Question

Attempt the following.

Write down the benefits of small business.

Answer 1

Small scale business plays a very important role in the economic development of the country.

The following are the benefits or advantages of small business.

1. Cost Savings: Small scale business used a micro-production method which results in a quality product at the low cost of production. The production cost of a small business is much less compared to large scale industries due to the low cost of operation.
2. Adaptability: Small scale business can change themselves as per the market requirement. They can change product, line of product as per market changes, like fashions, new product, demand, etc.
3. Limited Capital: As small business is labour intensive they requires very small amount of capital for plant and equipment.
4. Low Gestation Period: To start a new business requires very short period as compared to large scale industries. Small scale business can start production of the good in a very short period of time and can increase the scale of production.
5. Labour Intensive: Small business units useless machines and more labours. Absorption of local labour helps to solve the problem of absolute poverty and control inequality of income.
6. Opportunities to Rural Youth: New generation youth has smart creativity. With available technology and raw materials, rural youth can start their own business unit. The small business unit plays a very important role in developing countries.
7. Upliftment of Economy: Majority of small scale business used the traditional method of productions. Rural craftsman and artisans do have their own talents and skills which they have learnt from their forefathers. Such products are very much demanded in the market which results in high income.
8. Decentralised Economy: Small scale business prevents the concentration of economic power in a few hands. Income is divided equally among a large number of people.
9. Export Earning: Small business contributes a remarkable to the country’s export. 40% of India’s exports are contributed by small business like textiles, handicraft, handloom, embroidery, etc.
10. Regional Balance: There is a wide gap between urban and rural India. Small scale business helps to reduce the gap between developed and underdeveloped or developing areas.