AJRSH

AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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A STUDY ON PROBLEMS FACED BY ENTREPRENEURS OF SMALL

SCALE INDUSTRIES

S.SIVA*

*Lecturer, Department of Management Studies,
Achariya School of Business & Technology,
Puducherry.

ABSTRACT

The small scale sector produces a wide range of products, from simple consumer goods to
highly precision and sophisticated end-products. As ancillaries, they produce a variety of parts
and components required by the large enterprises. Entrepreneurs can be developed through the
practical application of entrepreneurship skills. As the study of this topic, would picturise the
problems faced by Entrepreneurs of small scale industries. A Sample design adopted was
purposive and convenience. The sample size selected for the study was 50. To analyze the data
is by using Descriptive analysis, using frequency, tables and graphs were attempted. Secondly,
Chi-Square test & T Test was used, to test for differences.

KEYWORDS: Price fixing, obstacles, sole trader, loan & advance.
______________________________________________________________________________
INTRODUCTION
Small Scale Enterprises always represented the model of socio-economic policies of
Government of India which emphasized judicious use of foreign exchange for import of capital
goods and inputs; labour intensive mode of production; employment generation; non-
concentration of diffusion of economic power in the hands of few (as in the case of big houses);
discouraging monopolistic practices of production and marketing; and finally effective
contribution to foreign exchange earning of the nation with low import-intensive operations. It
was also coupled with the policy of de-concentration of industrial activities in few geographical
centers.
The small scale sector produces a wide range of products, from simple consumer goods
to highly precision and sophisticated end-products. As ancillaries, they produce a variety of
parts and components required by the large enterprises. Small scale entrepreneurs faces very
many problems like financial assistance, inefficient arrangement for marketing and sales,
shortage of raw materials, stiff competition, high cost of production, low mobility, family
responsibilities, social attitudes, low ability to bear risk, shortage of finance and problems of
liquidity, etc. Even though they face many problems they still run successfully and stands as a
bench mark among other competitors. Unemployment problem everywhere is an ever-growing
problem which has several socio-economic repercussions that affects both the unemployed and
the society. Government makes efforts to mitigate the unemployment problem by creating
opportunities through Employment Programs.
AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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NEED OF THE STUDY

In the initial stages of economic development, entrepreneurs tend to have less initiatives
and drive. As development proceeds, they become more innovating and enthusiastic. Similarly,
when entrepreneurs are shy and humble the environment is underdeveloped. Business
environment becomes healthy and developed when entrepreneurs are innovating.
Starting and growing a business is like raising a child. It requires more time than every
one of us have per day. It needs nourishing, parenting, and all sacrifices. The business plan
which the business person trying to create and the market which he wants to build and goals to
achieve, are guaranteed to change and therefore entrepreneur must be flexible and prepared to
undergo those changes. No one starts life with any of the necessary qualities, skill, knowledge
and characteristics fully developed in order to be successful. Everything in business is
learnable. What Successful entrepreneurs have learned that can be everyone can learn as well.
Entrepreneurs can be developed through the practical application of entrepreneurship skills. As
the study of this topic, would picturise the problems faced by Entrepreneurs of small scale
industries. It is very much needed to develop skills, ability and empowerment. This paper made
an attempt to study in-depth relating to the entrepreneurs problems which he / she face in this
empirical world especially on, financial aspects, competition among them and lack of
information and so on.
OBJECTIVES OF THE STUDY
To find out the impact of socio economic factors on entrepreneurship development.
To identify the women entrepreneurs in the society.
To know the obstacles, which the entrepreneurs faced while starting the enterprise.
To understand problem in price fixing.
To identify the financial problems faced by entrepreneurs.
SCOPE OF THE STUDY
This study is based on the problems faced by entrepreneurs of small scale industries in
Puducherry. This study is conducted in Puducherry and in certain areas like Lawspet, Mohan
Nagar, Kadirkamam and also industrial estate like Mettupalayam industrial estate. Puducherry
is one of the fast developing state in India as well as in global scenario. Puducherry has both
men and women entrepreneurs. A Sample design adopted was purposive and convenience. The
sample size selected for the study was 50.
Primary data was collection through questionnaire for the study. To analyze the data is
by using Descriptive analysis, using frequency, tables and graphs were attempted. Secondly,
Chi-Square test & T Test was used, to test for differences.

AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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ENTREPRENEURS
Oxford English Dictionary (1947) defined entrepreneur as the director or a manager of
a public musical institution, one who gets-up entertainment, especially musical performance.
The concise Oxford English Dictionary defines entrepreneurship as Readiness, initiative, and
daring for an undertaking.
Cantillion, a French banker, defined entrepreneur as the agent who buys means of
production at certain prices in order to combine them into a product which is going to sell at
prices that are uncertain.
Alfred Marshall defined the term entrepreneurship in a comprehensive manner and
assigned risk-bearing and management as the main function of the entrepreneur.
According to Alfred Marshall entrepreneur is an individual who adventurous and
undertakes risks, who brings together the capital and labour required for the work: who
organizes or engineers its general plan and he superintendents its minor details.
ENTREPRENEURS OF MSMES IN PUDUCHERRY
TABLE 1 NUMBERS OF SMALL, MEDIUM, LARGE INDUSTRIES IN PUDUCHERRY
(REGION WISE) REGISTERED IN DIC
Sl.
No.
Item / Details Unit
Region wise
Puducherry Karaikal Mahe Yanam State
1
No. of Small Scale
Industries
Nos. 6014 893 245 293 7445
2
No. of Medium Scale
Industries
" 150 4 0 8 162
3
No. of Large Scale
Industries
" 56 10 1 3 70
4 Investment
Rs.in
Lakh.
156688 42297 765 9275 209025
5 Production " 1165483 70234 7734 50374 1293825
Source: Dept of Industries, Puducherry
The industrial sector employed 89296 persons. Now with Investment of Rs. 2, 09,023
lakhs industries are the life blood of economy. Puducherry has covered a significant hide for
AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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itself in the industrial map of our country. Though a small territory, just around 490sq.kms in
area, Puducherry is definitely not a State, as it is some time misunderstood.
INDUSTRIAL ESTATES
The Govt. of Puducherry had initially started three industrial estates in the Territory in
order to motivate the industrial development. Later a Corporation for industrial development has
been established in the year 1974 viz. Pondicherry Industrial Promotion, Development and
Investment Corporation (PIPDIC). Then the corporation has taken over the infrastructure
development for industrial promotion. Four industrial estates were developed and allotted to the
needy entrepreneurs.
TABLE 1.FREQUENCY DISTRIBUTION OF RESPONDENTS ON PERSONAL DATA
Sl.no Variable Category Frequency Percent
1 Gender
Male 47 94
Female 3 6
2 Age
25 35 yrs 19 38
35- 50yrs 22 44
50- 70yrs 8 16
Above 70yrs 1 2
3 Qualification
+2 19 38
UG 9 18
PG 8 16
Diploma 14 28
4 Type of business
Partnership 19 38
Sole trader 31 62
5
Type of business
own
Inherited 12 24
Started by self 35 70
Acquired from others 3 6
Source: Primary Data
AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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The above table show the frequency of the Respond in the study, there 94 % of
respondent are male and rest of only 6%. Entrepreneurs of 35 50yrs age groups are higher at
44%, Graduate entrepreneurs are low in Puducherry with 8%. And most of the entrepreneurs are
sole trader (62 %) they are along get profit.
GENDER AND HELP FROM HOME
Null hypothesis was constructed to evaluate whether there is association in opinion about
the getting help from home among the male & female entrepreneurs.
Ho:-There is no association between the getting help from home among male & female
entrepreneurs.
The calculated value of chi square is 8.341, dof =1. It is observed that the calculated
value is higher than the table value and the hypothesis is rejected. It shows that entrepreneurs get
enough cooperation from their family members.
PROBLEM IN PRICE FIXING AND BUSINESS OWNED BY ENTREPRENEURS
Null hypothesis was constructed to evaluate whether there is association in getting
problem in price fix among the business owned by the entrepreneurs (inherited, self start, acquire
from other).
Ho:-There is no association between the getting problems in price fix among the business
owned by the entrepreneurs.
The calculated value of chi square is 7.421, dof =2. It is observed that the calculated
value is higher than the table value and the hypothesis is rejected. It shows that entrepreneurs get
enough cooperation from their family members. It is noted that nearly 82% of people find it very
difficult to fix an economical and reasonable for their products especially entrepreneurs who
acquired business from other. 18 % of respondents find no problem in fixing price.
PROBLEM IN FINANCIAL ASSISTANCE AND REGULATORY AUTHORITY OF
THE ENTERPRISE
Null hypothesis was constructed to evaluate whether there is significance difference
problem in financial assistance and Regulatroy authority of the enterprise (DIC, PIPDIC) by T
test.
Ho:-There is significance difference problem in financial assistance among Regulatory
authority of the enterprise (DIC, PIPDIC)
Since the calculated value (2.381) is higher than the table value, it reveals that there is
difference the problem in financial assistance and regulatory authority of the enterprise.
Entrepreneurs under control of DIC & PIPDIC are free from the financial assistance problem.

AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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FINDINGS
With regard of the present age of the entrepreneur, it is found that many belong the
category of 25-35 (i.e.,) 38%. 44% belong to the age of 35-50. 18% belong to the age
group of above 50. Thus most of the entrepreneurs are of the middle age group in this
study.
Entrepreneurs start the enterprise in order to earn more. 20% belong to category of 5000-
10,000. 24% belong to 10,000 15,000. 226% belong to 15,000 20,000.
All entrepreneurs in the study are basically literate. Many has complete their post
graduation (i.e.,) with 16.38% have completed their secondary education, 18% have
completed their graduation, 28% have completed their primary or diploma courses.
About 38% of entrepreneurs start the enterprise as proprietorship, 62% of them were
doing as partnership deal.
Now most of the entrepreneurs have encouragement in their family which helps them in
governing the business well. 44% says that they have good support from their family
members and 56% says there is no proper response from their family.
Around 70% of the entrepreneurs running the business is of their first enterprise and only
30% was switching over to another business also.
Entrepreneurs were married at the younger age itself, so they have to play major role in
the business. 36% says wifes motivates them, 22% says that their father motivates, 20%
says that their mother motivates and 22% says that other influence them to start the
enterprise.
Every entrepreneur faces certain obstacles while starting the enterprise. 46% has the
problem of financial crisis, 12% has faced the problem where to contact and who to
contact, 6% has the problem of combining the family and work life 2% has the problem
of self-confidence and 32% says there is no obstacles to face by them.
All entrepreneurs have the problem of getting their financial assistance. 56% of
entrepreneurs feel that there is no proper assistance for getting their finance. 44% feels
there is no problem in getting finance due to the cooperation in the family.
Wife helps the husband in decision making process. 36% of entrepreneurs feel that wife
is the morale support in all the activity of their business. 34% says the mode of the work
depends on the decision making process and 28% says the family influence them in
decision making and 2% is based on the society.
All entrepreneurs advice other entrepreneurs to become entrepreneurs because they can
build their self-confidence, ability, power and also in upgrading the skills.

AJRSH
AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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SUGGESTIONS
The banks can provide loans with minimum rate of interest.
The young entrepreneurs could be encouraged to take up entrepreneurship, instead of
searching for a job. It will be better in case if the parents themselves encourage their sons
to take entrepreneurship.
The banks and other institutions could come little more forward to grant loans for
entrepreneurs to start their venture without much formalities as they do now, which has
led them to move on to the narrwaries.
Entrepreneur needs moral support in terms of financial assistance and guidance from the
Puducherry Government.
Based on the mode of work training program can be conducted to the entrepreneur.
CONCLUSION
With the amount of increase in the population, day-by-day the unemployment problem
seems to increase. Moreover due to the globalization, all the companies take only the very best
candidates which boosts to the increasing trend of competition that may lead to frustration to the
remaining candidates. The only optimistic way to overcome the current situation is to move on
to entrepreneurship, which helps themselves and others. Entrepreneurs are now in a situation to
work on par with men. If the facilities and encouragement, that are available to men, are also
given to entrepreneur, they will also produce good results. Therefore the government, the
various institutions should help entrepreneurs not in papers and acts, but in reality. In this way
entrepreneurs could be benefited and also make so many people bear its fruits.
REFERENCE
1. Entrepreneurial Development - S.S. Khanka S.Chand & Company Ltd., New Delhi.
2. Principles of Management & Entrepreneurship Development W. Haynes.
3. Entrepreneurship Development (Programme & Practice) J asmer Singh Saini.
4. Entrepreneurial Development C.B. Gupta & N.P. Srinivasan Sultan Chand & Sons.,
New Delhi.
5. J ohn Humphery & Hubert Schmitz, Principles for promoting clusters & networks of
SMEs, No. 1, Discussion Paper, UNIDO (SME Programs), October, 1995,Kaniska
Publishes
6. Nanjundan. S, The Re-emphasis on Small Enterprises, A Review Article, Translation by
L.W. Beck (Indianapolis: Bobbs merrily, 1959).
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AsianJournalofResearchinSocialScience&Humanities
Vol.2Issue4,April2012,ISSN22497315

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7. Research Methodology C. R. Kothari, New Age International (p) Lt Publishers, 2008

8. Tendler J udith and Monica Alves, Small Firms and their helpers: Lessons on Demand.
WEBSITES
1. www.PIPDIC.com
2. www.Industry pondicherry.com.