Page 113 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes Small business has played an important role in Indian history. It practically flourished in almost
all corners: Calcutta, Surat, Madras, Bombay and penetrated into the roots of Indian soil. The
standards of their products and services were in however, not often maintained. This directed
efforts towards the need to protect the consumer. Gradually, small business became the source
of spreading civilization to all four corners of the then known world. With highly specialized
skills and opportunities, Indian products were the center of attraction at home as well as and
ruled in some of its business activities till the 18th century. A country, which was known for its
formidable industrial base till the late 18th century, suffered irretrievably, during the colonial
rule.

8.1 Steps for Starting a Small Enterprise

Location of enterprise is concerned with the least cost location, so that again transport costs are
a crucial element in the location decision. A German economist, Alfred Weber devised the
theory of industrial location, in 1909. In the early part of the industrial revolution factories
developed in areas that were already producing manufactured goods. These were the places
where woolen textiles were produced in farmhouses on farms that bred the sheep. The shift was
from the farmhouse to a mill, in the same area. By chance many of these textile mills were on
coalfields, so that when the shift from water powered to steam coal powered mills occurred, the
transition was in the same place. The same thing happened as steel production was also shifted
from local forges to coal powered mills.
The early industrial revolution saw mills and factories develop on coalfields, and remain
entrenched there for more than a century. By the end of the 19th century, these raw material
locations were losing their ascendancy. At the beginning of the industrial revolution roads were
of poor quality and slow. Canals were rapidly constructed to move heavy industrial materials,
but nowhere did these form a really convenient network. It was the development of railways
into extensive networks by the end of the 19th century, which enabled industrial location to free
itself from raw material sites. This trend continued with roads and vehicles in the twentieth
century, but water transport and especially the sea, remained dominant for long distance transport
of industrial goods. Weber’s analysis came at the point where railway networks had developed
to their ultimate extent. He was therefore concerned with the balance of location between raw
material site, the market for manufactured goods, and transport. What is meant by a Small
enterprise? A small enterprise or a factory or plant is an individual building or premises that
produces manufactured goods.

Caselet An Uptick in Small Business Loans from Big Banks

common complaint in the years since the financial crisis began has been that
Wall Street banks that were bailed out by the federal government haven’t been
Alending enough to Main Street businesses. Critics may now have a little less
reason to beef, however, because last month big banks approved small business loans at
the highest rate in more than two years, according to an index compiled by a business-
lending middleman.

Biz2Credit, which Bloomberg Business week profiled in October, calculates its monthly
Small Business Lending Index using 1,000 loan applications made over its online lending
platform. The index defines large banks as those with $10 billion or more in assets; it also
includes data for small banks, credit unions, and alternative lenders. Biz2Credit doesn’t
break out lenders by name in its data.
Contd...

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