The next step is to decide what business to venture into, the product or range of products that shall be taken up for manufacture and in what quantity.  The level of activity helps in deciding size of business and form of ownership.  One could generate a number of project ideas through environmental scanning, then short list a few items, closely examine each one of these and zero in on to a final product(s).

It is easy to manufacture an item but difficult to sell; so it is prudent to survey the market before embarking upon production and ensure the product chosen is in sufficient demand; ascertain changes in product design required; determine demand-supply lag, extent of competition, potential share of the market, pricing and distribution policy etc.  The principle is to produce what people demand in a form and quantity that can be easily sold.

A firm can be constituted as Proprietorship, Partnership, Limited Company (Public or Private), Co-operative Society etc.  This will depend upon the type, purpose and size of your business. One may also decide on the form of ownership based on resources on hand or from the point of saving on taxes.

The next step will be decided on the place where the unit is to be located.  Will it be hired or owned? The size of plot, covered and open area and the suitability of site will have to be decided.  The location can even be your own residence subject to No-objection Certificate from Municipal Corporation/Local Body. The Industry can be located based on availability of skills, resources or market. Foot-loose Industries can be established anywhere.

To manufacture any item various processes are available.  Information on all these available technologies should be collected and the best one identified.  This will be useful in determining the machinery and equipment to be installed. It makes business sense to choose that technology which gives least cost of production/unit unless there are other parameters.

Having chosen the technology, the machinery and equipment required for manufacturing the chosen product(s) have to be decided, suppliers identified and their cost estimated: One may have to plan well in advance for machinery and equipment, especially if it has to be procured from outside the town, state or country (that is, whether to be imported).  The machinery configuration should be such as to ensure the desired level and quality of production.

After deciding on the form of Ownership, location, technology for manufacturing, machinery and equipment, one is ready to prepare a feasibility study or one's Project Report.  The economic viability and technical feasibility of the product selected has to be established through a project report.  A Project Report that may now be prepared will be helpful in formulating the financial, production, marketing and management plans.  It will also be useful in obtaining finance, shed, power registration, raw material and other resources.

An entrepreneur has to take certain steps and follow specified procedures to obtain Institutional finance.  A number of financial agencies like Banks/SFCs provide loans with certain applicable terms and conditions.

Having prepared a project report the entrepreneur may like to get the unit registered.  This requires submitting an application in the prescribed form for filing of EM at local DIC.  This is not mandatory but desirable, as it will enable you to avail of various Government subsidies and incentives and assistance from NSIC or SFC.

In quite a few cases technical know-how may have to be arranged.  This can be done through TCO, NSIC, SSIDC, Private Consultants, MSME-DI, foreign collaborators or even machinery suppliers.  Facilities are available to MSMEs for making variety of technical know-how arrangements, including turnkey jobs.

The site chosen should either have adequate power connection in the desired form or this should be arranged now.  One can calculate the total power requirement, voltage and phases (single or three).  Determine the nearest pole from which power will be given to you as it can materially alter installation cost.

Having arranged finance, work shed, power etc. the next step is to procure machinery and begin its installation.  This should preferably be as per plant layout.

Once the machines are installed manpower will be required to run them.  So finally determine the type (skilled, semi-skilled, unskilled, administrative etc.) of labour required, source of obtaining identified labour and recruit them.  Possibly labour has to be trained either at the entrepreneur's premises or in a training establishment.

The labour will require raw materials to work upon the Installed machines. Raw materials required may be available indigenously or, may have to be Imported, Government agencies can assist if raw material required are scarce or imported.

The establishment should have an Organisational set up.  That is, the structure of the manpower employed must be determined.  This will ensure smooth and effective running of the unit. There should not be any wastage of manpower, material or machine capacity installed.  If items produced are exported then the product and its packaging must be appropriate.

Trial production helps in tackling problems confronted in production and test marketing of the product(s).  This reduces chances of losses in the eventuality of mistakes in project conception.  Only after successfully launching the product should the commercial production be commenced.

The process of determining likely markets, product design, selling, after-sales service, feedback and meeting changing customer demand is called marketing strategy.  Various aspects like -  how to reach the customer, distribution channels, commission structure, pricing advertising/publicity etc. would have been decided upon at market survey/project formulation stage.  Firm up arrangement for introducing the product in the market and making it known to likely buyers.

Test marketing saves the enterprise from going into disrepute just in case product launched has deficiencies in the customer's perception.  It will also assist in carrying out modifications/additions in design/characteristics/features of the product.

Having successfully test marketed the product(s) commercial marketing can be undertaken.

After or at times before marketing the product, Quality Certification like BIS, 'Q' Mark, Agmark etc. ( depending upon the product(s) ) should be obtained.  If there are no quality standards specified for the product(s) the entrepreneur should evolve his/her own quality control parameter; quality and not price, after all ensures long-term success.

Once the unit is in regular production and marketing, one may file Part-II of EM.  Now that the unit is in operation one can steadily tackle the formalities involved.

Once the product or service is introduced in the market, there is a need for continuous market research to assess needs and areas for modification, upgradation and growth. Market becomes the Waterloo for most MSMEs as they ignore this vital day-to-day operation.  Initial success should not lull you into a sense of complacency. Keep your eyes and ears close to the battle scene, the market.

Periodical monitoring and evaluation of production, quality, marketing and profitability helps in knowing where the firm stands in comparison to performance envisaged in the project report.  It also identifies direction of future growth, product upgradation and product mix.

By taking up the activities explained in the above steps, one can ensure the successful setting up of a micro/small or medium Enterprise.  It is equally or more important to ensure its health and subsequent growth through diversification, modernisation (or even rehabilitation, if unit becomes sick) and expansion.  Quite possibly, there may be need for subsequent training of the Owner Entrepreneur or his workers in areas like production, packaging, quality control, testing techniques, computers etc. Setting up of the enterprise is the first step for creation or wealth and contributing to the development of our Nation.

Wishing you success in your entrepreneurial endeavors.