---
title: "Steps to establish small scale unit"
subject: "Organization and Management"
chapter: 8
key: "semester_7/organization_and_management:entrepreneurship-small-scale-steps"
source: https://www.bctengineer.com/q/semester_7/organization_and_management/entrepreneurship-small-scale-steps
site: BCT Engineering
---

# Steps to establish small scale unit

Organization and Management · Chapter 8: Motivation, Leadership and Entrepreneurship

- Asked in: 2071 Shrawan, 3+5 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/organization_and_management/entrepreneurship-small-scale-steps
- Whole chapter: https://www.bctengineer.com/md/semester_7/organization_and_management/chapter-8

## Question

Define the term entrepreneurship and write the steps for establishing a small scale unit of entrepreneurship.

## Short answer

Entrepreneurship is identifying opportunities and organizing resources to start a venture. Steps: self-assess, generate and screen ideas, study market, check feasibility, write a business plan, register legally, arrange finance, set up site and machinery, recruit staff, trial production, market, and monitor growth.

## Answer

#### Entrepreneurship
Entrepreneurship is the process of identifying business opportunities, organizing resources and taking risks to start and run a new enterprise to create wealth and employment. It combines innovation, risk-taking and management.

#### Steps for establishing a small scale unit
1. **Self-assessment and idea generation:** Identify interests, skills and resources; collect business ideas from local needs, hobbies, market gaps and local raw materials.
2. **Opportunity identification and market study:** Study demand, customers, competition and price.
3. **Project selection and feasibility study:** Technical, market, financial and legal feasibility to select the best idea.
4. **Business plan:** Objectives, products, location, technology, staffing, marketing and financial plans.
5. **Legal formalities and registration:** Choose the form of ownership; register the firm with the Department of Industry / Office of Company Registrar / local government as per the Industrial Enterprises Act, 2076; get PAN/VAT, municipal license, and environmental and other permits.
6. **Arrangement of finance:** Own capital, bank loans (priority sector or concessional loans for small industries and the Youth Self-employment Fund), cooperatives, microfinance.
7. **Site selection and infrastructure:** Land, building, electricity, water and road access.
8. **Procurement of machinery and raw material:** Choose suppliers and install equipment.
9. **Recruitment and training of staff.**
10. **Production and trial run,** with quality control.
11. **Marketing and sales:** Branding, distribution, promotion and pricing.
12. **Monitoring, control and growth:** Review performance and improve.

```text
Idea -> Study -> Plan -> Register -> Finance
     -> Set up -> Staff -> Produce -> Market
```

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Entrepreneurship combines:
   A. Innovation, risk-taking and management
   B. Obedience, routine and supervision
   C. Only capital and land
   D. Only government support
   Answer: A. It is organising resources and taking risks to start a new enterprise. (Key point: Definition)

2. What is the correct early order of steps?
   A. Production, marketing, idea
   B. Idea generation, market study, feasibility study, business plan
   C. Registration, then idea, then market study
   D. Recruitment, then business plan
   Answer: B. Start with idea and self-assessment, then market study, feasibility and plan. (Key point: First steps)

3. Which set is covered in a feasibility study?
   A. Technical, market, financial and legal
   B. Only financial
   C. Only legal and political
   D. Social and religious
   Answer: A. Feasibility checks technical, market, financial and legal aspects to select the best idea. (Key point: Feasibility)

4. Under which kind of step does PAN/VAT, municipal licence and registration with the Department of Industry fall?
   A. Finance arrangement
   B. Legal formalities and registration
   C. Site selection
   D. Marketing
   Answer: B. These are legal formalities, done after the business plan and before finance. (Key point: Registration)

## Related in Organization and Management

- [Entrepreneurship and its characteristics](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Aentrepreneurship-characteristics) — Organization and Management, chapter 8, asked 2×
- [Define entrepreneurship](https://www.bctengineer.com/question.md?key=semester_7%2Forganization_and_management%3Aentrepreneurship-define) — Organization and Management, chapter 8

## Related in other subjects

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- [Small scale fading and influencing factors](https://www.bctengineer.com/question.md?key=semester_7%2Fwireless_communication%3Asmall-scale-fading-factors) — Wireless Communication, chapter 3