Small scale industries and businesses are defined as those that require less capital, labor, and machines to operate. According to the MSMED Act of 2006, a small business in India is classified as such if its capital investment is less than 1 crore rupees. Examples of small scale industries include businesses that produce napkins, tissues, chocolates, toothpicks, water bottles, small toys, paper products, and pens. These industries typically require only a one-time investment in machinery, plants, and other capital assets. Small businesses face challenges such as poor capacity utilization, inadequate management and financing, shortages of raw materials, and lack of marketing support. Steps to starting a small business include deciding on an industry,

1. Small Scale Industry And
Business
Class XI
Prof. Komal C. Gadhe

2. MEANING:
 A business which operates on a small scale and requires less capital ,
less labour and less machines is called as small business.
 According to MSMED Act,2006:
An industrial unit can be categorized as small business
if it fulfils the capital investment limit should not be more than 1 Cr. fixed
by government of India.
MSMED – Micro, small and medium Enterprise Development act, 2006
 For example, these are the ideas of Small scale industries: Napkins,
tissues, chocolates, toothpick, water bottles, small toys, papers, pens.
 These industries do a one-time investment in machinery, plants, and
industries

3. CHARACTERISTICS:
 Ownership
 Management
 Limited Reach
 Labour Intensive
 Flexibilty
 Resources

4. Classification of Small Scale business:
M
a
n
u
f
a
c
t
u
r
i
n
• Doe
s
not
exce
ed
25
Lakh
• Mor
e
than
25La
kh
but
does
not
exce
ed 5
Cror
e
• Mor
e
than
5
Cror
e
but
does
not
Service
• Does not exceed 10 Lakh
• More than 10 lakh but does not exceed 2 Cr.
• More than 2 Cr but less than 5Cr.
MICRO
SMALL
MEDIUM

5. Classification of Small Scale Industries
Traditional
1. Handloom
2. Handicraft
3. Coir
4. Sericulture
5. Khadi and village
Industries
Modern
1. Bicycle parts
2. Sewing Machines
3. Blades, razors
4. Electric
Appliances
5. Spare parts

6. IMPORTANCE
 Employment Potential
 Less capital requirement
 Latent resources
 Quick production
 Decentralization
 Preservation of inherited skill
 Support to large scale industries
 Promoting Entrepreneur

7. ADVANTAGES
 Potential for large employment
 Requirement of less capital
 Contribution to industrial output
 Contribution to export
 Earning foreign exchange
 Equitable distribution
 Efficiency in costs
 Utilization of resources
 Opportunities for entrepreneurship

8. CHALLENGES FACED BY SSI:
 Poor capacity utilization
 Incompetent management
 Inadequate finance
 Raw material shortages
 Lack of marketing support
 Problem of working capital
 Problems in export
 Poor industrial relations

9. Steps in setting up Small Scale Business
Decision of
business
area
Study of
business
environment
Selection of
product
Selection of
place
Selection of
technology
Business
proposal

10. Finance Registration
Actual arrangement
of resources
Production and
marketing of
product
Review or feedback
for future change

11. THANK YOU