(3) Smarprit Mukherjee(4) Priyanka Singh(5) Shivani Chaudhary(6) Shyam Agarwal(7) Vibhor Varshney

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APPROACH TOWARDS STUDY

We have taken interview from both the owner of shop, and we asked interview questions from both owner and they had given answers with full cooperation following questions and their answers are as follows.

First we have visited Sarthak business enterprise and taken the interview of the owner of shop which is as follows.

(1) Who are the owners of the shop?(Answer)1) Name of the owner is Mr Vinod Divedi.

(2) When was the business set up?

(Answer) Business was set up around 4 years ago

(3) How did you get the idea to start this business?

(Answer) He get the idea to start his business by examining that greater Noida is a hub of education so that he that this business is appropriate.

(4) It is proprietary shop or partnership shop?

(Answer) It is a sole proprietorship shop.

(5)How did you arrange for the capital? Equity, debt, bank loan, other?

(Answer) He arranges self-financed capital.

(6) What is his annual income?

(Answer)His annual income around 5 lakh approx.

(7) Are your employees or staff satisfied with working for you?

(Answer) His employees are full satisfied from him.

8)Is the business done on purely cash basis or you allow creditors?

(Answer) His business is purely done on cash basis.

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9)Do you offer any kind of discount to your customers? If yes what is the usually basis for discount?

(Answer) He not offers any kind of discount but he offer fixed rate and minimised cost.

10)Are your customer satisfied with your -

- Pricing

- Work

- Behaviour of employees

- Discount?

(Answer)His customers are maximum satisfied from his service.

(11)How your business is going? Is it profitable or loss?

(Answer) His business is going profitable generally when customers and students are available but in holidays he suffers some loss in his income

(12)Whether the shop is owned or rented?

(Answer) His shop is rented

(13) Do you have any branch of your shop?

(Answer) He does not have any other branch.

(14) How is the boss of the shop?

(Answer) He is the boss of his shop

(15) Is he provide satisfy salary to his employee?

(Answer) He provide satisfied salary to his employees

16) What is the range of salary he provides to his shop?

(Answer) He provide salary to his employees near about 10 thousand

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Then we have taken the interview of owner of Chandana Enterprises

Following questions answer is given by owner of Chandana shop

(1) What is the name of the owner of Chandana Enterprises?

(Answer) Name of the owner of the shop is Anupam Debroy.

2) Whether the shop is rented or owned?

(Answer) His shop is rented.

(3) When his shop is set up?

(Answer) His shop is set up in 2002 march

(4) What is the life story of the owner?

(Answer) About his life

Basically he is service man he came from Orissa to Delhi in 1988, where he got a job of graphic designer, then he purchase a home in Noida and he regularly take up and down route between Delhi to Noida because of his home in Noida and he doing job in Delhi so he thought to start a business here in greater Noida so he can easily manage his home and his job, because he know the work of graphic designing and printing so he quit his job and set up a business enterprise named Sarthak business enterprises where he set up photocopy work in Jagat Pharm at that time there are very few shops in Jagat Pharm now he has one more shop which is an apparel shop named Chabbi.

(5) What is the opinion of the owner related to business?

(Answer) As per his opinion for business there is no need of money in very huge amount but small amount money with motivation al work is more valuable. And he also opined that business is fully depend on the customer anda owner should be good in behaviour with the customer always remember that today market is customer oriented and consumer is king of market

(6)Is he can easily get the loan for his business?

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(Answer) At first time bank not gave him loan but when he establish his business well and made goodwill of his shop in Jagat Pharm now opposite is happen now he can take loan very easily

(7) What is more important according to owner?

(Answer) Consumer satisfaction and his satisfaction with his work are more important than making more and more profit.

(8) How many projects he got in a day?

(Answer)When he started his photocopy business he got 3 projects in a day at that time he have no employee in his shop so his work is finished at late light 3 am

(9) How much he invested in his business?

(Answer) He invested 70000 rupees when he first set up his business

10) What is the main segment of customers in which his main focus?

(Answer) His main focus on college students at the start of his business time he fulfil his basic need by the income earned from college students.

11) How much he spent on maintenance of his machine?

(Answer)He spends 20000 rupees in maintenance of his photocopy machine every year.

(12) What is the view of owner related to industrial growth in Greater Noida?

(Answer) According to his views in greater Noida industrial growth is very low.

(13) What is cost of the assets premises in his business?

(Answer) His total assets cost is 35 lakh in which 10 lakh is worth of his shop.

(14) Whether he is a single owner of the shop or partnership?

(Answer) He is a single owner of his shop.

(15) How much loan he has taken for his business?

(Answer) Now a day he takes a loan of rupees 20 lakh

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(16) How much total salary he provided to his employee from the income of his business?

(Answer) He provides 45 thousand salaries to his employees.

(17) What is the range of salary he provides to his employees?

