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After choosing the form of the business organisation the next
start up problem is the choice of the particular product or service to be
manufactured by the firm. It is an important decision because rest of the
challenges of setting up a business are based on the type of the product the
firm wants to produce. This decision can be taken through a comparative
analysis of the several products or services that the firm can provide. The
analysis involves assessing the size and structure of the market for the
products; determining the future demand pattern for each of them; comparing
their competitive positions in the market; graphing the life cycle of each
product; finding the shelf life of each product. The ease of availability of raw
materials, technology for production as well as the manpower are other
important determinants. Government policies and regulations can also help the
entrepreneur in taking the decision. Central Government and the State
Governments provide incentives for manufacture of certain products by small
scale units. The most important promotional measure being the reservation of
several products for exclusive manufacture by small scale industries.
Large/Medium units can, however, manufacture such reserved items
provided they undertake to export 50% or more of their production. Also,
there are some agencies and organisations which provide entrepreneurs with
the necessary information required in making a product choice. The
Commissionerates or Directorates of industries of different States provide
guidance to the entrepreneurs with respect to the particular State. An
entrepreneur can also study the industry clusters of India to get an idea
about the type of products best suited for production in particular areas.
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