Top 25 Entrepreneurship and Management of SME Concepts You Need To Know


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1) Techno-economic analysis – estimation of project demand potential and selection of optimal technology suitable for achieving project objectives.

2) Small scale industry – engaged in manufacturing, procession or preservation of goods in which investment in plant and machinery excluding the cost of land and building does not exceed Rs. 1.5 crore.

3) Ancillary industry – one which supplies 50 percent of its product to one or more parent units and engaged in the manufacture of parts, components, sub assemblies toolings, investment in plant and machinery can go up to Rs. 1 crore.

4) Tiny sector – investment in plant and machinery upto 25 lacs and includes artisans, khadi and village industries, handloom, handicrafts etc.

5) Small scale service – investment in fixed assets excluding land and building upto 10 lakhs

6) Merchandising – small scale unit do not undertake marketing activities but distribute and sell their products through large scale units. E.g. Hindustan Lever Limited distributes cosmetic and soaps produced by small firms.

7) Servicing – small firms assigned the job of repair and maintenance by large units e.g. digital equipment, personal computers, calculators etc.

8) Provisional registration – made in Form 4-A with District Industries Centre. Possible even when one is planning  to set up the unit. Enables to apply for power and water connection, apply for financial assistance to banks.

9) De-registration – if the unit remains closed for more than a year or refuses to give full and truthful information called upon by registering authority from time to time.

10) Single Window Loan Scheme – working capital not in excess of 10 lakhs and expenses upto 20 lakhs. Loan granted by State Finance Corporation and Small-Scale Industries Development Corporation.

11) Service agencies – to overcome the problem faced by small scale sector in getting their bills cleared.

12) Workmen Compensation Act – established in 1932 to provide payment by employers to their workmen as compensation of injury by accident with the installation of machinery operated by motive power.

13) Composite Loan Scheme – scheme operated by SIDE where the bank helps small borrower by providing working capital term loan through a single window to promote credit flow to small borrowers.

14) Cooperative form of organization – association of persons usually of limited means, voluntarily joined together to achieve a common economic end by formation of a democratically controlled organization.

15) Contents of project report –  Name, address of sponsoring agency, technical details, manpower requirement, total income, marketing of the project, salient features of the project.

16) Infrastructure facilities – background against which industrial units could stand. Government built roads for transport of goods, regular sufficient water supply and protection from polluted water.

17) Project report – summary of project planning prepared by experts. Serves as a base for feasibility studies and actual execution of a project. Deals with different aspects of proposed project.

18) SIDBI – locally owned subsidiary of IDBI. Main functions are refinance assistance, direct assistance, bills scheme.

19) SISI – provide technical and consultancy services to small scale industry. Provides promotion and extension services to small scale or ancillary and tiny units.

20) Venture capital – form of equity financing of projects with high risks and high return. Financing high technology projects. Helps to convert research and development projects into commercial production.

21) Seed capital – initial capital used to start a business, comes from the company founders personal assets or from friends and family, amount of money usually relatively small because business is still in the idea or conceptual stage.

22)  Value added tax – simple transparent tax collected on sale of goods. Introduced VAT in place of sales tax and related state taxes.

23) Entrepreneurial economics – study of entrepreneur and entrepreneurship within the economy. High levels of innovation combined with high level of entrepreneurship resulting in creation of new ventures and new sectors/industries.

24) Organization and delegation – hiring people to do specialized jobs. Requires extensive organization and delegation of tasks. Pay close attention to everything that goes on in their companies.

25) Risk and rewards – risks directly relates to rewards involved. Amount of time and money you invest in business.


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