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CHALLENGES FOR SMALL ENTERPRISES AUTHOR: ALPANA TREHAN CHAPTER-9 © 2011, Dreamtech Press :: Chapter 9 1
Managerial ProblemsFinancial ProblemsMarketing ProblemsHuman Resource ProblemsRaw Material-Related ProblemsTechnological Problems PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 2
Most of the SSEs are not managed effectively and efficiently SSEs generally lack managerial capacities to successfully implement new opportunities SSEs also have an insufficient number of trained and experienced employees as they cannot pay high salaries The different Government initiatives to overcome managerial problems are: Management Training Programs National Institute for Micro, Small and Medium Enterprises National Institute for Entrepreneurship and Small Business Development, Noida Indian Institute of Entrepreneurship (IIE), Guwahati MANAGERIAL PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 3
SSEs are unable to borrow at reasonable interest rates due to their low goodwill For rejection of consignment and delay in payment small enterprises need to close their operations The Government initiatives to overcome financial problems are: Priority Sector Lending Policy Credit Guarantee Cover Fund Scheme Policy Package for Stepping up Credit to Small and Medium Enterprises (SMEs) Small Industries Development Bank of India (SIDBI) State Financial Corporations (SFCs) and State Industrial Development Corporations (SIDCs) FINANCIAL PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 4
Dependency on outside sources tends to raise the cost of their products and services SSEs, being unaware of marketing concepts and strategies, hesitate opting for efficient marketing techniques Small scale entrepreneurs do not accurately understand what kind of products are in actual demand in the market The Government initiatives to overcome marketing problems are: Consortia and Tender Marketing Approach Single Point Registration for Government Purchase Scheme Exhibitions and Technology Fairs Facilitation in Export of Products and Projects MARKETING PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 5
SSEs generally face difficulty in acquiring and retaining employees with proper knowledge and skills Small enterprises cannot offer equal compensation to employees The Government initiatives to overcome human resource problems are: Various training programs, seminars, and workshops to bridge the skill gaps of employees in SSEs conducted by NSIC Some of the institutes focusing on human resource development of SSEs : Indian Institute of Entrepreneurship(IIE), Guwahati Fragrance and Flavour Development Centre, Kannauj National Institute for Micro, Small and Medium Enterprises(NIMSME), Hyderabad HUMAN RESOURCE PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 6
Non-availability of raw materials on a timely basis or insufficient quantity of raw materials Scarcity of basic raw materials needed for daily production The Government initiatives to overcome raw material-related problems are: NSIC and Small Scale Industries Development Corporations Raw Material Assistance Scheme RAW MATERIAL-RELATED PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 7
Unable to use the latest techniques of production due to lack of capital The productivity and quality of products of SSEs tends to be low The Government initiatives to overcome technological problems are: ISO 9000/14001 Certification Fee Reimbursement Scheme National Manufacturing Competitiveness Program (NMCP) Credit Linked Capital Subsidy Scheme (CLCSS) TECHNOLOGICAL PROBLEMS FACED BY SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 8
Entrepreneurship Development Programs (EDPs) Rajiv Gandhi Udyami Mitra Yojana (RGUMY) Scheme of Survey, Studies, and Policy Research Micro, Small, and Medium Enterprise Development (MSMED) Act, 2006 Reservation Policy of Government ROLE OF CENTRAL AND STATE GOVERNMENTS IN PROMOTING SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 9
IPR 1948 IPR 1956 IPR 1977 IPR 1980 IPR 1990 New Small Enterprise Policy (NSEP), 1991 Comprehensive Policy Package for Small Scale Industries and Tiny Sector 2000 Industrial Policy Package for SSEs2001-02 Industrial Policy for SSEs 2003-04 Policy Package for SSIs 2004-05 Policy Package for SMEs 2005-06 INDUSTRIAL POLICIES FOR SMALL ENTERPRISES © 2011, Dreamtech Press :: Chapter 9 10
Small Scale Enterprises (SSEs) come across difficulties in every stage of their operations. In case of SSEs, they are often unable to obtain adequate financial resources for purchasing equipment and machinery, procuring raw materials, and meeting day-to-day expenses. Recognizing the importance of SSEs in the economic growth of the country, the Indian government has formulated several policies and schemes for the development and promotion of SSEs. RECAP © 2011, Dreamtech Press :: Chapter 9 11
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