START UP FAILURE- MORE RELATED TO POLICY ERROR
THE SUCCESS RATE OF START UP UNITS IS LESS THAN 25% AS THE GOVERNMENT IS INSISTING THAT THE UNITS SHOULD BE START UP(NEW UNIT). IN THE PROCESS IT IS IGNORING UNITS WHICH HAVE STARTED EVEN WITHOUT ANY SUPPORT FROM GOVT OR BANKS. THEY ARE REAL ENTREPRENEURS AND IF SUPPORTED CAN BE HIGHLY SUCCESSFUL. PRESENTLY ONLY 10% OF EXISTING MICRO UNITS HAVE BANK'S SUPPORT.BALANCE 90% ARE LEFT TO FEND FOR THEMSELVES. IF START UPS ARE IDENTIFIED FROM THEM THEN THE SUCCESS RATE WILL BE OVER 90%.
IF A START UP UNIT FAILS NOT ONLY THE MONEY INVESTED IS DRAINED BUT ALSO THE CARRIER OF THE FAILED ENTREPRENEUR IS RUINED. HENCE UTMOST CARE SHOULD BE TAKEN WHILE FUNDING START UPS. more
IF A START UP UNIT FAILS NOT ONLY THE MONEY INVESTED IS DRAINED BUT ALSO THE CARRIER OF THE FAILED ENTREPRENEUR IS RUINED. HENCE UTMOST CARE SHOULD BE TAKEN WHILE FUNDING START UPS. more
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One of the basic reason for failure is that the value of money over the period has eroded, where as the Banks and Financial institutions still count in rupees. e.g. In 1993 on a turn over of 40 Lakh I was able to employ 30 workers. Today even on 4CR you can not afford that. At that time the bank sanctioned 3,5 lakh as CC limit happily. Today to support 4 Cr turn over bank may have to sanction may be at-least 2.0 CR. They are scared, the banks have not grown. How the Industry will grow. The banks are happy with small lending for CARS, Housing ( protected lending ), personal loans ( heavy interest lending ). Where are they doing the jobs they are supposed to do? Even the national banks evade lending to small scale. NSIC lends against bank guarantee? Indra Gandhi had Nationalized the banks with a good objective. That objective is forgotten. In the years to come if the policies remain as they are, THE SMALL INDUSTRY WILL STAND KILLED. Better plan BIG now. more
Dec 29
As Mr. Jayakumar said it TRUELY. The word Start Up unit itself is an unique in nature and means really as START UP and how do you expect to provide IT Returns/other tax returns to the bank for financial support. The failure of all start up is mainly because of lacking the basic and strategic planning of implementation of such policy of the Govt. more
Dec 17
It is not understood as to why CII, ASSOCHAM, PHD Chamber and other Industrial Associations are not insisting to strengthen SIDBI as a nodal financing authority. As the name implies SIDBI stands to promote SME units prospective and existing both. SIDBI must have branches under the umbrella of District Trade and Industries Centers in each District. If it is done, no one can stop the development of SMEs. MFIs/ MUDRA are all eye wash to play political Games and to fool the voters. more
Dec 13
