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ENTREPRENEURIAL

PERFORMANCE AND RISK


PERCEPTION

AN ANALYSIS ON SMALL
FOOD PROCESSING UNITS
INTRO…..
• The Food Processing Industry (FPI) in India is one of the
largest in terms of production,consumption,export and growth
prospects.

• In FPI,Small Scale Industries (SSIs) account for 33% and are


dominating the lower end of the food chain.

• Most of the fruit,vegetables,spice processing units fall in the


small scale sector.

• SSIs are believed to provide more employment and earning


opportunities for unskilled workers .
• There are 3.46 million SSIs producing goods in India.

• Small-scale units accounted for about 40%of the gross turnover in the
manufacturing sector and 35%of total exports.

• Entrepreneurial performance is of great importance in designing an


action plan for industrial development at the macro level.

• This study is helpful to design an appropriate action plan.

• The present paper attempts to study the entrepreneurial performance


and risk perceptions of SSIs involved in food processing in Coimbatore
district of Tamil Nadu.
OBJECTIVES…
• To know the socio-economic background of small food processing
entrepreneurs.

• To examine the determinants of entrepreneurial performance.

• To study the risk perception of the entrepreneurs.


METHODOLOGY…
• The study is basically descriptive combined with analytical research
using primary data.

• Nearly 50 SSIs were selected by simple random method,during the


year 2003-04.

• Percentage analysis was used to study the socio-economic variables.

• Chi-square test was used to judge the significance.

• Multiple regression analysis was used to examine the entrepreneurial


performance of sample units.

• Entrepreneurial performance is measured in terms of Entrepreneurial


Benefits Cost ratio (EBC).
• There are two types of risk variables were included:

• Functional risk:
 Poor financial condition
 Low skilled worker
 High distribution cost
 Market concentration market selectivity
 Partnership problem

• Business risk:
 Entry of large players
 Technical obsolescence
 Export opportunity
 Government policy
 Poor quality perception
RESULTS
&DISCUSSION
The information would help in formulating proper strategy for
entrepreneurial developmment.

• Age of the entrepreneur :

• The age group of the respondents would influence the


entrepreneurial development.

• 54% of sample entrepreneurs were in the age group of 41-


55 years,and 14%of owners were with above 55 years.
• Educational qualifications:

• Level of education of the individuals has in general,a positive


with adoption of technology.

SL.NO EDUCATION ENTREPRENEURS

1. Primary 21(42.00)

2. Secondary 22(44.00)

3. Collegiate 7(14.00)

Total 50(100.00)
• Gender wise entrepreneur:

• Gender-wise classification of the entrepreneurs revealed that


24%of the sample were woman.
• Less risk and lesser investment would be the reason.

• Experience of the entrepreneur:

• It influence the organisation performance.


• It was inferred from the chi-square analysis.
• Earlier experience of the owner influence the business viability.
PROFILE OF THE
SAMPLE UNITS…
• Ownership type:

• It influence the functioning of units and access of external


finance.
• There are two types Sole proprietorship and partnership.
• Capacity utilisation:

• It is directly associated with the profitability of the units.


• It was observed that maximum(66%)sample units utilized less
than 75% of their capacity.
• Reason for underutilisation:

SL.NO REASONS ENTREPRENEURS


1. Inadequate finance 21(42.00)
2. Lack of demand 15(30.00)
3. Nonavailability of 8(16.00)
skilled persons
4. Others 6(12.00)
TOTAL 50(100.00)
• Entrepreneurial Benefits Cost Ratio:

SL.NO EBC ENTREPRENEURS


1. <1 7(14.00)
2. 1-5 34(68.00)
3. >5 9(18.00)
TOTAL 50(100.00)
CONCLUSIONS..
• 14% of the entrepreneurs are with graduate level of education.

• 24% of the entrepreneurs are womrn.

• 66%of the sample units are utilising less than 75%of the capacity of
their units.

• Inadequate finance and lack of demand for the products are major
reasons for underutilisation.

• Poor financial condition and unavailability of working capital are the


important functional risk,and has positive correlation with EBC.
SUGGESTIONS..
• Suggested for separate credit policy interventions regarding cost of
capital in institutional credit.

• Reviewing the procedures for accessibility of institutional finance


adequately and timely.

• Reformulate the policies and programmes regarding raw materials.

• Suggested for packaging technology to entrepreneurs so that they can


use these materials for packing their product.

• It is suggested for food parks for betteraccess of resources like raw


materials,fuels,etc,for sustained entrepreneurial performance.
THANK YOU..