Reasons for sickness of Small Scale Enterprises


The Small Scale Enterprises are the organizations which are established using relatively less capital when compared with medium and large scale enterprises and have many promotional initiatives, tax concessions, etc from the government. The capital requirements of a Small Scale Enterprises is as follows,

  • Between 10 lakhs to 2 crores in case of service sector
  • Between 25 lakhs to 5 crores in case of the manufacturing sector.


  • Locational Disadvantage
  • Uneconomic size of the project
  • Inadequate technical knowledge
  • Poor capacity utilization
  • Poor Inventory management
  • Poor labor productivity
  • Over-estimation of demand
  • Large investment in fixed costs
  • lack of timely and adequate modernization
  • Lack of trained and technically competent personnel
  • Lack of timely diversification
  • Lack of professionalism
  • Lack of market feedback and market reasearch
  • Ineffecient handling of labor problems
  • Incompetent management
  • Inadequate working capital.

The list goes on like this, the small scale enterprises and industries must be very carefull in their planning and operational activities. The Small scale enterprises are prone to heavy loses due to many reasons and some of them are stated above.

cost-benefit analysis

Cost and Benefit Analysis

Micro Enterprises and Their Objectives

Micro Enterprises and Their Objectives