Small scale business is a business that involves less capital investment, less number of labours, fewer machines and local technology to operate.
In most cases, the growing of small scale business in developing countries is usually due to the high rate of unemployment, especially the increase of graduates rate without employment opportunities. This makes them willing to get into small business to earn incomes to afford the life expenses like electric and water bills, school fees and others. The small business not only a source of employment to unemployed people but also play a big role to the development of the economy of a country.
The following are the Characteristics of small scale business:-
1. They are managed by the owners or relatives of the owners.
2. Most of ownership structure being sole proprietorship and partnership.
3. The one who owns the business plays more than one role, as the owner, planner, director and a coordinator of the business.
4. Hardship in raising capital for the business, simply because the conditions for the loans in most of financial institutions like banks are difficult to be met.
5. The use of informal financial institutions especially in getting loans.
6. Most of business engage in service related activities.
7. The owners are usually not expertised to the business, but they start the business due to the opportunity found in a particular area.
8. Majority of owners have lower level of education, only few of them have higher level of education.
9. Majority of owners don't have prior experience of the business,
10. Death of a business usually leads to the death of the business.
11. They depends much on the use of labourers than machines.
12. They uses local technology and utilize local resources available in a particular area.
13. They are flexible to changes than large businesses.
You can also read: Characteristics And Importance Of Small Scale Business
Post a Comment