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Any business firm, company or concern investing resources in some economic activities for profit motive is called an enterprise. It consists of agricultural activities, service activities etc. The five main M’s of an enterprise are man, material, money, method, and management. For a better enterprise, above M’s are very important. The business can be classified on the basis of size of capital, nature of business and production orientation.
Some of the enterprises which are based on capital are listed and explained below:
Micro enterprises: The micro-enterprises are the industries which generally have capital investment up to 200,000 and based on local resources.
Cottage industries: This is another type of industry which is based on local skills and resources. For cottage industries, there is no limitation of the investment of capital. This industry is very much suitable for the local people. Some of the examples of cottage industries are handicraft, carpet, Pashmina etc.
Small scale industries: This is another enterprise which has capital investment up to Rs 50,000,000. It is larger than micro-enterprise and cottage industries.
Medium scale industries: This is another type of enterprise which includes industries which have investment more than 5 crores but less than 15 crores. This industry is larger than small scale industries.
Large scale industries: These industries have the capital investment of more than 15 crores. This is the largest industries among the industries in enterprises.
Enterprises can be divided into two categories based on the nature of works, which are:
Services oriented enterprise: This type of enterprise provides specific services to people and the society. Some of the examples for service oriented enterprises are health services, teaching, telecommunication services. This enterprise provides quality services to the people and makes profit.
Production oriented enterprise: This is another type of enterprise which manufacture intermediary or finished goods. It includes vegetable farming, knitting, weaving, shoe making etc. and makes profit by supplying those goods to market.
Local people have labour and potentiality to do different and new kinds of activities and also be engaged in some income generating activities but local people can't invest a big amount of money for their businesses. For that kind of local people, small and cottage industries are very suitable.
Reason for the preference of micro enterprises and cottage industries are as follows:
Best suited enterprises at local level
Some of the enterprises based on local resources and indigenous skill are listed and explained below:
Agro-processing: In this category, dairy industries, jam, jelly, squash, napkin industries etc. can be placed.
Non-timber forest production: This enterprise is based on bamboos, canes, fibers and herbal sanitary products. Herbal medicines, incense sticks etc. fall in this category.
Culture and traditional knowledge based: Wooden crafts, stone crafts, Nepali paper crafts, metal crafts, painting, hosiery, pashmina, carpet etc. fall in this category.
Service oriented: Repairing of tools and equipment, tailoring, Aran, tea-shops, material and food services, tourist guides, health services are the services industry in this category.
Many kinds of industries are suitable for local communities as described above, but it would be very difficult to select one of them for the business. Demand can be the golden rule for selection of an appropriate enterprise. For choosing an enterprise, following questions need to be answered:
In the above questions, if the answer is 'yes', then you can select that enterprise, otherwise, you can try the other until you obtain positive reasons.
Business Plans for Establishing an Industry
The formal document which contains the information required to know the details about the business before starting the business is known as a business plan. These plans depend on the type and size of enterprises.
Some of the basic elements of business plans are as follows:
1.Raw materials: The volume, types, source, quantity and cost of raw materials required for the enterprise.
2. Location: Transportation, supplies, power, availability of water, labors etc.
3. Background/context: Objective and importance of the business.
4. Machinery and equipment: Their sources, quality, quantity, name, and sources.
5. Market: A business plan should reflect the potential market places for the produced goods from the enterprise.
6. Investment capital: What amount of money has to be invested should be known in advance. A proper costing of business setup cost should be assessed.
7. Profitability: Business plan should reflect annual production and turnover. Break-even, pay-back period, and pricing should be calculated to get targeted profit.
8. Quality control:Entrepreneur shouldn't compromise in the quality of the produced goods to compete with other goods in the market. A business plan should show how the quality is maintained.
9. Schedule and Checklist: All the activities and tasks to be carried out for business establishment should be scheduled.
10. Production process: Capacity, shifts, process flow should be mentioned. If the production can't meet the demand in the market, it can't sustain.
The following aspects should be considered in the management of an enterprise. Some of the important aspects are as follows:
Any business firm, company or concern investing resources in some economic activities for profit motive is called an enterprise.
The five main M’s of the enterprise are man, material, money, method, and management.
Possible enterprises at the local level :
Local people have the potentiality to do different kinds of activities and are engaged in income generating activities. But, the local people can't invest a big amount of money for their businesses. For that kind of local people, small and cottage industries are very suitable.
Reasons for the preference of micro enterprises and cottage industries are as follows:
The formal document which contains the detailed information required about the business before starting the business is known as a business plan.
Any business firm, company or concern investing resources in some economic activities for profit motive is called an _____.
Business can be classified into ______________ types.
Micro-enterprises are the industries which generally have capital investment up to _________ .
Enterprise which has capital investment up to Rs 50,000,000 is called ________________:
Enterprises can be divided into ___ categories.
A small investment can start ___________industry.
This enterprise based on bamboos and canes, fiber and herbal sanitary products, herbal medicines, incense sticks etc is known as ________________.
The formal document which contains the information required to know details about the business, before starting the business is known as _______ .
Industries which have investment more than 5 crores but less than 15 crores are called ________________.