Instead of exporting products that don’t require much capital, a developing country should put its money into those that do. Prof. Amartya Sen says that in many areas of production in low-income countries, labor-intensive methods can be helpful. This article will go into role of small business in detail and provide some examples for your convenience.
The role of small business is crucial to the growth of the economy in many countries. If you want to see multiple industries grow in a new country at the same time, invest in those that help other industries grow. Rosenstein Rodan says that it is a good idea. In India, small-scale industries and projects that used river valleys for more than one thing both did well. Read more about types of small business to deepen your comprehension.
Role of Small Business
Some people don’t want to work for big companies, so small businesses give them an alternative. Startups and SMEs take risks. Most of these projects are probably not going to work out, but the ones that do will shape the economy of the future. We’ll look at the role of small business and talk about the related topics in this area.
Flexible and Adaptable
The role of small business in the economy is evident in their ability to provide customized products and services that meet the unique needs of their customers. People walk through doors of chance when they are open.
Smaller companies are more likely to be able to keep up with the times. Small businesses can cater to the needs of each customer because they make and sell their own goods. Small businesses can’t get help from the government because they don’t have enough money.
Increased Tax Revenue
Governments can pay for rural development and meet the needs of cities by taking money from industry. Profit is the main reason why businesses exist. When a company makes more money, taxes get more money. So, taxes pay for things like healthcare, education, defence, and more.
Equality Argument
Few people have most of the money and most of the power in business. But SSIs help get manufactured goods to more places. So, a community benefits more from the money made by a large number of small businesses than from the money made by a small number of large businesses.
Small companies spread their power out over a wide area, while big companies tend to concentrate their economic power. So, small businesses help make the economy more fair.
It’s true that small factories pay less than big ones everywhere, but in developing countries, workers sometimes have to choose between getting low pay or not getting paid at all. So, you have no other choice but to take the low-paying job.
Labor Oriented
Companies that use a lot of people to do their work Multiple rural and semi-urban positions are available. Small businesses help bring down the unemployment rate. In India, they play a very important part.
India has a lot of small businesses that depend heavily on human labour. This is because the country has a large labour force and a strong government. Small businesses are helped by lower interest rates on loans and government programmes that help businesses.
Human Resource
After the agricultural sector, small businesses are the second largest employer in India. The role of small business is significant in creating competition in the market, which can lead to increased quality and lower prices for consumers.
The ability of small businesses to create jobs is better than that of large businesses. Small businesses hire more people in this country than any other sector of the economy.
Decentralization Argument
This argument has two parts: first, stopping industrialization in big cities would cut down on traffic, and second, encouraging it in semi-urban and rural areas would keep people from moving to bigger cities.
Small businesses in rural areas help create a more fair and integrated rural economy by creating more jobs, making more money, and making sure people can live better. In India, small and home-based businesses are helped by the fact that industrial estates are set up in cities.
Utilization of Local Resources
In semi-urban and rural areas, small businesses grew up to meet the needs of the people who lived there. People who own and run businesses in the same area serve and employ people in a fairly small area.
Businesses can benefit from the fact that workers, raw materials, and customers are all close by. Bringing together and using resources on the ground helps regional economies do better.
Employment Argument
One of the most important economic problems in the country is the high rate of unemployment. When manufacturing goes up, it slows down the number of wage jobs that are available.
Small businesses may help the economy by giving people the chance to work for themselves. The role of small business is also important in promoting social mobility and creating opportunities for individuals to start their own businesses and achieve financial independence.
Industrial Units
The role of small business in the economy is important because they provide a diversity of goods and services, increasing the variety of options available to consumers. Small businesses make up most of India’s manufacturing sector. Now, 95% of the market is made up of this type of unit. 40% of the manufacturing businesses in the United States are small businesses. Small businesses make up 45 percent of India’s exports.
Fosters Development & Growth
The growth of a country’s regions helps the country grow as a whole. In every area, the presence of small businesses raises the quality of life and makes the economy stronger.
Businesses that do well are more productive, have access to global markets, and help their employees grow. The role of small business is also important in promoting innovation, as small businesses often drive new ideas and technological advancements.
Frequently Asked Questions
How Fast do Small Businesses Grow?
A business has a good chance of making it between the seventh and tenth year. During the first three years, you should focus on learning the ropes and getting your business off the ground.
Is it Hard to Maintain a Small Business?
During hard times, a small business could use some extra help. Because of this, there is no surefire way to make sure that a small business will do well in the long run.
What do Small Business Owners do?
CEOs of small companies usually start out as CEOs. The company’s management team comes up with and puts into action plans for keeping the company profitable, competitive, and in line with its marketing strategy. Entrepreneurs need to look at the market and make plans based on what they find.
Conclusion
Business owners are great at taking risks that are well thought out. Since 1977, the number of small businesses that fail has gone down by 30%. There are now more ways to learn and get new information. We’re going to take a look at the role of small business and discuss related matters in this topic.