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Small Scale Business

A small-scale enterprise is a business that employs a small number of workers and does not have
a high volume of sales. Such enterprises are generally privately owned and operated sole
proprietorships, corporations or partnerships. The legal definition of a small-scale enterprise
varies by industry and country.


The U.S. Small Business Administration states that small-scale enterprises generally have fewer
than 500 employees within a 12-month period in non-manufacturing industries. A company must
consider any individual on its payroll as an employee. In Australia, however, a small-scale
enterprise is one that has fewer than 15 employees on payroll, as defined by the Fair Work Act.
The Small Business Act for Europe states that small enterprises are those that have 250
employees or less. Small-scale enterprises in Asian countries generally have 100 or fewer
employees, while small-scale African enterprises hire 50 or fewer workers.

Financial Measures

In some countries, the definition of a small-scale enterprise is bound by financial measures such
as net profits, balance sheet totals, the value of assets and annual sales. In the United States, for
example, a non-manufacturing small-scale enterprise is one that does not earn more than $7
million in a year. Financial measures can vary by industry, as annual receipts may be higher for
industries that have higher overhead costs to operate. In general, small-scale enterprises are
businesses that do not dominate their respective industry.

Economic Impacts

While large enterprises employ many individuals, small-scale enterprises in the United States
account for nearly half of the gross domestic product. Small-scale enterprises help stimulate local
economies by providing local individuals with jobs, as well as products and services to
community members. Moreover, such enterprises help diversify and grow their respective
industries, as many women and minorities make significant contributions to the small-business
world. When there is a rise in small-scale enterprises, countries may see reforms in basic rights.
For example, some U.S. states now allow sole proprietors without employees to have access to
group health care. In times of recession, however, the SBA states that small-scale enterprises can
account for a large number of employee layoffs.

How does the Indian Government define Small-Scale Business

Indian government defines small businesses on the basis of the business’s ability to invest in the plant
and machinery. According to the definition provided by the government website for business,, a small scale business is a business set up in which the financial commitment
towards infrastructure such as building & equipment, whether made as an owner or on rental or
purchase basis, does not surpass Rs. 1 crore.

Types of Small Business

 Small-scale manufacturing industries.

 Handlooms and power loom.

 Khadi

 Agro-based industries.

 Tuition Centres.

 Photography.

 Breakfast joint

 Printing.

 Coir

 Sericulture
Nature of Small Business

The nature of small businesses can be classified as follows:

1. Shoestring Budget

A sole proprietor or a small group of people operate small businesses. These businesses often run on
‘shoestring budget’ meaning that small businesses function on a very tight budget.

2. Labour intensive

Small businesses are mostly labour intensive. Various types of small business largely rely on labour
for their functioning. The primary nature of small businesses is more involvement of physical work
rather than intellectual work. The lack of machinery makes the employees manage their operations

3. Community-based

Small businesses are started with the motive of satisfying the needs and demands of a local area or
community. These businesses demographically target few areas of concentration and are hence

4. Indigenous technology

Due to small businesses being community focused and labour oriented they often thrive upon native
methods of operations. In India, there are many businesses in the rural sector that still use outdated
technology. This might give uniqueness to the products but hinders the development of the business.

“Small enterprises rather than big corporations are driving the Indian economic recovery. India’s
MSME (micro, small and medium enterprises) sector, with 48 million enterprises, contributes
37.5% to the gross domestic product, provides employment to 111.4 million persons and accounts
for more than 40% of India’s exports.”
– Livemint, 2016.

Tiny Industries
Tiny industry is one in which investment in plant and machinery does not exceed Rs. 25 lakhs
and it should be located in towns with population less than 50,000. (This locational limitation has
now been dispensed with).

In the definition of small scale industry, the value of plant and machinery includes the
investment made in productive plant and machinery. In calculating the value of plant and
machinery, the actual payment made by the owner, irrespective of whether the plant and ma-
chinery is old or new, will be taken into account.

