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Explain briefly any four problems faced by small business. |
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Answer» 1. Finance: The most serious problem faced by SS Is is that nonavailability of adequate finance to carry out their operations. 2. Raw materials: Another major problem of small business is the procurement of raw materials. If the required materials are not available, they have to compromise on the quality or have to pay a high price to get good quality materials. They purchase raw materials in small quantities due to lack of storage capacity and hence their bargaining power is low. 3. Managerial skills: Small business is generally promoted and operated by’ a single person. who may not possess all the managerial skills required to run the business. 4. Less productive labor: Small business firms cannot afford to pay high salaries to their employees, which affects employee willingness to work. Thus, productivity per employee is relative low and employee turnover is generally high. |
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