Entrepreneurship and Skill Development Programs MSME [Perfect Preparation], As soon as a person decides to become an Entrepreneurship and start MSME, he has to take several Important fifteen steps and formalities one after the other. They are … Which you must look at.
Table of Contents
15 Tips to Get Your Entrepreneurship Starting SSIS and MSMEs.
1. Arrangement of Finance:
The Entrepreneurship needs to acquire assists of 2 kinds namely Fixed assets and current assets. Long term finance is needed to acquire fixed assets like land, building, plant and machinery, and security deposits. Short term funds are required for acquiring current assets. Current assets are essential for the day to day working of the industry.
Long term funds include owner’s capital, a subsidy from central/ state govt., personal borrowings from friends and relatives, and long term loans from financial institutions like KFC and KSIDC.
2. Selection of Form of Ownership:
He has to select sole proprietorship or family ownership or partnership or private limited company as the form of ownership.
3. Selection of Location and Site:
Location is selected after considering certain factors such as nearness to market, sources of material and labor, modern infrastructure facilities, etc. The Entrepreneurship has to choose a suitable plot for the factory.
He may purchase land directly or choose from an industrial area developed by State Development Corporations like SIDCO, or Directorate of Industries. In order to stimulate industrial growth, the government of Kerala is providing infrastructural assistance by way of…
- Mini industrial units.
- Development Plots.
- Developing areas. And,
- Industrial estates.
4. Designing Capital Structure:
Apart from the own capital, he may secure finance from friends and relatives, term loans from banks, and financial institutions. Acquiring Manufacturing Know-How or Technology:
Many institutions of government, research laboratories, research and development divisions of big industries, and certain consultancy agencies provide the manufacturing know-how.
5. Scanning of Business Environment:
it is essential on the part of the Entrepreneurship to study and understand the prevailing business environment. Entrepreneurship should scan the business opportunities and threats in the new environment.
To study the administrative framework, procedure, rules and regulations, and other formalities implemented by the government. The potential Entrepreneurship must assess his own deficiencies, which he can compensate through training.
6. Selection of the Product:
The very success of one’s venture will depend on the rationality of his decision in this regard. The economic viability of the product can be ascertained by considering certain demand aspects such as the volume of demand in the domestic market, the volume of demand in the export market, the volume of potential demand, the degree of substitution of an existing product, etc. The prospective Entrepreneurship has to identify the product based on market research or market survey.
7. Preparation of Project Report:
The report usually covers important items like sources of finance, availability of machinery and technical know-how, sources of raw material and labor, market potential, and overall profitability.
8. Registration as a Small Scale Industry:
Registration with the Department of Industries and Commerce is only optional. There is no statutory obligation, but small scale industries can avail various facilities, incentives, and concessions offered by the state as well as the central government only if they registered as SSI. The registration would be done in two stages.
9. Provisional Registration
It will be valid for one year with possible three extensions of six months each. It helps the Entrepreneurship to take the necessary steps to bring the units into existence. The provisional registration may enable the party to:
- Apply to NSIC/SIDO and other institutions for procuring machines on an H.P basis.
- Apply for power connection.
- Apply to local Bodies for permission to construct the shed to establish a unit.
- Apply for financial assistance to SFC/Banks or other financial institutions on the basis of the project report.
- Obtain sales tax, excise registration, etc whenever required.
- Apply for a shed in an industrial estate/ development site in an industrial area/ material for the construction of the shed as the case may be.
10. Obtaining Statutory Licence:
Any person should obtain the following licenses and certificates before starting the venture:
A. Licence from the Directorate of Factories and Boilers For:
- Registration under section 6, 7, and 85 of the Factory Act.
- Approval of factory building.
B. Licence from Local Bodies For
- Installation of plant and machinery.
- Construction of the building.
C. No Objection Certificate from the State Pollution Control Board.
11. Apply for Power Connection:
There are 2 categories of power, the Low Tension (LT) and High Tension (HT). A consumer can avail LT only if the connected load is 75 HP and below. If the connected load is between 75 HP and 130 HP, the consumer has the option to avail either LT supply or HT supply.
12. Registration under the Sales Tax Act:
Business enterprises are subject to three important taxes- Income Tax, Excise Duty and Sale Tax. Income tax is levied on income as defined under the IT Act of 1961. It is a revenue of the Central Government. Excise duty is a tax levied by the central Government. It is the duty levied on the cost of goods manufactured within a country.
Sales tax is levied whenever goods are purchased from within the state. When goods are purchased from outside the state, Central Sales Tax is levied. Application for registration should mention all places of business dealer including the godown in which the goods are stored. The following papers are to be submitted for registration.
- Application for registration in Form 1 duly signed.
- Return of Estimated Annual Turnover in Form No. 10.
- Counterfoil of challan for Rs. 100 towards registration fees.
On the basis of a declaration of the anticipated turnover and nature of turnover, registering authority may demand security, which is normally ½ times of the anticipated tax due.
13. Installation of Machinery:
Machinery should preferably be installed as per the plant layout.
14. Recruitment of Manpower:
The number and type of workers are to be decided. After this, the required workers should be recruited.
15. Procurement of Raw Material:
The raw materials may be procured indigenously or may have to be imported by the Entrepreneurship. The next step is to start production, which is taken up in two stages- Trial production and Commercial production having successfully test-marketed the product, commercial marketing can be undertaken.-
For this, the application form has to be made to the GM of DIC through IEO/ Taluk Industries Officer. The GM should inform the Entrepreneurship of the date and time of the inspection of the unit. On being satisfied a registration certificate may be issued by the Directorate of Industries within one month of the receipt of the application.
The period of the certificate whether provisional or permanent will be for a period of 2 years. Renewal certificate would be affected by the GM (DIC) within a period of 3 months from the date of expiry of the certificate.
Business management expert and Leadership Consultant and Business Coach, who writes her blog, Jay’s Trends, focused on helping small business owners understand trends in Business management. Other posts by Jayprakash Prajapati»