The cost of consumable stores and the cost of installation of plant and machinery will not be
taken into account. The cost of consumable stores and the cost of installation of plant and
machinery will not be taken into account in calculating the value of plant and machinery.

Similarly, cost of generating sets, extra transformers, bank and service charges etc., are not taken
into account in calculating the cost of plant and machinery.

Role of Small Scale Industries:

The contribution of this sector is considerable to the Indian economy. About 2.4 million units are
providing employment to over 14 million people, and contributing over a third of the overall
gross output of the manufacturing sector. Output from small enterprises now stands at Rs.
236,500 crores and is growing at a rate of about 8% per annum. This sector is also contributing
about a third of country’s exports.

The Planning Commission observed that these industries can play the following important
roles in accelerating the rate of industrial growth and economic prosperity:
(a) These create immediate and permanent employment on a large scale at relatively small
capital cost.

(b) These can immediately meet a substantial part of the increased demand for consumer goods
and simple producer’s goods.
(c) These offer a good method of ensuring more equitable distribution of national income.

(d) These help for growing into an efficient and progressive decentralised sector of economy.

(e) These provide more opportunities of work and income.

In this regard once Dr. Shyma Prasad Mukerjee the then Minister of Industries said, “If we
really want to tackle the grave problem of unemployment that faces the country today, we
can do so not only by having large scale industries in different parts of the country but also
by regional planning of small scale and medium sized industries in different areas”.
Organisations for Assistance to SSI:
To fulfill the various objectives of Small Scale Industries programmes, various organisations
have been setup both at the Central and State level. Although the development of the small scale
industries is the responsibility of the State Governments, various issues regarding programme of
development of small scale industries having all India character are tackled at the central level.
Thus the Government of India takes the responsibility of planning and coordinating the basic
programme of development of small scale industries.

A. Organisations at the Central Level:

Following are some of the important organisations at central level:
1. All India Small Scale Industries Board:
This board was set-up in 1945 and is responsible of overall planning, coordinating and
development of small scale industries in the country. The board comprises the State and Central
Government officers, representatives of various institutions, financing bodies and a number of
non-officials representing trade.

It deals with the questions relating to the supply of raw materials, credit facilities and reviews,
the programmes of implementation and formulates new directives for further growth of small
scale sector.

2. Small Industries Development Organisation (SIDO):

This organisation was set up in 1954 with Development Commissioner as its head. Its main
object is to maintain close relation with the State Government and different organisations and
institutions of central and state levels.

It has following important functions:

(a) Co-ordination:
This organisation co-ordinates the work relating to the development of small scale industries
according to the All India Policy programme. It co-ordinates the policies and programmes of
various State Governments and the programme for the development of large and small industries.

(b) Industrial Development:

This organisation suggests a similar pattern for the whole country. It assists giving technical
advice and helps in the procurement of raw material and machinery.

(c) Industrial Extension Service:

It works for the marketing assistance, training to help the small industries, improvements in
productivity and the competitive strength.

3. National Small Industries Corporation (NSIC):

It was established in 1953 with the main objects of:
(i) Supplying machinery and equipment to small scale industries on hire-purchase basis.

(ii) To help them in procuring government orders for supplying various items.

(iii) Distribution of basic raw materials through t heir raw material depots.

(iv) Import and distribution of components to actual small scale users.

(v) Construction of industrial estates and the establishment and running of Proto-type
production-cum-training centres.

4. Small Industries Service Institutes (SISI):

The Small Scale Industries Development Organisation functions through the Small Industries
Service Institutes situated one each in all the states. These have full-fledged mechanical
workshop and testing laboratory. Mechanical workshops are equipped with machine shop, heat
treatment, milling etc., to undertake the jobs for small scale industries.

Laboratory provides facilities for chemical testing, analysis of various raw materials and testing
for strength etc. Such laboratories and workshops are situated in the important industrial towns.
Institutes also offer the technical service regarding selection, installation and layout of
machinery; preparation of designs, drawings and model schemes. It also provides facility of on-
the-spot advice through field visits to the factory sites.

