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 Small Scale Industries
Choose Your Enterprise
  Success Stories
  Selecting Your Product:

The selection of the product is dependant on your capital investment capacity:

  • Before embarking on any business venture, it is essential that you know whether there is a need for what you intend to produce, the profit margin, production capacity and the time of return on capital investment.
  • Depending on your capacity to raise resources, you can start :

Tiny Units

Units located in rural or backward areas with a population not exceeding 50,000 as per 1991 census, and an investment in plant and machinery of up to Rs. 25 lakhs.

Small Scale Industrial Undertaking

These are units where the investment on fixed assets (plants and machinery), does not exceed Rs. 100 lakhs.

Small Scale Service Establishment

Service-oriented enterprises are those with an investment in plant and machinery not exceeding Rs. 5 lakhs, and which are located in rural areas and towns with a maximum population of up to 5 lakhs.

Today, 820 products have been reserved for production only by businesses in the small scale sector.

You should take into account the following before setting up your business:

  • Any relevant experience you may have
  • Your aptitude for the specific business
  • Your education, technical qualifications, or any training you have undergone
  • Market demand for the product
  • The presence of any large enterprises nearby which might effect your choice of product
  • The potential profitability of your business
  • Availability of raw materials and other inputs
  • Availability of technical know-how and process details
  • Competition from businesses making similar products

The office of the Development Commissioner, Small Scale Industries has brought out a publication entitled Project Profiles in three volumes, and has a monthly publication called Laghu Udyog Samachar. These can be very useful when you are selecting your product.


You can consult the technical experts available at the various Small Industries Service Institutes and Branch Institutes, or contact the nearest District Industries Centre located in the district headquarters for preliminary consultations in this regard.


For some businesses, the location is very important. When you are choosing a location, remember to take into account the following:

You should pick a location close to your source of raw material, and close to the market where you want to sell your product.

  • The location should have a good transportation system. This will cut down your costs when getting your raw materials and when you are taking your products to market.
  • In some areas, there are incentives and concessions available to help set up industries.
  • Find out about the climatic, geographical and environmental factors that could affect your industry or the transport system.
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