Small-scale enterprise is a business that is smaller in size. It is independently owned and operated and is not dominant in its field of operation. Small businesses are either services or retail operations like grocery stores, medical stores, tradespeople, bakeries and small manufacturing units.
There are various essential characteristics of a small business. These characteristics have made it different from the medium and larger business organizations. Instead, small-scale businesses prefer to organize as sole proprietorships, partnerships or limited liability companies. A large number of small-scale businesses operate from a single office, retail store or service outlet.
However, the widely identified characteristics of small business are as follows:
- Smaller in size; revenue also generally lower than companies that operate on a larger scale;
- Managed by the owner; businesses are run entirely by single individuals or small teams;
- Labour intensive and Flexible;
- Little or no delegation of authority;
- Rapid decision-making;
- Local-based operations;
- Quick gestation period;
- All risks are borne by the owner;
- Family workers and or fewer hired workers;
- Mostly owner financed;
- Little emphasis on long-term planning;
- Close labour-owner relations;
- Local market and or limited non-local market;
- Low capital and limited investment;
- A smaller volume of sales;
- Lack of modern technology;
- Mostly handicraft and no use of electricity;
- Less legal formalities;
- Easy control.
So, these are the various characteristics of the small business or small-scale enterprise.