5. Department of Small Scale Industries:

This department has been created in 1990 to function as nodal agency for the policy formulation,
promotion, development and protection of small scale industries. It regularly monitors their
implementation. The department is evolving various programmes for the growth of small scale
and rural industries.

Today, banks finance the entire business cycle from the purchase of raw materials to the
realisation of sale proceeds.

State Bank of India and its subsidiaries grant loan to small industries. All nationalized banks and
other commercial banks have also now started to grant loan to small industries. The Bank of
Baroda, The Central Bank of India, The United Commercial Bank, The Punjab National Bank,
Indian Overseas Bank, The Bank of Allahabad and so many others have started to finance small
industries considerably.

These banks grant loan to industries for fixed as well as for working capital requirements at the
interest rates normally varying between 11 to 13%.

The loan is to be secured by a registered mortgage of the fixed assets in the case of loans for
land, building and immovable machinery. In the case of loans for movable assets, it should be
secured by pledge of movable machinery/equipment.
A margin of about 50% is kept in respect of immovable assets charged to the bank, which may
be relaxed, where found necessary. In case of movable machinery and equipment, a margin of
33½% is normally allowed, which margin be relaxed to 25% where found necessary.

Loans are to be repaid within a duration of 4-5 years in equal installments.

Every application for loan should have the following enclosures:

1. Detailed approved scheme (in triplicate) for which the loan is needed.

2. Full details of property along with 3 copies of the drawings of the immovable property which
the applicant proposes to offer as security against the loan applied for.

3. An affidavit to the effect that capital investment in the machinery and equipment’s in the
industry does not exceed Rs. 60 lakhs (or 75 lakhs in case of ancillary units).

4. An affidavit to the effect that the property is owned by the applicant or his surety.

5. In case of property being in joint ownership, an affidavit is signed in presence of first class
Magistrate by all the owners offering property as security against the loan.

6. In case the loan is required for the purchase of machinery, equipment etc., three quotations
from the standard machinery suppliers must be enclosed.

Hurdles in the Progress of Small Industry Sector:

Generally, average Indian small industry finds it difficult to upgrade the level of technology, and
the search for modernisation and upgradation in small industry have to be contended with several
hurdles, mainly due to procurement of resources and investment limits.

Only 5% units have automation, while 40% are semiautomatic. In order to accept global
competition and to be successful, it is necessary to adopt latest technology to meet challenges
related to quality, productivity, skill and economy.

Scope for Foreign Collaboration:

In any country, when some firm jointly manufacture with the help of some other foreign firm, it
is known as “Collaboration”. For example, we have made collaboration with British for
Durgapur Steel Plant, German for Rourkela and Russia for Bhilai Steel Plant etc. Collaboration
is only done with the permission of Government.

The aim of collaboration is to make use of technical know-how, experience and technical ability
of other countries, which so far has not been developed in their own country. In this way large
amount of money and time on research, analysis and experiment can be saved.

There is large scope of collaboration of small industries in our country also. It can be said that
small industries are back-bone of any country. With the collaborations, small industries can be
developed with great speed.

Foreign collaboration is allowed by the Government of India only in the field of relatively high
priority and in areas where sophisticated foreign technology would become available to the

It is mainly allowed in industries, the products of which will help to increase India’s foreign
resources either by increasing exports or by reducing current imports. Government of India has
issued illustrative list of industries where foreign investment or technical collaboration is

For the approval of foreign collaboration, an application on the prescribed form with 16 spare
copies is submitted to the Secretariat for Industrial approval, Ministry of Industrial Development,
Udyog Bhawan, New Delhi. A decision on application is made within 90 days from its receipt.

