Advantages And Disadvantages Of Small And Medium Firm

In the last several years, as we have seen some of the major financial conglomerates collapse, when Wall Street carries some negative connotation, investors’ attention turns to the companies who work primarily with Main Street, specifically those folks who create capital and own assets. A lot of these businessess would not strike you as super wealthy, yet it is the small businesses that proved to be the most resilient during the hard economic times.

Small businesses are the backbone of national economy and play a leading role in innovations as well as in creating jobs. Small business has the intrinsic needs to growth. Obvious contributions of the growth of small businesses include the increased return on investment and job creation. The interesting and valuable question is how small business grows and are all small businesses growing? It is no surprise that the growth of business is a core topic both in organization theory and entrepreneurship, both are interested in the process and causes of business growth. Stages of growth models, which assume that business go through some distinct stages from birth to maturity, have been the most popular theoretical approach in academic to understand small business growth. Although the stages model of growth has been criticized for being too sequential and linear which is unrealistic and inconsistent with empirical evidence (e.g. Phelps et al., 2007; Levie and Lichtenstein 2010), various new stages models of business growth have been developed since the 1960s.

In today’s economy, firms are no longer the center of business. In order to survive,

Small businesses are mighty minnows, reflecting the competitive spirit that a market economy needs for efficiency; they provide an outlet for entrepreneurial talents, a wider range of consumer goods and services, a check to monopoly inefficiency a source of innovation, and a seedbed for new industries; they allow an economy to be more adaptable to structural change through continuous initiatives embodying new technologies, skills, processes, or products (Ibielski 1997, p. 1).

In India, about 670 industries are completely reserved for very small companies, which means that the economy lose the benefits of scale, don’t get foreign investments and are unable to compete globally. In 2001, the average Indian clothing company had only 50 machines, compared to 500 in the typical Chinese plant. The same problem

The small business marketplace is extremely dynamic and the changes are fast. Here are some encouraging facts from the US Small Business Administration on small businesses. There are about 30 million small businesses in the United States and employ just over half of the country’s private workforce. They employ a staggering 40% of high tech workers such as computer professionals, scientists and engineers. More than half of the small businesses are home-based businesses and two percent of them are franchises. One of the most important aspects is the fact that a majority of innovations in the United States come from small businesses.

Conclusion: This paper is intended to give clarity on the depths of small businesses, how they plan to succeed and get through possible adversity. The surviving mechanism it takes to maintain in a world where large businesses are expected to exist longer than small business.

If the small firm is actively involved in international trade as are most little firms in specific areas in Europe, case in point then worldwide business is an extremely important subject to study particularly if consolidated with cutting edge European dialects. One of the enormous brakes on the advancement of little firms is the way that a large portion of those that could stretch globally neglect to do so in light of the fact that they fail to offer any staff at administration level with the abilities to help them grow abroad.

The definition for small-scale industrial undertakings has changed over time. Initially they were classified into two categories- those using power with less than 50 employees and those not using power with the employee strength being more than 50 but less than 100. However the capital resources invested on plant and machinery buildings have been the primary criteria to differentiate the small-scale industries from the large and medium scale industries. An industrial unit can be categorized as a small- scale unit if it fulfils the capital investment limit fixed by the Government of India for the small- scale sector.

Private Limited Company is a successful business type. Minimum two persons can promote a Private Limited Company. There can be minimum two and maximum two hundred members of a Private Limited Company. Perpetual succession, separate judicial entity, greater stability etc are some of the main features of a Private Limited Company. Larger businesses prefer dealing with a Private Limited Company than with a Proprietorship or a Partnership Firm.

business. The capital for small business is not very high to attain wide edges in market. As

The potential role of smaller firms in employment creation is the most noticeable motivation for the recurring interest on that segment which has prompted the investigation of the factors that affect firm survival for that size class. The empirical literature, focused on developed countries, and has triggered controversies associated with size measurement and estimation issues [see e.g. Davis et al. (1996) and Davidsson et al.(1998)]. Evidence seems to indicate, as expected, that the net job creation effect is likely to be stronger in service industries. Nevertheless, more recent studies provide appealing evidence on particularly high net job creation by small firms also in the context of the manufacturing industry as suggested by Hijzen

Mathur S P (1992), tried to explore the reasons behind sluggish growth of small scale sector, inspire of states encouragement in various ways since independence. The factors responsible for that the improper utilization of raw materials, manpower, capital resources and the study traced out that inadequate supply of fixed and working

In his book (Prasad C. S., 2004) has predicted the vision of SMEs up to 2012, regarding the employment generation and open economic development of trade from India. The author explained that due to Liberalization, Globalization and WTO a rethinking is being made to analyse the targets before the SMEs sector. The author suggested that with the inherent advantage of flexibility and innovativeness of the sector, the major constraints of economies of scale could be met by adopting the cluster development and formulation of appropriate policies. The book is based on the compilation of the various articles of the author published in different journals on the theme of WTO and SMEs, SMEs financing, SMEs policy, Employment Generation in SMEs and Export potential and cluster development among SMEs etc.

If efforts are put towards promoting SMEs, particularly, the likes that are concerned with the informal sector, achievement of development that is sustainable is inevitable. Most developing as well as developed countries depend on the small and micro enterprises in the provision of employment. Even though a number of small and medium-sized enterprises are not part of the formal sector that is