The definition for small industry is: If the investment on plant and machineries is less than 50 Lakh for a service organization and 5 crores for production organization. Generally the sizes of these industries are from 2 employees to 25 employees. There are lakhs of such small industries available in India. For example: Automobile component manufacturers, small fabrication units, security services, small institutes, small shops, small hotels, small hospitals etc. The small industry grows from one man to 25 employees easily. After certain period the small industry does not grow. The remain small industry for ever. Sometime, it comes down. This article analyzes the problems faced by such small entrepreneurs and providing successful solution.

The problems faced by the small industries are:

  • Frequent resignation of employees.
  • Not able to pay salary on time.
  • Not able to get more orders.
  • Collecting money from the customer is very difficult.
  • Many technical reworks / rejections.
  • Struggling to take salary for the business owner.
  • Facing heavy competition
  • Tension and frustration for the business owners
  • Few cases, planning to close down the business and go for the a job.

The common mistakes by any small industries are:

  • Authoritative leadership
  • Do not bother about the organizational work culture.
  • Generally negative work culture
  • Poor sales strategies and methods.
  • No or little training to sales persons
  • No preparation for negotiations
  • No professional method of collection of payments from the customers.
  • No clarity on assets and liabilities.
  • Spending more money on liabilities.
  • No or little money spent on investments.
  • No or little employee engagement.
  • Treating employee unprofessionally.

The solution:

Government is taking many useful initiatives to make small industries to grow. In spite of that they are not growing. If we address the following  No1 issue, the small industries will definitely grow.

Shift from self-employed mindset to business mind set

Every small industry starts from the owner. The owner who identify the product/service, market, execute, deliver and collect payment. He is thinking that he is doing business. But this is not business, this is self employment. As the business grows, the business owner manage his work by doing hardwork and some time employ new employees. He is very much interested to keep him very busy. This is due to self employed mindset. The characteristics of self employed mindset are:

  • Nobody can do this except me.
  • Perfection is very important.
  • Work hard to get more money
  • Believe on luck.
  • Employee will cheat me.
  • Business is risky

What is business mindset: Business mindset is that the business owners completely delegates his work and manage the business from outside by establishing processes and systems. The characteristics of business mindset are:

  • Systems and process should take over the business.
  • Delegate the work.
  • Progress with better than perfection
  • Believe in trick not on the luck
  • I work to improve the life of others.
  • Business is like a game.


All the small industry can be made to grow by changing the midset of the business owner. Without changing the mindset, even by providing incentives, loans cannot make them to grow. There should be a structured training required for the small entrepreneur to shift his mindset from self-employed mindset to business mindset.

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