Market Survey for SSI:

The aim of market survey is to find out all the relevant economic and social facts about the
markets in which manufacturer’s goods will be sold. In market survey, investigation about the
product demand, design and cost of production is made. An owner always wants that his money
should be utilised to the best possible extent.
For this reason planners must survey the market conditions, where the customers are in need of
that product, whether the demand is continuous or intermittent. The next important factor a
planner should consider is to see that whether similar products are being produced by- some
other manufacturers or not and whether he will be able to complete them as regards quality and
cost is concerned.

As size of industry is related with the consumption of product therefore, this fact must be
considered while deciding the capacity of plants and machinery.

The following points are of utmost importance while making market survey:
1. Demand for products in the market.

2. Selling method to be adopted.

3. Possible new markets for the products.

4. Comments of consumers about the product.

5. To see that existing size, quality and design suit the customers or not.

According to Development Commissioner (SSI), a unit is sick, if:

(а) Capacity utilisation is below 50% in comparison to highest capacity utilised during preceding
five years,

(b) Erosion of net worth by more than 50%, and

(c) Closure of the unit for a period of more than six months.

Thus the sickness is failure to generate internal surplus on a continuous basis.

Causes of Sickness:
(i) Marketing problems.

(ii) Raw material shortage.

(iii) Inventory control problems.

(iv) Inadequate working capital.

(v) Power shortage.

(vi) Poor management.

(vii) Diversion of funds.

(viii) Disputes among partners.

(ix) Delay in Govt. approval/sanctions.

(x) Lack of infrastructural facilities.

(xi) Changes in market conditions.

(xii) Miscalculation of project cost.

(xiii) Defective plant and machinery.

(xiv) Defective layout.

(xv) Poor manufacturing methods.

(xvi) Untrained and unskilled Workers.

(xvii) Higher rates of interest on borrowed funds.

(xviii) Loans not sanctioned at needed time.

Measures for Avoiding Sickness:

1. Estimation of realistic project cost taking into account possible price escalation.

2. Completion of project on scheduled time.

3. Commercial production to start at the earliest possible.

4. Market should be as wide as possible.

5. Judicious mix of cash and credit sale should be worked out.

6. Adequate limits for working capital requirements should be got sanctioned.

7. Right type of manpower in right quantity is employed.

8. Quality concept at all levels should be implemented.

Assistance to Sick Units:

1. The Government provides such reliefs and concessions as may be feasible and necessary as
part of the rehabilitation package prepared by banks and financial institutions.
2. Healthy units are encouraged through income tax relief to take over sick units.
3. Assistance is available under technical development fund and the import policy for the import
of capital goods for replacement of absolute plant and machinery.
4. RBI had advised banks to set up cells at their head-quarters and at the important regional
centres to deal with sick industrial units and to provide expert staff including technical personnel
to look into the technical aspects.


In spite of expedient contribution by the SSIs towards the Indian economy, SSIs does not get the
indispensable support from the concerned Government departments, financial institutions, Banks, credit
societies and corporate thus the SSIs are becoming handicap in the face of competition at national and
international markets. The major problems faced by the SSIs are discussed below:

1. Scanty credit assistance

Scanty and timely supply of credit is one of the major problems faced by SSIs in India. Scarcity of
finance and weak creditworthiness is the main barrier for the development of SSIs in India. The
creditworthiness of these small borrowers is generally weak and therefore they face unwilling
creditors who may be persuading to lend only at high rate of interest.

2. Uneven and poor quality of raw material

SSI units face extreme problems in procurement of raw materials whether from local or
international market. The problems arise due to absence of sufficient quantity of raw materials,
poor quality of raw material at exorbitant price. The entrepreneur of SSI units has lack of knowledge
about the procurement from foreign market. Large scale industries enjoy economies of large scale
operation hence can procure the quality raw material at very reasonable price, thus can sell the
products at cheaper price as compared to SSIs

