The concept of small businesses
sole proprietorships that have fewer employees and/or less annual
revenue than a regular-sized business or corporation.
Businesses are defined as “small” in terms of being able to apply for
government support and qualify for preferential tax policy varies
depending on the country and industry. Small businesses surround us.
They are on every other street and in every corner. Every second thing
someone buys comes from a small business.
stores, medical stores, tradespeople, bakeries and small manufacturing
units. Small businesses are independently owned organizations that
require less capital and less workforce and less or no machinery. These
businesses are ideally suited to operate on a small scale to serve a local
community and to provide profits to the company owners.
a small scale business is a business set up in which the financial
commitment towards infrastructure such as building & equipment,
whether made as an owner or on rental or purchase basis, does not
surpass ₹1 Crores.
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Sole proprietorship: A sole proprietorship refers to a business that
is not incorporated and has only one owner. These are typically
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Partnership: A partnership is a formal arrangement in which two or
more parties cooperate to manage and operate a business. Various
partnership arrangements are possible in which all partners might share
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C Corporation: A C corporation is a business term that is used to
distinguish this type of entity from others, as its profits are taxed
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S Corporation: S corporations have a “pass-through” tax liability,
which means the business owners don’t pay taxes at the corporate
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LLC: A limited liability company is a combination of a partnership
and a corporation. It gives business owners protection from personal
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Travel agency: A travel agency is a private retailer or public
service that provides travel and tourism related services to the public
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YouTubing: YouTube is a hotspot for creative and talented
individuals looking for great returns with little monetary investment.
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Consultanting: Consulting businesses like wedding planner,
man-power, travel etc. are quite popular.
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Photography: Photography is the art, application and practice of
creating durable images by recording light or other electromagnetic
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Street-side selling: We can setup a street-side vendor or stall
where we can sell vegetables, fruits, food, raw meat, books,
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Online services: People can provide online services which is
a good-earning source nowadays. Services like online teaching,
- Teaching: Qualified people who have good teaching skills,
can setup a coaching academy, tuition class or teaching
room.
- Using vehicles: People can use vehicles to run their
businesses. They can give their vehicles on rental, run
transport service etc. They can even sell their products like
books, clothing, food etc. on the vehicles (preferably mini
trucks and vans).
- Restaurant, bar, kiosks, stall and tiffin service: People can go for
bakery establishing restaurants and bars on a small-scale (worth
not more than ₹1 Crores. Also, tiffin services are also booming
these days, where we can provide consumers food in tiffin (that
should be usually cheap) and then later, we need to collect the
tiffin back for reuse. Kiosks having juices, food joints, tailoring,
bakery services etc. or selling products through them are quite
cheaper.
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Influencing: Becoming a ‘Influencer’ is quite popular these days.
Influencer marketing is a form of marketing in which focus is placed
- Manufacturing: People can establish small-scale units and
production factories to provide services like
wedding/visiting card making, banner/
pamphlet making, use-and-throw pen
making etc.
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Shops and stores: People can open their own shops or stores to
sell goods and services. For example; barber shops, grocery store,
pharmacy etc.
And the list is endless.
3.
Nature & Role of Small Businesses
Nature
The nature of business can be explained in four points:
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The business is organised by individuals in the private sector.
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The use of family labour and locally available talent is made.
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Simple equipments are used.
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Capital investment is small, generally restricted to one crore.
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The use of indigenous technology.
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Limited resources are used.
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Flexibility of operation should be maintained.
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Personal attention should be given.
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Individual attitude is required.
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Act as suppliers of large scale business.
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Look upon social utility
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Provide benefits in remote areas.
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Increase employment
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Improves economic condition.
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Promotion of artistic and creative sense.
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Rural development
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Mobilization of local resources.
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The government of India created the Ministry of small scale
industry and Agro and Rural Industries as the nodal ministry for
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This ministry was divided into following two separate ministries in
September 2001, Ministry of Small Scale Industries.
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A part from the ministries state government also makes various
promotional and development Projects for SSI and then are executed.
4.
Problems & Schemes
Problems
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Shortage of Fund: Small enterprises have a chronic shortage of
finance both for fixed and working capital requirement.
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Shortage of Raw Materials and Power: Most of the small factories
have shortage of raw materials and other equipments because of
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Old Techniques of Production and Lack of Latest Technical
Knowledge: Most of the small scale enterprise use old techniques of
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Marketing Problems: Small scale industries face many difficulties
in marketing their products because of many reasons like the cost of
production is high, they cannot afford to have their own marketing
organization, products of many small firms are not having uniform
quality etc.
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Personal Problem: Securing the right type of personal is a major
problem of small business. A more important problem is the problem of
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In perfect Organizational Setup: In most of the small enterprise
the ownership and management functions are performed by the owner
Schemes and actions by Indian government and others
backward and hilly areas. Some of the support measures and
programmes meant for the promotion of small businesses:
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National Bank for Agriculture and Rural Development (NABARD):
The NABARD provides loans and advances to State Government for
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The Rural Small Business Development Centre (RSBDC): It is set
up by the World Association for Small and Medium Enterprises and is
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National Small Industries Corporation (): Its main focus was on to
supply indigenous and imported machines in easy instalments, to
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Small Industries Development Bank of India (SIDBI): SIDBI was
established as a public corporation. Its main object is to promote.
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The National Commission for Enterprises in the Unorganised
Sector (NCEDS): The NCEUS was constituted in September 2004,
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Rural and Women Entrepreneurship Development (RWED):This
programme encourages rural people and women RWED provides the
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Prime Minister Rozgar Yojana, Training of Rural Youth for
self-employment, Jawahar Rozgar Yojana etc. were also made.
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Scheme of Fund for Regeneration of Traditional Industries
(SFURTI): This fund is used to improve the technology of traditional
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The District Industries Centre (DIC): The DIC Programme was
started around 1978 to provide assistance to small scale industries at
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Twist Mobile: Vinod Khutal grew up near Indore and studied architecture,
before studying computer science. An ad by game developer Gameloft on
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MakeMyTrip: Brainchild of Deep Kalra, an IIM Ahmedabad alumnus,
MakeMyTrip has revolutionized the travel industry over the years. It was
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Zomato: Launched in 2008, Zomato hasn’t been anything less of a
sensation. It covers over 331,200 restaurants in 19 countries. Started as
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Teach For India: A non-profit organization under the Teach For All global
movement, Teach For India works towards ensuring excellent education for all
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FreeCharge: An e-commerce website, FreeCharge was founded in 2010
by Kunal Shah and Sandeep Tandon. It has made mobile recharge free by
it is chosen and established well. There might be various
disadvantages and problems with it, but there are also preventions,
schemes and guidance given by Indian government and other
sources. Definition of small businesses might not be same all
around the world as different countries have different norms and
rules. There are many advantages of it.
against any organization, scheme, policy or anything. Information
provided in it was taken from the internet and NCERT’s Business
Studies book for class 11.