Guidelines to start a small scale business :
Study the following case/situation and express your opinion:
Mr. Rahim is keenly interested in starting Small Scale business. But he is worried about the challenges before Small Scale business. Guide him about the solutions to face these challenges.
1. Guidelines to start a small scale business:
1 Answers
1. Method of Production : It is said that small scale industries use old methods of production Mr. Rahim can improve the method of production by using new technology. He can purchase the new technology at affordable rate and give training to the workers so that they can improve the skills and in turn increase the production.
2. Finance : Rahim can get information about various schemes given by government to raise finance. He can also compare the rate of interest of various financial institutes and take loan at a lower rate of interest.
3. Raw Material : Rahim can start business in area near by to the availability of raw material so that he can save the cost of transportation of raw material. If the cost of raw material decreases he will not have to compromise on the quantity and quality of raw material.
4. Labour Problem : Rahim can give training to the workers so that they can increase the productivity. Skilled workers can work more efficiently. Rahim should also provide with job security so that workers do not leave the job and experienced workers can increase productivity
5. Marketing Problem : Rahim should have thorough study of need of the customer in the market. He should have all market updates so that he can make changes according to the requirement of customers. He can do market survey with use of latest technology i.e. Internet and WhatsApp. He can make use of these technology for advertising of his product also.
6. Transportation : As stated in point no. (c) Rahim can start business in area nearby to the availability of raw material so that he can save the cost of transportation of raw material. He can also keep the cost of the product less and then add the cost of transportation afterwards so that cost of his product will look less.
7. Sickness : Rahim will have to take care of the credit system which he is going to follow. It is advisable that he sells the goods on cash basis and not on credit basis. If he gives it on credit he should be good at follow up. While purchasing raw material he can take it on credit basis so that he gets adequate working capital to use. If he gets sufficient working capital he can produce goods on time and the industry will not become sick.
8. Globalisation : Rahim is to be aware about the various competitive products and other similar products which are there in the market. He will have to be updated with the latest things and latest prices and make changes in his small unit regularly as and when required.