SMALL BUSINESS

Prepared By:

Nijaz N

SMALL BUSINESS

• A small – scale independent firm usually managed, funded and operated by

its owners, and whole staff size, financial resources and assets are

comparatively limited in scale.

• Small business usually have limited growth opportunities.

• E.g., Restaurants, gas stations, stores etc

• Small business comprises many local enterprises, service companies and

professional organizations.

General aspects of Small Business

• Size may be measured in the following ways:

1. Owned by just one or two individuals.

2. Total capital investment.

3. The value of total assets or fixed assets

4. Total investment in plant & machinery

5. The number of persons employed.

6. Often a family –based business

7. Volume/value of production.

8. Volume/value of sales turnover.

9. Geographically limited to one or two locations.

10. A combination of the above.

Objectives of SMALL BUSINESS in India

1. To generate immediate and large scale employment opportunities with

relatively low investment.

2. To eradicate unemployment problem from the country.

3. To encourage dispersal of industries of industries to all over the country

covering small towns, villages, and economically lagging regions.

4. To bring backward areas too in the mainstream of national development.

5. To promote balanced regional development in the whole country.

6. To ensure more equitable distribution of national income.

7. To encourage effective mobilization of county’s untapped capital and human

resources.

8. To improve the level of living of people in the country.

Factors leading to Success of Small Business

• A small – scale independent firm usually managed, funded and operated by

its owners, and whole staff size, financial resources and assets are

comparatively limited in scale.

Factors leading to Failure of Small Business

1. Management

a. Strategy

b. Decision Making

2. Finance

1. Cash Flow Management

2. Lack of working capital

3. Marketing

1. Inappropriate pricing

2. Inadequate distribution

3. Lack of Marketing knowledge

4. Production

1. Not suitable location

2. Low-quality product/service

3. Over-expansion

5. Human Resource

1. Conflict with staff

2. Inappropriate employees

6. Others

1. Stress among employees

2. Long working hours