Characteristics And Importance Of Small Scale Business

Small scale business can simply be defined as a privately owned business with less capital investment, less number of employees and less annual revenue.

Characteristics of small scale business

• Small scale business is usually managed by the owners of business or relatives of business owners. This means that the controller or business in small scale business is the owner himself or he/she can select his/her relative or friend to control the business.
• Mostly, the sources of fund are from the owners of the business. In small scale business, fund are mostly from the owners of the business, where by these funds can be borrowed from friends, relatives or even from the bank.
• Government usually provides soft loans for the small scale business. In small scale business, government provides loans to the business owners so as to raise up their business. These loans are provided by agreements, including the time to return the loan.
• The originated of the business (owners) are usually play doubles roles (two roles), first as the owner and second as the one who planning, organizing, directing, coordinating and controlling the business.
• Small scale business experience difficulties (hardships) in raising adequate capital for their business. Banks and finance houses put difficult and hard conditions for the owners of business to get loans.
• Small enterprises (small business owners) with small capital business usually use informal financial institutions. Due to the hard and difficult conditions which are put by banks and finance houses, owners of small business (small enterprises) use informal financial institutions to escape difficult conditions.

Importance of small scale business

There are several advantages which a person can get if he/she will be serious with the business activity he/she doing. The following are some advantages (importance) of small scale business if will be done effectively.

It develop domestic economy, small scale business helps to push up the domestic economy through production of different goods, products and services which brings income to the owners as well as government through taxes.

Small scale business help to solve the problem of unemployment, through small scale business people employ themselves and sometimes employ others, this helps people to afford their lives through the income from the business.

Small scale also ensure the availability of new products in the markets; as we know, due to the development and advancement of technology which lead to the growth of business especially in innovations of new products. These new products are those which used by a human.

Small scale helps people to get income, through business activities, people earn money as the profits from the business they make. These incomes helps people to afford their daily needs especially basic needs such as food, shelter and clothes.

CONCLUSION

The survival of the small scale business usually depends much on the person's tolerance, if the owner of the business is not tolerant, means he/she will not be able to take risk occurring in a business and lead to the death of a business due to the failure of the owner. Therefore owners of Small business should make sure they take risks occurred in the business.

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