3. Absence of organised marketing process

SSI units do not have any organised marketing process and even does not appoint any marketing
organisation for marketing of products or services and hence their products compare unfavourably
with the quality of the products of large scale industries. They suffer competitive disadvantages in
comparison to large scale industries, as large scale industries infuse large amount of money on
branding and promotion activities.
4. Inadequate infrastructure
Inadequate infrastructure is a major problem for the SSI units to grow and prosper. Most of the SSI
units are located in semi-urban, urban and rural areas where the power supply is inadequate to run
big machines, several times power cut off, and poor road connectivity. Thus absence of adequate
infrastructure adversely affects the productive schedule of the enterprise leading to under-
utilization of capacity. More over the machineries, equipments and technology employed by the
SSIs are out dated, where the large scale organisation enjoys the competitive advantages. Beside
the above mentioned problems SSI units suffer from a number of other problems also poor
managerial capabilities, lack of adequate warehousing for free supply of goods, lack of skilled
manpower, lack of appropriate information, etc. Due to all these problems the progress and
development of Small scale industries could not reach the distinguished stage.

Micro Small Medium Enterprise

New Definition for MSME approved by the Government in 2018
 Micro enterprise are those Business with revenue up to Rs 5 Crore
 Small Enterprise are those Business with Revenue from Rs 5 crore to Rs 75 Crore
 Medium enterprise constitutes Business with revenue from Rs 75 crore to Rs 25o crore
A proposal to redefine the micro, small and medium entreprises in India has been approved by
the government of India. The new categorization will be based on the annual revenue and will
replace the current definition that relies on the investment in plant and machinery.

This is expected to improve the ease of doing business and void unncessary inspections by
authorities. With the introduction of GST, the sales data can be pulled from GST network.

Other steps taken in growing MSME growth include

 cut in corporate tax rate from 30% to 25%
 Increase the repayment period of loans by MSME from 90 days to 180 days

Small-scale industry and five year plans

The small-scale sector has been assigned an important role in the industrial economy of the
country on account of some of its inherent advantages like low capital intensity, high
employment generation capacity, regionally balanced development and even distribution of
wealth and income. Special emphasis has been laid on the promotion and development of small-
scale sector during the various plan periods. Various measures taken by the government to
promote small scale sector under Five Year Plans are described as under.
Advantages or Merits of Small Scale Business

1. Potential for large employment

Small Scale Industries have potential to create employment opportunities on a massive scale. They
are labor intensive in character. They use more labor than other factors of production. They can be
set up in short time and can provide employment opportunities to more number of people. This is
important for a labor abundant country like India.

2. Requirement of less capital

Small Scale Industries require less capital when compared to large scale industries. India is a
capital scarce country and therefore Small Scale Industries are more suitable in the Indian context.
They can be started and run by small entrepreneurs who have limited capital resources

3. Contribution to industrial output

Products manufactured by Small Scale Industries form a significant portion of the industrial output
of the country. They produce a number of consumer goods as well as industrial components in
large quantities and satisfy the needs of consumers. The consumer goods produced by Small Scale
Industries are cheaper and satisfy the requirements of the poorer sections.
4. Contribution to exports
Small Scale Industries contribute nearly 40 per cent to the industrial exports of the country.
Products such as hosiery, knitwear, hand loom, gems and jewellery, handicrafts, coir products,
textiles, sports goods, finished leather, leather products, woolen garments, processed food,
chemicals and allied products and a large number of engineering goods produced by the SSI sector
contribute substantially to India’s exports. Further products produced by Small Scale Industries
are used in the manufacture of products manufactured and exported by large scale industries.
Therefore they contribute both directly and indirectly to exports and earn valuable foreign

5. Earning foreign exchange

Small Scale Industries earn valuable foreign exchange for the country by exporting products to
different countries of the world. At the same time, their imports are very little and so there is less
foreign exchange outgo. Therefore Small Scale Industries are net foreign exchange earners. For
e.g. Small Scale Industries in Tiruppur contribute to a substantial portion of India’s textile exports
and earn valuable foreign exchange for the country.

