Steps Involved In Setting Up Of An Enterprise


1. Selection of form of organization

2. Finding a proper business opportunity
a. Consider various opportunities
b. Consider risk factors involved therein.
c. Whether finance will be available for that or not.
d. Gathering necessary information about the activity.
e. Thus doing a feasibility study of the business.

3. Deciding size of the firm: it depends upon factors such as:
a. Financial
b. Technical (capacity to go into R&D)
c. Marketing
d. Managerial
e. In short the size of the firm should be optimum which will offer maximum output at lowest cost of production.

4. Deciding the location
a. Easy availability of raw material and labour
b. Proper supply of water
c. Approachable market area
d. Developed infrastructure
e. Availability of banking and warehouse facility
f. Concessions offered by the government

5. Arranging for machinery and equipments
a. Machinery having latest technology
b. Quality of production
c. Cost of production
d. Maintenance required to the machinery
6. Planning finances

7. Arranging different facilities.
a. Water
b. Electricity
c. Disposal of waste
d. Installation of machinery
e. Proper maintenance of machinery
f. Uninterrupted supply of raw material

8. Completion of legal formalities
a. Getting sanction from financial institutions
b. Preparation of documents such as partnership deed, MOU Etc.
c. Registration with departments such as sales tax authority, excise department etc.

9. Designing internal organization structure
a. Arrangement of all activities
b. Departmentalization
c. Chain of command
d. Span of control
e. Division of work
f. Delegation of authority
g. Coordination among various departments

10. Manpower requirement
a. Meeting manpower requirement
b. Deciding their pay scales

11. Launching the enterprise proper
a. Acquisition of land
b. Construction of building
c. Setting up office
d. Purchasing of plant and machinery
e. Conduct of production on trial basis

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