Small businesses face several key risks and challenges including a high risk of failure due to lack of planning and financial losses, inadequate management skills and experience, and difficulties competing against larger firms. They also struggle with marketing challenges, complex regulations and paperwork, underutilized capacity due to disorganization, and poor financial management with limited access to credit and capital as well as weak record keeping.
Small businesses face several key risks and challenges including a high risk of failure due to lack of planning and financial losses, inadequate management skills and experience, and difficulties competing against larger firms. They also struggle with marketing challenges, complex regulations and paperwork, underutilized capacity due to disorganization, and poor financial management with limited access to credit and capital as well as weak record keeping.
Small businesses face several key risks and challenges including a high risk of failure due to lack of planning and financial losses, inadequate management skills and experience, and difficulties competing against larger firms. They also struggle with marketing challenges, complex regulations and paperwork, underutilized capacity due to disorganization, and poor financial management with limited access to credit and capital as well as weak record keeping.
Small businesses face several key risks and challenges including a high risk of failure due to lack of planning and financial losses, inadequate management skills and experience, and difficulties competing against larger firms. They also struggle with marketing challenges, complex regulations and paperwork, underutilized capacity due to disorganization, and poor financial management with limited access to credit and capital as well as weak record keeping.
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Problems of Small Business
a) Risk of failure: small businesses have high risk of failure. The reasons are: i. Lack of homework ii. Financial loss iii. Economic downturn b) Inadequate management: i. Poor management skill ii. Poor business knowledge iii. Inadequate planning and inexperience c) Problems of marketing: i. Large firms may enter the market of small firms ii. Inability to face the competition d) Laws and regulations: i. Lots of paper work required ii. They are burdensome and complex for small scale businesses e) Problem of under utilization of capacity: i. Unorganized nature of operation ii. Irregular supply of raw material f) Poor financial management: i. Inadequate availability of credit facility ii. Inadequate capital iii. Weak accounting record keeping
Differences between large and small business
s.no. Parameters 1. Investment
Small Up to Rs. 30 million
Large Above Rs. 100 million
2.
No. of workers
Less no. of workers
Higher no. of workers
3.
Production
Low production
Production is high
4.
Technology
Simple technology
High technology
5.
Ownership
6.
Management
Sole trading form of Company
form of ownership ownership with many shareholders Inadequate management Systematic management
7.
Flexibility
8.
Customer relationship
More flexible to Less flexible to changing changing markets markets Close relation with Distance relation with customers customers
