Role of supoort Institutions & Management of Small Business UNIT IV

Notes of Role of supoort Institutions & Management of Small Business as Taught in Business Intelligence and Entrepreneurship in Engineering , Business and other courses

1. Unit IV Role Of Support Institutions and
Management of Small Business
Directorate of Industries
The Small Scale industries & Export Promotion department holds the key towards
economic development of the state. State Government has been devoting
considerable attention
to the growth of industry by creating necessary infrastructure to ensure sustained
industrialization.
Objectives
Generate gainful/meaningful employment
To provide training to entrepreneurs
To develop industrial data base in all major fields
To provide support for trade information's & fairs
To provide quality support testing, patents, copyrights
Information & support system
To assist craftsman by adequate industrial & social database and marketing support
by Urban meats virtual sites etc
Promote & Assist Export from the State.
DIC (District Industries Centre)

industries.This is called "District Industries Centre"
The DIC have undertaken various programmes for investment promotion at the
grassroot level  such as a organizing seminars workshops, extending support
for trade fairs and exhibitions organized by various Industries associations.
The Centre has a separate wing to look-after the special needs of cottage and
house-hold industries as district from small industries.
Administration
General Manager is the head of the District Industries Centre
The post of General Manager is of Joint / Deputy Commissioner level
The General Manager has senior o�cers to assist him, such as
Manager (Raw Material),
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2. Manager(Credit),
Manage (Economic Investigation),
Manager(Marketing)
Industrial Promotion O�cer(IPO) and
Technical O�cer cum Project Manager (PM)
Monitoring of DICs
The functioning of DICs and their achievement is monitored by
Industries Commissioner
Meeting of General Managers are organized frequently to evaluate the performance
and also help in resolving di�culties in implementation of di�erent schemes.
To resolve the problems of industries/industrialists, there are two types of committee
at the district level:
District Industrial Executive Committee (DIEC)
DIEC is constituted for solving industry related problems And
promoting industrial growth
District Collector is the Chairman of this Committee and General Manager of
DIC is the Member Secretary
The other members of the DIEC are President of District Panchayat, DDO, MP,
MLAs, Prominent persons active in Industries in the district and members of all
district level industries associations.
Single Window Industrial Follow up Team (SWIFT)
Entrepreneurs face many di�culties when they start new industries. They have to
deal with many government agencies and get many clearances. SWIFT helps them in
guiding solving their problems at a single spot.
This committee is working under the District Collector, General Manager of
DIC is the Member Secretar
General Manager of DIC is the Member Secretary
District Development O�cer is Vice President of SWIFT
All industries related o�cers in the district are members of this committee.
Small Industries Development Organization (SIDO)
The SIDO is the national SSI Development Agency of India.
It is a major constituent of the Ministry of Small Scale Industries of the
Government of India.
A senior o�cial of the Government of India, who is designated as the Development
Commissioner for Small Scale Industries (DCSSI), heads SIDO.He is also the ex-
o�cio Additional Secretary in the Ministry of Small Scale Industries; that is, he is
second in command in the bureaucratic hierarchy of the Ministry.
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3. Set up in 1954, SIDO provides services to small industry throughout the
country by implementing a broad program of activities and services
including the following:
Entrepreneurship Development
Tool Room Services
Testing Centres
Extension Services
R&D Services
Consultancy Services
Policy Development
SIDO partners and networks with other national providers of support and financial
services to SMEs such as the Small Industries Development Bank of India (SIDBI), the
National Small Industries Corporation (NSIC), the Bureau of Indian Standards (BIS),
the Reserve Bank of India (RBI) (India's Central Bank) and relevant agencies of the
Governments of the 28 States of the country.
Various Services provided by SIDO to the SMEs:-
facilities for testing, tool-menting, training for entrepreneurship
development
preparation of project and product profiles
technical and managerial consultancy
assistance for exports
pollution and energy audits
Functions
assist and encourage entrepreneurs to set up industrial unit
estimate the requirements of raw materials of SSI units and to arrange their
supplies.
Training in Technical grades ,Management , SIDO o�cers.
SIDO keeps its o�cers trained the latest developments in their
respective fields of specialization.
Small Industries Development Bank of India (SIDBI)
Small Industries Development Bank of India (SIDBI), set up on April 2, 1990 under an
Act of Indian Parliament, is the Principal Financial Institution for the Promotion,
Financing and Development of the Micro, Small and Medium Enterprise (MSME)
sector and for Co- ordination of the functions of the institutions engaged in similar
activities.
The business domain of SIDBI consists of Micro, Small and Medium Enterprises
(MSMEs), which contribute significantly to the national economy in terms of
production, employment and exports.
MSME sector is an important pillar of Indian economy as it contributes greatly to the
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4. growth of Indian economy with a vast network of around 3 crore units, creating
employment of about 7 crore, manufacturing more than 6,000 products, contributing
about 45% to manufacturing output and about 40% of exports, directly and

