Saturday, June 15th, 2024
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What are the characteristics of small businesses?

Small Business Women
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There are several characteristics of small businesses. They are stated below:

  • OwnershipSmall businesses have single owners. So, we can also call it a sole proprietorship.
  • Management: All the management works are handled by the company manager. Though the manager has other workers, the owner controls every major decision.
  • Limited reach: It is a small business, so one can expect that it has a restricted space area. It may be any local shop or any small industry. One will not find small businesses in every place.
  • Labour intensive: Small businesses do not depend on technology because they don’t have much capital. They mainly depend upon staffing and other labourers. That is their primary way of working.
  • Flexibility: As it is a small-scale industry, they are open and flexible to various kinds of changes.
  • Resources: As it is a small business, the owner tries to save their money by utilizing natural resources. Small companies mainly use the immediately available resources.
small businesses girl
Photo by Karolina Grabowska from Pexels

What are the various types of small businesses?

Small businesses can be of various types. The category is mainly divided based on money invested in it.

  • Small scale industry: Small scale industries mainly invest in fixed assets. Examples are machinery and plants. The small scale does not surpass one crore. The amount almost crosses more than five crores for export improvement and modernization.
  • Ancillary small industrial unit: Small industrial units mainly hold the status of a small ancillary industry. It has been seen to supply 50% of its products to another business. It means the parent unit. It has also been seen to produce machinery parts, tools, and standard products.
  • Export-oriented units: Export-oriented units will help you with the status so that they can exceed 50% of their manufacturers. It can also opt for compensations like exporting various bonuses and awards by the government.
  • Industries owned by women: Some enterprises are operated entirely by women. If we see the amount, then the amount comes to more than 51%. One can easily opt for special grants from the government.
  • Micro Business enterprise: Micro Business enterprise consists of tiny businesses. This investment is entirely machine-based, so the amount should not exceed Rs 1 lakh.
  • Village industries: Those industries which are situated in the rural areas are called village industries. Village industries have fixed enterprises on capital as per head, employees, and artisan, which does not surpass Rs 50,000.
  • Cottage industries: The cottage industry is best known as traditional or rural industries. However, cottage industries did not possess capital investment criteria.

Many people often wonder about whether it is right to open a small business or not. It is perfect to go for a small business. There are lots of chances to earn money and fame.


If you plan to go for a small business, then it is the best idea you have. Go for small industries and start earning. There are many businesses available. Choose as per your desire.

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