6. Equitable distribution
Large scale industries lead to inequalities in income distribution and concentration of economic
power. But small scale industries distribute resources and wealth more equitably. It is because
income is distributed among more number of workers since it is labor intensive. This results in
both economic and social welfare.

7. Use of domestic resources

Small Scale Industries use locally available resources in a productive manner which would have
otherwise gone waste. Small amounts of savings which would have remained idle is channelized
into setting up of small enterprises. This increases capital formation and investment in the

Demerits or Disadvantages of Small Scale Industries

1. Lack economies of scale: SSI’s produce in small quantities. Therefore they do not enjoy
economies of scale in purchases, production and marketing. Their costs are consequently
higher and they are not able to compete with large scale units. They were able to survive
when many of the items were reserved for production by SSI’s. But after the economic
liberalization policy followed by the government, many of the items have been De-
reservad. Therefore large scale units can also produce products which were earlier
produced only by small scale units. Many of the SSI’s have closed down unable to compete
with large scale producers and cheap imports from other countries, especially China.

2. Low wages: Though SSI’s are labor intensive, the wages paid in SSI’s are low when
compared to those paid in large scale industries. In many SSI’s because of lack of safety
measures and proper training to workers, accidents and injuries are common occurrences.

3. Lack of modernization: Due to their small scale of operations and limited capital
resources, SSI’s are not able to invest in modernization. They do not have access to latest
technology and therefore cannot improve their efficiency of operations.

4. Inefficiency: Due to lack of scale economies, low skilled and poorly trained workers and
usage of outdated technology, small scale industry suffers from inefficiency of operations.
Their productivity is low when compared to large scale industries.

5. Overcrowding: It is quite easy to set up an SSI. The capital requirement is less and
procedural formalities are simple. This leads to intense competition and overcrowding.
It may lead to cut-throat competition affecting their survival.

6. Sickness: Due to the ease of setting up and because of the incentives available, many
unemployed youth set up SSI’s with very little business knowledge and skills. They find it
difficult to survive in the business and close down their operations. Further because of
the problems of procuring finance, use of outdated technology and lack of marketing
expertise many SSI’s incur losses and are forced to close down.

7. Less innovation capacity: SSI’s have limited financial resources, therefore they are not
able to invest adequately in research and development(R&D) or acquire technology.
As a result their technological up-gradation is less and they continue with outdated
processes and techniques. This hinders their competitiveness and capacity to come out with
new products, processes etc.

8. Low competitiveness: Due to their small scale, lack of modern technology and poorly
trained workers, SSI’s lack the competitiveness to compete with large scale industries.
Now, many items which were reserved for production by SSI’s have been De-reserved.
Therefore SSI’s face increasing competition from large scale Indian enterprises as well as
foreign competitors.

9. Low capacity utilization: In many SSI’s, capacity utilization is low and productive
capacity remains idle. Small firms are unable to utilize their full capacity due to problems
related to finance, marketing, technology, skills etc.

10. Lack of pollution control: Large scale enterprises which are polluting in nature, are able
to set up pollution control equipment such as effluent treatment plants. SSI’s are not able
to set up such facilities because of lack of finance, technology, skills etc.

11. Low labor productivity: The productivity of labor in small scale industries is low. The
reason is workers employed in SSI’s are unskilled, lack proper training and work on
outdated technology. Their wages are less and therefore motivation levels of workers is
also quite low. Poor labor productivity results in lower output, increasing the cost of
production and problems in meeting demand schedules.
Small Scale
Business In
Demographic Information

Name of the business: NIRVAAN by Mantra

Year of Start: 2012

Business started by: Ms. Goyal

Ms. Thakur

Ms. Singh +2
A small Scale Business in Gurgaon was set up by 5 women who had their interest in fashion but
were handling different areas at the professional front. They came together as they got in touch
through social media and made their own small scale industry in fashion. They curate
customized garments for their clients and are now doing very well for themselves.

An interview was conducted with the 5 of them and a visit to their store house where they also
have tailors as they design the garments for their clients and simultaneously work with the tailors
to bring out the perfect garment.