transport, health care, tourism sectors etc.
Objective
Financing
Promotion
Development
Co-ordination
Functions
Provides foreign currency loans to
     Import equipment's by existing export oriented SSIs and new units
having plans for entering
Execute confirmed export orders by way of pre-shipment
credit/letter of credit and provides post shipment facilities. export markets
SIDBI’s Venture Capital Fund provide assistance to:
Small scale entrepreneurs using innovative indigenous technology
and expertise
SIDBI refinances:
 Loans granted for new SSI projects and for expansion,Technology, up-
gradation, modernization, quality promotion.
Loans sanctioned by SIDBI to small road transport operators,qualified
professionals for self employment, small hospitals and nursing homes, and
to promote hotel and tourism related activities.
Small Industries Development Corporations (SIDC)  
They are state-owned companies or agencies in the states of India which were
established at various times under the policy of Government of India for the
promotion of small scale industries.
In 1960, the first State Industrial Development Corporation (SIDC) was established in
Bihar. These mainly autonomous bodies are  controlled by the State government, who
may own a stake in the corporation. There are approximately 28 SIDCs in India.
Their main functions include the promotion of rapid industrialization in India. They
mainly work at the grass roots level, providing development in the backward and less
frequented parts of India.
They o�er financial leases and o�er guarantees. They also administer the schemes of
the central and state governments. The projects and surveys of the industrial
potential areas are conducted by them.
Small Industries Service Institute
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5. It has been playing a key role for development of MSME through counselling,
consultancy and training. Established in 1960 as Small Industries Service Institute
in 1975, the Institute has made significant contributions for promotion and
development of Micro, Small and Medium Enterprises.
Spectrum of Services:
Assistance / Consultancy to Prospective Entrepreneurs.
Assistance/ Consultancy to existing Micro and Small Enterprises .
Preparation / Upgradation of District Industrial Potential Surveys.
Preparation of Project Reports / Project Profiles.
Entrepreneurship Development Programmes
Motivation Campaigns
Project Appraisal for Bank / Financial Institutions.
Management Development Programmes.
 Skill Development Programmes
Awareness Programmes on Energy Conservation / Pollution Control.
Quality Improvement & Technology up gradation
Export Promtotion
Market surveys
Marketing Support
Registration of Micro and Small Enterprises under Ozone Depleting Substances Rules
, 2000
Revival of Sick Micro and Small Enterprises.
National Small Industries Corporation Ltd. (NSIC)
NSIC  is an ISO 9001-2008 certified Government of India Enterprise under Ministry of
Micro, Small and Medium Enterprises (MSME).
NSIC has been working to fulfil its mission of promoting, aiding and fostering the
growth of small industries and industry related micro, small and medium enterprises
in the country.
NSIC carries forward its mission to assist small enterprises with a set of specially
tailored schemes designed to put them in a competitive and advantageous position.
NSIC acts as a facilitator to promote small industries products and has devised a
number of schemes to support small enterprises in their marketing e�orts, both in
and outside the country.The schemes comprise of facilitating marketing support,
credit support, technology support and other support services.
Schemes
Single Point Registration Scheme wherein registered SSI units get purchase
preference in Government purchase programme
Issue of the Tender Sets free of cost
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6. Exemption from payment of Earnest Money Deposit (EMD)
Consultancy in
     Capacity Building
Policy & Institutional Framework
Entrepreneurship Development
Business Development Services
National Institute for Entrepreneurship and Small Business Development
(NIESBUD)The National Institute for Entrepreneurship and Small Business
Development is a premier organization of Ministry of Micro, Small and Medium
Enterprises engaged in training, consultancy, research, etc. in order to promote
entrepreneurship.
Objectives
To evolve standardized materials and processes for selection, training, support and
sustenance of entrepreneurs, potential and existing.
To help/support and a�liate institutions/organisations in carrying out training and
other entrepreneurship development related activities.
To serve as an apex national level resource institute for accelerating the process of
entrepreneurship development ensuring its impact across the country and among all
strata of the society.
To provide vital information and support to trainers, promoters and entrepreneurs by
organising research and documentation activities relevant to entrepreneurship
development
To train trainers, promoters and consultants in various areas of entrepreneurship
development
To o�er consultancy nationally/internationally for promotion of entrepreneurship and
small business development.
To provide national/international forums for interaction and exchange of experiences
helpful for policy formulation and modification at various levels.
To share international experience and expertise in entrepreneurship development.

