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Small scale industries face several issues including a lack of financing due to poor cash flow and high costs, a lack of expertise in business and management skills, outdated technologies, domination by large firms, shortages of raw materials, and labor issues related to selection, training, and retention of skilled workers. They also struggle with managing working capital and having sufficient short-term assets.
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If you want to know the problems small scale industries facing. Read this file.
Small scale industries face several issues including a lack of financing due to poor cash flow and high costs, a lack of expertise in business and management skills, outdated technologies, domination by large firms, shortages of raw materials, and labor issues related to selection, training, and retention of skilled workers. They also struggle with managing working capital and having sufficient short-term assets.
Small scale industries face several issues including a lack of financing due to poor cash flow and high costs, a lack of expertise in business and management skills, outdated technologies, domination by large firms, shortages of raw materials, and labor issues related to selection, training, and retention of skilled workers. They also struggle with managing working capital and having sufficient short-term assets.
Following are the Issues faced by Small Scale Industries
1. Short of Finance: Financial problem is a situation
where a businessman focuses with stressful mind. Many small business owners are facing hard financial crisis now a days which has created anxiety for business survival. Some reasons of lack of finance for small traders are:
Poor cash circulation
High labor cost The improper maintenance of books of accounts by owner 2. Lack of Expertise: Many small business owners have no experience of handling the business properly. They are not practically equipped with 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. 3. Technologies life cycle: Small scale industries mainly possess old and outdated technologies which affect the production level.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 the business requires a good level of skills. Small scale business industries lacks in planning and organizing the various issues like: High worker Turnover Lack of Training and Education Lack of Communication 5. Domination of large and reputed firms: Small scale industries are facing 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. 6. 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 production of goods. They need it on regular period of time. They may get inferior quality of raw materials at cheap rates which ultimately affects the business. 7. Labour issues: The Industry must take reasonable steps while selecting the human man powers to lead the business. The difficulties which business owners face when they select the human resource are:
Selection of Skilled/ Unskilled Labor
Physical and Emotional behavior of Employees Balancing their Personal and Professional Life Training and Development Monetary and Non-Monetary Assistances 9. Management of Working Capital: Low working capital indicate serious financial problems with a company. The industry must have enough short-term assets to pay off its short-term debt and liabilities. High working capital is an indication of a well- managed company. However, some small companies have negative working capital. Thank You for reading…