. As per Ms Goyal having a business partner who you can trust can really help in your venture.
“When you have a business partner, you can count on one another to ensure that business does
not get impacted when one of you has to attend to other fronts like home and children,” she
Ms Thakur added, “Manage your cash flow well, keep costs low and have plan B & C. Also,
invest in your health as business demands long hours and energy to straddle many worlds of
marketing, sales, branding, work-life balance, financial discipline and creativity.”

“If you wish to start a business, your risk taking capacity is high. Most of us spend too much
time aiming and in the process shy from firing. If you are confident of the product/service and of
yourself, just fire and aim later,” said Gurgaon-based Ahoi Haolai Sitlhou, who established her
spa business Oriental Senses after quitting as business consultant for an IT MNC.

The story of these 5 women is a success story which many take inspiration from. The visit and
the interview with them was one that was of immense information and knowledge about the
small scale business.


Any new set-up has its pros and cons. In the beginning the cons weigh more. For most it was not
easy to leave a secured job and all the benefits attached to it and jumping into an unknown

“From a swanky office of 9,000 sq ft at the most prime location of Cyber City in Gurgaon to a
dining table at home, certainly came with mix feelings of both anxiety and excitement,” said
Jessica, adding that re-establishing and making new contacts and from being somebody
associated to a multinational company to being a nobody from a company no one has heard of
and instilling belief in us and our products was a major task.


The ladies say that the biggest difference that they see as businesswoman is that the buck stops
with them and it is anyday more satisfying as the work-life balance is maintained.

“There is nobody to hide behind, there is nobody to blame. We are responsible for any failures,
setbacks, process deficiencies,” said Ms Goyal.
Ms Thakur added, “Running your own business, even though it’s a mom-and-pop shop at the
moment is more satisfying.

I can wrap my life around it without the endless hours of commute, meetings and other corporate
pain points. Maintaining work-life balance does not mean less work but definitely it allows to be
flexible and take my own call as per my convenience.”

She, however, said that her corporate experience and contacts helped her. “They have equipped
me with the right skills, discipline and work habits to jump-start life as an entrepreneur,” she

The businesswomen say that Gurgaon has great opportunities for budding entrepreneurs as there
is a ready market for anything unique, creative with good quality. “The place is right for new
ventures,” said Ms Singh. “With so many high flying corporate jobs making its way into the
millenium city, people from all parts of the globe who have made this city their home have a
liberal mindset to understand and try out new concepts and financial power to pay up for
services,” she added.

“Since Rendezvous is all about empowering women (a majority from nuclear families) and
letting them have a life of their own, while taking complete care and responsibility for their kids,
there could not have been a better place than Gurgaon for us,” Ms Thakur added

Women entrepreneurs believe the cosmopolitan nature of Gurgaon, high concentration of

companies and a professional atmosphere allows an entrepreneur to start small, learn quickly and
then scale up. Other cities may not have this benefit.

Besides passion, maintaining work life balance is one of the major reasons for many women to
leave their corporate employment and craft their own business.

After her eight year stint in IT industry — working for clients like GE, Google, Citibank and
Llyods TSB Bank — Gurgaon-based Rashmi Thakur, a software engineer, quit her job in 2010.
“After my son turned one he started feeling my absence primarily because he would see his
cousins with their moms. On the other hand, my responsibilities at work were increasing by the
day. I was happy with greater responsibilities at work but my personal life was gradually drifting
apart. I needed to get hold of it. I decided to quit,” she said.

Some advantages of having a small scale business that they had to share are:

1. Opportunities for entrepreneurship

Small Scale Industries provide opportunities for entrepreneurs with limited capital. Setting up of
an SSI requires less capital and lower investment in technology and machines when compared to
large scale enterprises. Therefore small entrepreneurs car start Small Scale Industries easily and
succeed. Japan which was devastated by the Second World War became a major economic power
because of many small entrepreneurs, who contributed greatly to the nation’s development.