frontiers.
State financial Corporations(SFC)
In order to provide medium and long term credit to industrial undertaking, which fall
outside the normal activities of commercial  banks, a central industrial finance
corporation was set up under the Industrial Finance Corporations act, 1948.
Main Features
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7. The bill provides that the state government may,by notification in the o�cial gazette,
establish a financial corporation for the state.
The share capital shall be fixed by the State government but shall not exceed Rs
2crores .
Shares of the corporation will be guaranteed by the Sate government as to the re –
payment of principal and the payment of a minimum dividend to be prescribed in
consultation with the central government.
The corporation will be authorized to issue bonds and debentures for amounts which
together with the contingent liabilities of the corporations shall not exceed five –
times the amount of the paid – up share capital and the reserve fund of the
corporations.
The corporation may accept deposits from the public repayable after not less than five
years, subject to the maximum not exceeding the paid up capital.
The corporation will be managed by a board consisting of a majority of Directors
nominated by the Sate governments , The Reserve banks and the industrial Finance
corporation of India.
Functions
Project advisory and Finance
Project conceptualization and related services, including guidance in relation to
selection of projects, preparation of feasibility studies, capital structuring, techno –
economic feasibility, financial engineering, project management design etc.
Credit Syndication including assistance in legal documentation etc

Marketing Management
Effective marketing of small scale industrial products would ensure higher levels of
income, consumption, and employment which increase the standard of living of the
people.
Marketing is a dynamic process as it is highly situational. It is concerned with the
activities involved in the flow of goods and services from producer to consumer.
Factors which contribute to the marketing problems
Increasing competition from within the small scale sector as well as from large
industries with established brand names and marketing  setup
Consumer awareness, even in rural and semi urban areas, for quality goods.
The need to set up distribution networks for reaching out widely dispersed markets
Inability of the SSI units to exploit the export markets
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8. Production Management
Production management means planning, organising, directing and controlling of
production activities.
Production management deals with converting raw materials into finished goods or
products. It brings together the 6M's i.e. men, money, machines, materials, methods

Function
Production Control : ensure the right production plan
Scheduling : planning when the actual production would begin and ends.
Cost and Quality Control
Maintenance of Machines : ensure instruments used are in good working condition
Importance
Helps the Firm to Accomplish its Objectives
Boost Business Reputation and Goodwill
Reduces the Cost of Production
Finance Management
It means controlling and managing the firm's financial resources. The process of
managing finances involves cash flow management which is concerned with the
inflow and outflow of money in and out of a business.
For this a cash flow statement is prepared which records a company's income and
expenses in a systematic form.It lists cash to and cash from operating, investing and
financing activities along with the net increase or decrease in cash for the period.
For proper management of a company's finances, the knowledge of accountancy,
particularly the principles of double entry book keeping is an essential requirement.
This whole process of financial management gives the true financial position of the
company.It is thus essential for smooth and successful functioning of the enterprise in
a profitable manner on a long term basis.
Rules to manage cash Flow
Understand the cash flows in a broader perspective in order to any avoid
financial troubles in future.
Measure the cash flows and the changes in it over a time-period and categorize
company's cash receipts and outlays for every financial year This can be done by
preparing a statement of cash flows on monthly, weekly or daily basis depending
upon the requirement of business.
All the business transactions of a company are recorded in a general ledger
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9. account. A 'general ledger account' is the main accounting record of a business in
which the financial transactions are represented by means of the two entries i.e.
debit and credit.
Human Resource Management
Today human factor is considered to be the most important resource because the
effective utilisation of the other resources of the organisation depends  upon the
management of the personnel of the organisation. Human resources appreciates in
value as the time progresses in terms of acquisition of knowledge and experience.
They have inherent dynamism and potential for development.
Objectives
To build and maintain cordial relations between people working at di�erent
levels of the organisation
�.
To ensure e�ective utilisation of the available human resources.�.
To provide fair working conditions, wages and amenities to the employees.�.
To achieve the development of each individual employee to his/her fullest potential.�.
Small and medium industries can include variable pay component to their pay

be integrated.
Similarly these SMES should put in place individual and group incentive schemes.
The units may take consultancy from the business schools, at a nominal charge in
this regard.
A majority of small and medium units under review do not follow promotion system.
This may be one of the reasons for larger quits. The performance of employee is
deeply connected with his career advancement.
These units may adopt appropriate promotion policy. A seniority may be the basis
for promotion decisions for non-technical nature of work and ‘performance’ ought to
be the criterion for the skill and competency based jobs.
Export Marketing
The capability of Indian MSME products to compete in international markets is
reflected in its share of about 34% in national exports.
In view of this, export promotion from the small scale sector has been accorded high
priority in India’s export promotion strategy which includes simplification of
procedures, incentives for higher production of exports, preferential treatments to
MSMEs in the market development fund, simplification of duty drawback rules, etc.
Products of MSME exporters are displayed in international exhibitions free of cost
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10. under SIDO Umbrella abroad.

Indian Exports is contributed by SSI Sector.
It would surprise many to know that non-traditional products account for more than
95% of the SSI exports.
The SSI sector is reorienting its export strategy towards the new trade regime being
ushered in by the WTO.
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