Problems Faced By Small Scale Industries

Businesses are being carried out on a large scale across the globe. Many companies are competing with each other on the basis of their size, location, reputation, etc. Small Scale Industries grow in a limited area. They do not get benefits as much as large scale enterprises because of their nature and size of business. They also contribute some value to the economy but they lack a high level of strategies and plans as compared to Large Scale Industries.


  1. Short Of Finance

Financial problem is a situation where a businessman focuses with a stressful mind. Many small business owners are facing hard financial crisis nowadays which has created anxiety for business survival.  Some reasons for lack of finance for small traders are:

  • Poor cash circulation
  • High labor cost
  • The improper maintenance of books of accounts by owner


  1. Lack Of Expertise

Many small business owners have no experience in handling the business properly. They are not practically equipped with the internal and external business environment in industries. They have poor management skills. New business owners lack relevant business and management expertise in areas such as finance, purchasing of products, selling of products, production process, hiring and managing employees, etc.

  1. Technologies life cycle

Small scale industries mainly possess old and outdated technologies which affect the production level. The reputation of small scale industries may be lost among consumers. Lack of productivity affects the whole system of business.

  4. Lack Of Management Skills

Managing a business requires a good level of skills. Small scale business industries lack in planning and organizing the various issues like:

  • High worker Turnover
  • Lack of Training and Education
  • Lack of Communication

Small Scale Industries

  1. Domination Of Large And Reputed Firms

Small scale industries are facing a high level of challenges in marketing themselves because of continuous business threats by large scale industries. They are unable to sell their products on a large scale.


  1. Shortage Of Raw Materials

Raw materials are materials used in the primary production or manufacturing of goods. Business owners face challenges and risks while selecting the raw materials for the production of goods. They need it on a regular period of time. They may get the inferior quality of raw materials at cheap rates which ultimately affects the business.


  1. Labor Issues

The Industry must take reasonable steps while selecting the human manpower to lead the business. The difficulties which business owners face when they select the human resource are:

  • Selection of Skilled/ Unskilled Labour
  • Physical and Emotional behavior of Employees
  • Balancing their Personal and Professional Life
  • Training and Development
  • Monetary and Non-Monetary Assistances Small Scale Industries do not enjoy much of the advantages enjoyed by large scale enterprises because of their nature and size. Though they have made a significant contribution to economic development, they have not realized their full potential.





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