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Unit 8: Setting up a Small Business Enterprise
As well as weight loss or gain the material index and weighting of transport costs can also take Notes
account of loss or gain in transport, of features such as perishability, fragility and hazard.
8.1.4 Need for Enterprise Location
The need for Plant Location arises under the following circumstances:
1. Whenever a new enterprise is to be established.
2. In the case of established enterprise, the need for enterprise location arises when expansion,
decentralization and diversification is undertaken to meet the increased demand for its
products.
3. When the existing factory is not in a position to obtain renewal of the lease.
4. Whenever an undesirable location is to be abandoned.
5. When the tendency of shifting the market, depletion of raw materials, changes in
transportation facilities, new processes requiring a different location are observed in a
factory.
6. When a new branch or branches are to be opened for increasing the volume of production
or distribution or both.
Steps in Enterprise Location:
1. Selection of the region
2. Selection of the locality or community
3. Selection of the exact site, and
4. Selection of an optimum site
Steps for starting a small enterprise:
1. Analyse yourself and your objectives
2. Date with yourself for newer ideas
3. Consult publications and agencies
4. Date with yourself for a decision
5. Choose a line
6. Decide on form of ownership (sole proprietary/partnership/cooperative/company
(private/public))
7. Decide whether to purchase a going concern or to start a new one.
Self Assessment
State whether the following statements are true or false:
1. A small enterprise or a factory or plant is an individual building or premises that produces
manufactured goods.
2. Industrial location is primarily not concerned with the setting of a single enterprise,
rather than the whole industry.
3. The area has a uniform culture, climate and political system.
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