What Are The Characteristics Of A Small Business?
Do you plan to start a small business, but you still have an unclear understanding of this new venture? Hence, you need to understand the meaning of a small business before you get started. A small business is a privately owned corporation, partnership, or sole proprietor with a small number of employees and smaller yearly revenue. So, if you are planning to start a small business, go here to get some simple and effective ideas for beginners.
Business on a small-scale level
A small business that functions on a small scale level will involve the following:
- Less capital investment
- Less number of labor
- Fewer machines to operate
It is best described as a small business. Small businesses are small-scale industries, a type of industry that produces goods and services on a small scale level. These small scales industries play an essential role in the country’s economic development. The business owner will invest once in the machinery, plants, and industries, or take a hire or lease purchase. These are the industries that don’t invest more crore.
Examples of small-scale industries are:
- Local chocolate, etc.
These are industries that mostly settled in urban areas as separate units.
Characteristics of a small business
After you understand the meaning of a small business, comprehending its characteristics is your next objective. Here is a list of the characteristics of a small business or small-scale industry:
- Ownership. It has a single owner known as a sole proprietorship.
- Management. All the management works are under the control of the owner.
- Limited reach. The restricted area of operation can be an industry or local shop located in one area.
- Flexibility. It is open and flexible to sudden modifications, unlike in large businesses.
- Labor intensive. The dependency on technology is very little as they are dependent on manpower and labor.
- Resources. They use local and instantly available resources. They do better use of limited waste and natural resources.
Small business categories
Whether they are a small businesses, they also have different categories:
- Small scale industry
- Ancillary small industrial unit
- Export-oriented units
- Small-scale industries (owned by women)
- Tiny industrial units
- Small-scale service and business
- Micro business enterprises
- Village industries
- Cottage industries
Now, if you are interested to engage in this new venture, it is a good start to understand the meaning and the characteristics of this small-scale industry. It helps you guide in your small business journey and face the future competitively.