STEPS FOR SETTING UP MSME UNIT

2.       Selection of the product based on market survey
Form of ownership
   -     Proprietary concern
   -     Partnership
   -     Limited company
   -     Cooperative society

3. Location of the enterprise :-
   -     Nearness to market and nearness to raw materials.
   -     Early availability of transport facility at cheaper rates.
   -     Availability of skilled workers at cheaper rates.
   -     Incentives/concessions for industrially backward areas

4. Land & Building :-    Availability industrial sheds and with minimum investment

5. Preparation of the project report :-
    -    Technical feasibility.
    -    Economic viability.
    -    Total cost of the project-fixed as well as working capital.

6. Registration :-
    -    Whom to approach-depending upon the location of the factory.
    -    Permanent and temporary registration.

7. Finance :- (for fixed assets & working capital)
    -    Whom to approach - Bank, private financial Institutions, Govt. agencies, UPFC, etc.
    -    Types of scheme.

8. Statutory Licenses/clearances :-   e.g.
    -    Manufacture of drugs Cosmetics         - State Drug controller/Drug Control Administration.
    -    Manufacture of fruits and vegetable based products (FPO) - D.D Food, Vegetable Preservation,
                                                                                              Ministry of Agriculture, Govt. of India
    -    Power connection                                                          - State Electricity Board
    -    Pollution Control                                                           - State Pollution Control Board and so on.

9. Purchasing of Machinery :-
    -    NSIC provides indigenous and imported machinery to MSMEs on hire purchase basis. The rate of earnest to be paid varies from 15 to 30%. Full hire purchase value is pay able in 13 installments.

10. Recruitment of personnel :-
    -    Well qualified - skilled & unskilled
    -    Well experienced skilled & unskilled
    -    Minimum wage rate prevalent

11. Installation of machinery.

12. Power connection / water supply

13. Procurement of raw materials :-
    -    Minimum stock
    -    Easily available
    -    Find substitutes
    -    Lower rates

14. Production :-
    -    Know the installed capacity.
    -    Less rejections
    -    Quality control & testing.

15. Marketing :-
    -    Advertisement and publicity
    -    Channel of distribution
    -    After sales service, if required
    -    Feed back from customer.

16. Repayment of loans

17. Profit generation

18. Avoiding sickness
    -    Modernization and technology upgradation

TIPS FOR MSME ENTREPRENEUR

• Do not overburden yourself right from the beginning. you will have plenty to do later no.

• An entrepreneur should be a moderate and calculated risk taker, so take your decisions considering this fact at all times.

• An  entrepreneur's work is not to do all the work himself, but also to get result from the work done by others.

• Proper and planned utilization of time can yield better performance.

• Keep yourself fully informed about the market developments and think out the adjustments when required in advance.

• Do not avoid or run away from your problems be they the creditors/money lenders in band times, but take them into confidence and keep them informed about your real position. This is unpleasant but it can be helpful.

• The best way to face competition is to know more about your competitors, my meeting and talking to related persons, don't keep yourself in the dark about them.

• Do not hesitate to take advice of experts. Learn to use their advice to your advantage. Develop all round managerial understanding.

• Do not promise immediate repayments of private borrowings from your relatives or friends, especially if they have been put into long them assets. Spread out your payments and make promises on expected receipts. Don't delay. A days delay in decision can multiply in weeks/months.

• Any decision will always have many implications, both short term and long term. So weigh them, evaluate them and then do not be afraid to take hard and unpleasant decisions

• You must have your own information system to know where your business is leading.

• Don't depend too much on your memory. Make a habit of writing point's down and maintain the records regularly. A simple way is to spend at least 15 minutes a day to do this. That can save spending days at the end of the year to write them. Make recording a regular practice.

• Cost consciousness does not mean accurate calculations of cost up to last decimals. But it is awareness about your commitments, priorities, and implications, commensurate with your resources and returns.

• Through financial results and problems are your major concerns, these may not always be the only cause or factor for improving your performance.

• Anticipate changes and problems and prepare your self to face them.

• You will be surprised to know that the majority of MSME units have failed in the first year itself. Work hard and cautiously in the initial period in order to lay a solid foundation.

• A majority of the reasons that cause failure can be avoided if proper planning is done in advance.

• Only plan for likely difficulties/uncertainties over which you have reasonable control. Do not worry about uncertainties over which you have little control, make provisions about them and then forget. For instance, take insurance against fire and then stop worrying.

• If you think someone can do your work, delegate it to him and monitor his performance. This will give you more time to do some more important work.

• Develop the habit of spending half an hour everyday to plan your activities and to assess your day's work. It will keep you free of tensions and your unit healthy.

• Managerial success is into keeping oneself, totally busy and involved in the day-to-day work, but to have adequate free time to think, plan and work for future also.

• Keep yourself aware about technology by visiting factories, exhibitions, and markets and by being members of trade/industry associations.