2. Cost efficiency
Small scale units can adopt lean production method. which offer better quality and more variety at
a lower cost. They can be more cost efficient when compared to large scale units because their
expenses are lower.

3. Reducing migration
Migration happens when people living in rural areas are not able to find employment and therefore
migrate to urban areas seeking employment. Large scale migration puts tremendous pressure on
land, water and other resources in urban areas leading to poor quality of life. Small Scale Industries
use the skills and talents of rural craftsmen, artisans etc. They provide gainful employment to those
with inherited skills resulting in their economic upliftment. Thus Small Scale Industries help in
reducing migration.

4. Suitable for non-standardized products

Large scale enterprises are suitable for manufacturing standardized products on a large scale
whereas Small Scale Industries are more suitable for manufacturing non-standardized products.

5. Flexibility in operation
Small scale enterprises are more flexible. They can adapt themselves to changing market
requirements very fast and benefit from new opportunities.

6. Quick decisions
Since the enterprise is small and there is not much hierarchy, quick decisions.can be taken. Quick
decisions are helpful in solving problems in the initial stages and also to exploit market

7. Adaptability to change
Small Scale Industries can understand the changing requirements of the customers and adapt
themselves much quickly. They can change their procedures, methods and techniques faster and
cater to new requirements of their customers.
8. Small market size
In case the market size is small, producing products on a large scale would not be feasible. In such
cases, Small Scale Industries are more suitable since they produce limited quantities.

9. Customization
Today customers prefer products tailored to their specific needs. They demand unique products.
In such cases where products have to be customized to individual customer needs large scale
production would not be suitable. Small Scale Industries are better suited in case products have to
be customized.

10. Low social costs

In the case of large scale enterprises, society has to incur high social costs in terms of air and water
pollution and environmental degradation. But in the case of small enterprises, such social costs are

11. Opportunity for talent

Small Scale Industries provide opportunity for talented individuals who do not have huge funds,
to start enterprises on a small scale. Dhirubhai Ambani of Reliance, Karsanbhai Patel of Nirma,
Brij Mohan Munjal of Hero Honda, Venugopal Dhoot of Videocon, Sunil Mittal of Bharti
Enterprises (Airtel), Narayanamurthy and his co-promoters of Infosys, Ramalinga Raju of Satyam
are all examples of entrepreneurs who started their business on a small,scale, and through
intelligence, determination and commitment have transformed their small companies into large
world class players.

12. Lesser industrial disputes

In large scale enterprises workers are more organized and in many large scale enterprises there are
strong trade unions. The trade unions fight for the workers rights. If the management fails to accept
the demands of the trade unions, the trade unions gherao the management, adopt go slow tactics
and strike work. But in small scale enterprises, workers are not well organized and union activity
is less. So there is very little possibility of industrial disputes to occur.

13. Personal contact with employees

Businesses engaged in small scale production have less number of employees. It is easy to maintain
personal contact with employees. Grievances and problems would be known immediately and
solved. Therefore there is very little possibility of any industrial dispute.

14. Personal contact with customers

The number of customers is limited and the small scale entrepreneur would be directly involved
in the business. Personal contact can be maintained with customers. Their needs and requirements
can be understood and satisfied. This results in satisfied customers leading to stable demand.

15. Self interest

Small business is generally run by the sole proprietor of the business. He earns all and risks all.
Self-interest act as a strong motivator. Therefore he would put in his best efforts to make the
business a success.

The small scale business set up- Nirvaan by Mantra, is an inspiration to many around. The
experience that was gained and the understand of a small scale enterprise is something that will
be put to use for years to come. The knowledge shall also be seamlessly passed on to people
around for their benefit.

Every enterprising woman nurtures the dream of escaping the cubicle forever to start her own
venture. Only a few succeed in taking the plunge due to high risk involved. However, many
women from the millennium city have bid adieu to their high flying corporate careers to start
their ventures they’re passionate about.