A procedural format on setting up an SSI..
Selection of a product 1.)Import Restictions 2.)Entrepreneur’s Experience 3.)Profitability 4.)Govt. Concession 5.)Priority Sector Industries 6.)Existence of Export Market 7.)Licensed or De-licensed 8.)Free Trade Zone/ Backward Area 9.)Ancilliary 10.)Availability of Raw Material, Machinery, Labour, Technical Know-how etc.
1.)Availability of Raw Material 2.)Availability of Skilled & Unskilled labour 3.)Nearness to the source of motive power 4.)Nearness to the market 5.)Availability of Transport facilities 6.)Nuisance problems 7.)Suitability to the climate
Selecting General Area
Aspects Concerned with A.) Product/Service Preliminary 1.)Choice of product/service 2.) Technical characteristics of product/service 3.) Uses of Product / service B.) Marketing 1.) Consumer preferences 2.) Nature of competition 3.) Potential Aggregate demand 4.) Likely Share of project C.) Technical 1.) Location 2.) Scale of operation 3.) Manufacturing process 4.) Plant and Machinery 5.) Plant Layout 6.) Work Schedule D.) Financial 1.) Outlay of Financial Assets 2.) Current Assets 3.) Working Capital 4.) Short & Long term Finance 5.) Bills etc. E.) Economic 1.) Utility to society 2.) Employment Generation 3.) Ancillary Development 4.) Scope for Area development 5.) Social benefits F.) Financial Viability 1.) Costs and benefits 2.) Risk characteristics 3.) Viability G.) Profitability 1.) Revenues , Earnings 2.) Costs 3.) Profits 4.) Break Even Level of operation H.) Financial Projects 1.) Proforma Balance Sheets 2.) Sources and Uses of funds I.) Socio- Economic Desirability 1.) Social Goals 2.) Desirability of the project from the larger social angle 3.) Maximum Returns.
Aspects of a project
Production : Production mix so that over reliance on one product and one technology is avoided. Coping with the problem when technology of the buying unit changes. Marketing : Supplying to more than one unit and not becoming over dependent on only one. Coping with times when the larger buyer unit , itself is facing difficulties. Personnel : Mix of full time and part time personnel. Coping with availability and turnover and keeping wage costs low. Finance : Mix of own and borrowed funds. Coping with liquidity crisis and surivial needs.
Strategic Planning Mix Needed for an entrepreneur
Problems of SSI's
External : 1.)Infrastructural a.)Location b.)Power c.)Water d.)Communication 2.)Financial a.)Capital b.)Working Capital c.)Long- term funds d.)Recovery 3.)Marketing 4.)Taxation 5.)Raw Material finance 6.)Industrial & Financial regulations 7.)Inspections 8.)Technology
- Choice of an idea
- Feeble structure
- Faulty Planning
- Poor Project implementation
- Poor Management
- Poor Production
- Inadequate finance
- Labour Problems
- Capacity Utilisation
Factors Determining the amount of working capital 1.)Size of the SSI 2.)Process of production 3.)Proportion of raw materials to total cost 4.)Terms of purchase and sales 5.)Turnover of inventories 6.)Importance of Labour 7.)Cash requirements 8.)Banking facilities 9.)Scope of growth and expansion
Constituents of working capital 1.)Inventories including a.)Raw material b.)Work in progress c.)Finished goods d.)Stores and spares 2.)Debitors Include a.)Bills receivables and b.)Sundry Debtors 3.)Cash and bank balances 4.)Advance to suppliers of Raw Material 1.)Sundry Creditors 2.)Advances from customers 3.)Outstanding Expenses