Q. State the features of
small business? Do you think it can survive in competitive market?
Ans. These are the
features of small scale business:
The management and organisation is personal in nature. Themanagers and owner
are the same.
The amount of capital required is less as compared to large scale industries.
business is labour intensive and it does not require huge amount of capital
because its scale is small.
technology used is simple in nature.
Area of operations-
Small business firms generally has local area of operations.
Small industries do survive in the competitive environment because
of the following reasons:
Small enterprises succeed in areas requiring personal touch in handling
customers such as restaurants, boutiques hair cutting saloons, jewellery stores
Small business enterprises require limited financial resources in comparison to
large scale industries because they are less capital intensive.
Small scale enterprises are more flexible in the sense that they are able to
react more quickly to changes in the environment they are usually owner
operated and this allows them to try to new ideas without lengthy and elaborate
Small business enterprises are suitable for goods and services have limited
market. Large business will not find it worthwhile to invest in such projects
because the demand is not sufficient for mass production.
Low Cost of Production:
Small business use locally available resources and raw material. Small
businesses have low overhead costs. As a result small business enjoys the
advantage of low cost.