Characteristics of small business
1) A small business is usually owned and managed by one or a few persons.
2) The owners take active participation in day-to-day activities of business.
3) The participation of owners in the management helps in taking quick decision.
4) The area of operation of a small business is limited. It generally caters to the need of the
local people.
5) The small business units are generally labour intensive and thus require less capital investment.
(g) Small- scale Service and Business (industry related)
1) A small business is usually owned and managed by one or a few persons.
2) The owners take active participation in day-to-day activities of business.
3) The participation of owners in the management helps in taking quick decision.
4) The area of operation of a small business is limited. It generally caters to the need of the
local people.
5) The small business units are generally labour intensive and thus require less capital investment.
6) It generally uses local resources for its operation.
7) The small-scale manufacturing units are
usually located near the source of raw material, labour
etc.
8) Gestation period (the period that a business waits
to get return on its investment) is short.
Types of
small business
In India we find different types of small business. They may be categorised on the basis of investment in fixed capital in plant and machinery or on the basis of nature or place of operation. Following are some of the main types of small business.
(a) Small-scale industries
(b) Tiny industries
(c) Ancillary industrial undertakings
(d) Village industries
(e) Cottage industries
(f) Micro Business
enterprisesIn India we find different types of small business. They may be categorised on the basis of investment in fixed capital in plant and machinery or on the basis of nature or place of operation. Following are some of the main types of small business.
(a) Small-scale industries
(b) Tiny industries
(c) Ancillary industrial undertakings
(d) Village industries
(e) Cottage industries
(g) Small- scale Service and Business (industry related)
(h) Trading units
Let us
have a brief idea of these small businesses.
(a) Small-scale Industries: A small-scale industrial unit is one in which fixed capital investment in plant and machinery does not exceed Rs. One crore. In case of certain export promotion units this investment ceiling can be raised upto Rs. 5 crores.
(b) Tiny Industries: A business unit whose total fixed capital investment in plant and
machinery does not exceed Rs. 25 lakhs is called a tiny industry.
(a) Small-scale Industries: A small-scale industrial unit is one in which fixed capital investment in plant and machinery does not exceed Rs. One crore. In case of certain export promotion units this investment ceiling can be raised upto Rs. 5 crores.
(b) Tiny Industries: A business unit whose total fixed capital investment in plant and
machinery does not exceed Rs. 25 lakhs is called a tiny industry.
(c) Ancillary Industrial
Undertakings: When
a small-scale industry supplies not less than 50% of its production to another
industry, it is called as ancillary industrial undertaking. The fixed capital
investment limit of Rs. One crore also
applies to it. If an ancillary unit is owned by some other business unit, it
losses it status of small business.
(d) Village Industries: A unit that is located in rural area and whose fixed capital investment in plant and machinery does not exceed Rs. 50, 000 per artisan or worker is termed as village industry.
(d) Village Industries: A unit that is located in rural area and whose fixed capital investment in plant and machinery does not exceed Rs. 50, 000 per artisan or worker is termed as village industry.
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