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5 Things Every Entrepreneur Must Consider While Starting A Production Unit

Business5 Things Every Entrepreneur Must Consider While Starting A Production Unit

A profitable manufacturing business requires time, energy, and resources management that is reliable and profitable and can be accomplished through advanced administrative and leadership skills. An enterprise’s production unit’s effective and efficient management is a critical factor in profitability since a high-quality product offers a better position on the market that eventually contributes to profit and growth.

Management is a broad word that usually means “to organize and manage tasks and resources properly to achieve the desired objectives and objectives.” A sound management system is, therefore, a fundamental necessity of a production unit.

Following Legal Compliances

It concerns legal enforcement by the different laws applicable to the entity:

Act Companies– Filing annual financial statements, annual reports, various statutory forms and audit records, board meetings, etc. and performing a statutory audit in compliance with the Companies Act in case of private limited company registration.

Labor laws – Compliance with the law on payment of the gratuity, wages, and complying with the Temporary PF Act for Workers, the Employees ‘ State Insurance Act, the Compensation Law on payment of employee benefits, the Act on Industrial Disputes, etc.

Additional legislation– Review of conditions in various other agency laws such as the Money Laundering Act, the Competition Act, the Manufacturing Act, the Indian Contract Act, etc.

Managing Operations

The method of continuous control and enhancement of the production process. This contains the following:

  • Management processes such as total quality management, Six Sigmas, etc. concentrating on enhancing operating performance, product quality, cost reduction, and profit;
  • Standardization of activities by use of new technologies and their periodic analysis rather than year-end analysis;
  • Periodic manufacturing methods review to reduce waste;
  • Proper segregation of employee responsibilities and the proper management of project teams;
  • Supply chain management to concentrate on cost savings and deliver goods to customers more efficiently. It connects output, shipment, and distribution of goods by tracking inventories, domestic demand, distribution and sales.
  • Time management for maintaining operating productivity as idle time can be very detrimental to a production unit.

Following Tax Compliances

The following two forms of tax enforcement are included:

  • Direct tax, i.e., compliance by filing an income tax return on time.
    • Charge, as applicable, of legislative duties such as TDS (source tax) and TCS (source tax);
    • Quarterly monitoring of TDS returns;
    • Advance tax liability payment;
    • Reporting income tax returns and performing a tax audit by referring to professional tax consultants or Chartered Accountants.
    • Filing of other forms of income tax as applicable to the company.
  • Indirect tax, i.e., compliance with GST (goods and service tax)
    • Payment of the responsibility for GST;
    • Filing monthly or quarterly GST returns by visiting www.gst.gov.in on or before the due date, if applicable;
    • Conduct a GST audit on or before the due date.

Managing Finances Better

This is the method of controlling the efficient flow of funds needed to run the business. This contains the following:

  • Working capital management allows a company’s cash flow to meet its short-term debt and operating costs. It aims to use a company’s resources more effectively;
  • Budget plan for productive expenditure of financial capital. It is an internal management method for forecasting revenue and spending over some time and needs to be regularly reassessed;
  • Short-term and long-term financing: short-term financing needs can be met by commercial credits, banks’ loans (loans, overdraft, cash loans), consumer advance, etc. while the long-term financing needs can be fulfilled by shares, debentures or bonds, financial institutions’ term loans, government, and business banks, etc.
  • Efficient use of excess funds in hands by mutual fund contributions, fixed deposits, etc.

Environmental and Safety Laws

In this matter, producers have to be careful. They are expected to determine the environmental effects of manufacturing activities by applicable environmental legislation. Any of the rules and regulations are as follows:

Air (Pollution prevention and control) act aiming to establish air quality standards and controls, the control of ambient pollution levels through manufacturing activities. It also ensures that contaminants, fuel, etc. are prohibited and that air pollution-related equipment is monitored.

  • The Water (Pollution Prevention and Regulation) Act attempts to control water pollution by pollutant discharge into bodies of water above reasonable limits. It also guarantees a fair degree of water consumption;
  • The Environment Protection Act, which is intended to conserve and improve the quality of the environment as a whole by developing requirements for air pollutant emissions from manufacturing entities, controlling the industrial place, managing dangerous waste, and shielding living beings from environmental contamination health hazards;
  • Rules on the management of waste disposal from industrial companies.
  • The Rules for harmful waste management. Including instructions on how to dispose of such harmful waste, where to dispose, how to mitigate its impact, etc.
  • Now, there are also safety measures at work that all the workers at production must follow. It is your responsibility to run periodic temperature checks within the facility.
  • Ensure following hygiene and workers are sanitized from time to time within the premises.


Suppose a manufacturing unit considers the things mentioned above to manage its operations. In that case, it can provide a tough competition to its competitors in the market and can lead to success. Continuous improvement should be the aim of any business entity. Advancement of technology, processes, and products manufactured is an ongoing process, and adaption of such promotions most probably helps in survival in this competitive world.

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