(Answer) Maximum salary of his employee is 10000 and minimum is 4500 rupees.

18) How many employee he has in his shop?

() He has 6 to 7 employees in his shop

(19) Does he have any employee from the start of his shop?

He hassome employee who was with him from 9 years when he establishes his business.

20) Whether his business in purely done on cash basis or credit and cash both?

(Answer) His business is done on both cash and credit basis.

(21) Where he get business for his shop?

(Answer)Basically, he got works from school, collages, industries etc.

(22)Do you offer any kind of discount to your customers? If yes what is the usually basis for discount?

(Answer) He provide discount at maximum no. of pages.

(23) What is more important for him in business?

(Answer) According to him customer satisfaction is more important and this will be gained on the basis of honesty hard work and give equal value to all.

(24) Now there are many photocopy shops in Jagat Pharm is it create loss for your business?

(Answer)Actually competition creates benefits for him.

(25)Do you have any branch of your shop?

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(Answer)He has no branches of his shop but he has one more shop which is an apparel shop.

(26) What he want to improve for his business?

(Answer) He wants to improve his team performance.

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FINDINGS OF THE STUDY

Following is the difference between two shops:BASIS SARTHAK BUSINESS

ENTERPRISESCHANDANA ENTERPRISES

Set up It was set up 4 yrs. ago It was set up 11 yrs. ago (2002)

Whether they are business man from the start of working

Owner of the shop is a business man from the start of his working

Owner of this shop is a service man previously he is a graphic designer in a company but he quit his job and establish his own business enterprise

Loan or self-finance This shop is establish by self-finance

Owner takes loan and self -finance also

Annual income 5 lakh approx. 6 to8 lakh

Rented or owned Rented Owned

Other branches No other branch No other branch but the owner has one apparel shop

Business done in cash or credit

Cash basis Cash or credit both

Total number of workers 5.workers 7 workers

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Maximum salary provided

Near about 10 thousand Maximum salary 10 thousand

Minimum salary provided to workers

5000 rupees 4500 rupees

Discount provided Fix rate and minimised Discount provided on number of pages

Present time loan No loan 20 lakh

Shop located In the basement of market in Jagat farm

On the main road of Jagat farm market

Work in the shop Internet café, photocopy, printout lamination

Photocopy, printing, lamination, project printing (Black and colour printing), project spiral binding.

Total assets valued 20 lakh 35 lakh

Machinery maintenance charge

15 to 25 thousands 20 to 30 thousands per annum

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TABLES AND GRAPHS

(1) Years ago set up

sarthak

business

enter

prises

chandan

a busin

ess en

terpris

es02468

1012

years ago set up

years ago set up

(2) No of workers

SARTH

AK BUSINESS

ENTE

RPRISES

CHANDANA ENTER

PRISES

02468

number of workers

number of workers

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(3) Minimum salary graph

sarthak

business

enter

prises

chandan

a enter

prises

42004400460048005000

minimum salary provided (Rs.)

minimum salary provided (Rs.)

(4) Total assets valued

Sarthak

business

enter

prises

chandan

a enter

prises

0

10

20

30

total assets value (in lakh Rs.)

total assets value (in lakh Rs.)

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(5) Maintenance cost

maintenance cost approx (Rs.)

Sarthak business en-terprisesChandana enterprises

CONCLUSION OF STUDY

After analysing the above study we concluded that both the shop (Sarthak business enterprises and Chandana enterprises) are very popular shop in Jagat farm market

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and famous among students and entrepreneur in greater Noida but we found many difference in these shops-

If we talk about which shop is more profitable then in that case Chandana Enterprises is the shop which earn more in comparison to Sarthak business enterprises reasons are the shop is on the main road of Jagat farm, they provide goods and services in both cash or credit, they maintain better customer relationship by providing them best service and having more work in the shop. Annual income of Sarthak shop is around 5 lakh while Chandana Shop income Shop is 6 to 8 lakh

Sarthak business enterprises are mostly deal in Internet Cafe, photocopy, lamination purpose while Chandana shop deals in printing, project designing, binding, colour printing, and all type of graphic and printing work.

Chandana enterprises get more work in comparison to Sarthak shop.

In the end of our words, we would like to share a perfect opinion which is delivered by Mr Anupam Debroy owner of Chandana enterprises shop “For any business it is important to satisfy the need and wants of their respective customer, provide them best service and maintain good customer’s relation and behaviour”

He also opined that business not need a huge amount of money investment if you have small amount of money you can also do business but you should have huge amount of motivation and dedication for your business actually he mean to say that that business can’t be made by investing a huge amount of money without motivation and dedication for that business, not only Dedication and Hard work maintaining good customer relation is also important.

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ANNEXTURE

*1 source- Wikipedia

*2 source- www.dcmsme.gov.in/ssiindia/def.htm

*3 source- www.dcmsme.gov.in