Small scale enterprises are businesses characterized by limited resources, smaller scale of operations, and fewer employees compared to larger enterprises. They generally operate with modest capital, limited machinery or equipment, and smaller revenue or turnover. Definitions vary by country and industry, but common features include:
- A lower number of employees, often fewer than 50 or up to 500 depending on the context.
- Limited financial turnover and investment in machinery or equipment (for example, in India, investment up to ₹10 crore and turnover not exceeding ₹50 crore define small scale industries).
- Operation mainly at a local or regional level with a focus on serving nearby markets.
- Typically labor-intensive with less automation.
- Ownership tends to be independent, often proprietorships or partnerships.
- They contribute significantly to employment, innovation, and economic development.
Examples include small manufacturing units, service providers, and agro-based industries. Small scale enterprises play an important role in fostering entrepreneurship, generating employment, supporting regional growth, and utilizing local resources effectively. They often qualify for government schemes, incentives, and financial supports aimed at their development. In summary, small scale enterprises are businesses that operate on a smaller scale in terms of workforce, capital, and output, compared to medium and large enterprises, with varying thresholds defined by governments or industry standards.
