Small Business Class 11 Notes CBSE Business Studies Chapter 9

Class 11 Business Studies Chapter 9 Notes – Small Business

Chapter 9 of Class 11 Business Studies examines the various types of small businesses operating in India, their effects and the advantages and constraints they face from government initiatives. A Business which operates on a minor scale and has less equipment, less labour and requires less capital is called a Small Business. 

Extramarks provides Revision Notes for Chapter 9 of Class 11 Business Studies that cover the CBSE syllabus for quick preparation for exams with a comprehensive text which is easy to understand. 

Chapter 9 Business Studies Class 11 Notes – Free Solutions

Micro, Small and Medium Enterprises- Introduction

Micro, small and medium-sized businesses are the enterprises that:

• Serve as a key link in the industrialisation process.
• Aid in the growth of developing nations.
• Assist in creating job opportunities.
• Have low investment requirements.
• Entail a lot of labour.
• Are an essential component of the value chain.
• Utilise regional raw materials.
• Make use of native skills.
• Offer a wide range of general and niche products.

MSMED Act

The Micro, Small and Medium Enterprises Development Act of 2006 addresses issues and provides guidelines for micro, small and medium-sized businesses in the manufacturing and service sectors.

Examples of MSME Businesses can be Leather products, Moulding – This includes products like combs, umbrella frames, plastic toys, natural fragrance and flavours, placement and management consultancy services, training and educational institutes, and energy efficient pumps, xeroxing, beauty parlour, tailoring, etc.

Investment and Turnover Limits Under MSMEs

MSMEs are no longer divided into the manufacturing and service sectors as they were in the past; instead, both are treated as one and the same entity and are defined using the same metric. The investment and turnover limits are as follows:

Micro: Investment- Upto 1 crore/Turnover- Upto 5 crores

Small: Investment- Upto 10 crores/Turnover- Upto 50 crores

Medium: Investment- Upto 50 crores/Turnover- Upto 250 crores

Village Industries

These include industries in rural areas that invest in fixed assets in accordance with federal regulations.

Cottage Industries

Traditional businesses typically run by families with modest financial resources fall under the category of cottage industries.

Role of Small Business in India

• Opportunities for Employment: After the agriculture industry, it is the small businesses that offer the most employment opportunities.
• Diverse Variety: Small businesses use straightforward technology and neighbourhood resources to offer a wide range of consumer and specialised goods.
• Optimum utilisation of resources: Small businesses that make use of straightforward technology and locally available resources are able to make the best use of resources possible.
• Encourage Locals: It makes the best use of local people’s handicraft and other artistic abilities while providing for and encouraging their entrepreneurial endeavours.
• Less Expensive: Production costs are low because of low overhead expenses and the use of reasonably priced local resources.

Role of Small Business in Rural India

• Encourages the establishment of agro-based industries by rural residents.
• Giving traditional workers or artisans job opportunities.
• Reduces income inequality by contributing.
• It stops the tendency and migration of rural residents to urban areas.
• Aids in rural development and industrialisation.

Problems Associated with MSMEs

• Finance: These businesses have limited finance options, which makes daily operations challenging. It is also difficult for these companies to get bank financing because of their poor credit standing.
• Raw Materials: Since some raw materials aren’t readily available, these businesses must adapt and make compromises by using low-quality or expensive raw materials. Both situations make the problems with such businesses worse.
• Managerial Skills: A family-run or one-person-operated business that lacks managerial, technical and entrepreneurial skills. The lack of education also makes things more challenging. Due to a lack of financial resources, they are therefore unable to manage the businesses on their own or hire others to do so.
• Production assisted by unskilled or partially skilled labourers
• Marketing: Since it is difficult for these businesses to keep in touch with customers directly, they must rely on middlemen, who in exchange for lower prices or longer payment terms take advantage of them to the hilt.
• Quality: These businesses struggle to uphold standardised quality due to their use of traditional production techniques.
• Technology: Using old, out-of-date technology results in problems with high costs and poor quality.
• Competition from large industries and multinational corporations must be considered on a global scale.
• Under-utilisation of resources occurs as a result of poor managerial abilities and insufficient demand to use the machines’ full production capacity.

MSME and Entrepreneurship Development:

The process of starting a business that is owned, managed and controlled by a person who takes the initiative to take the risk, and add creativity and innovation to start an enterprise is known as entrepreneurship.

Characteristics of Entrepreneurship

• Systematic Activity: Training, observation and work experience can all be used to develop the skills, knowledge and competencies needed for entrepreneurship.
• Legal and Purposeful Activity: Entrepreneurship is all about running a legal business. Entrepreneurs seek to start and operate businesses by acting legally, meeting the needs and wants of customers and abiding by the law and moral principles.
• Innovation: Entrepreneurship entails coming up with something new in response to a changing business environment or possibly to cut costs and increase profits.
• Organisation of Production: Different production factors are brought in by entrepreneurship for productive activity, and both the production factors and the employees’ efforts are coordinated and controlled.
• An entrepreneur takes a risk by promising to pay employees and investors interest despite the future outcome.

Startup India Scheme: The Scheme Aims to do the following:

• Encourage individuals to start their own businesses.
• Promote more vigorous startup growth.
• Support MSMEs in their early stages of development.
• Empower scheduled castes, women and other disadvantaged groups.

Intellectual Property Rights:

• The legal rights pertaining to intellectual property are referred to as intellectual property rights.
• The term “intellectual property” describes works of art, inventions and other products of the human mind.
• Intangible property is intellectual property.
• A trade secret is a type of intellectual property that protects confidential information and gives the company that owns it a competitive advantage.
• There are two main categories of intellectual property: 
  • Industrial property includes things like patents, trademarks, geographic indications and industrial designs.
  • Copyrights protect works of art and literature, including, but not limited to, poems, books, plays, movies, drawings and photographs.
• Copyright, Trademark, Regional Indication, Patent, Design and Plant Diversity Design of Semiconductor Integrated Circuits are among the IPs recognised in India.

Why is IPR Important for Entrepreneurs?

IPR is crucial for entrepreneurs to market and safeguard their inventions and works of art.

The only way for creators, authors, inventors, etc. to profit from their labour is if their work is shared with the public with their permission.

IPR can be used to argue in court for the right to use, create, or sell the work in addition to protecting it from being copied by others.

Types of Intellectual Property

• Copyright: The creator’s right to prevent unauthorised use of their work is known as copyright. Although content registration is not required, it is necessary to use exclusive rights in the event of an infringement.
• Trademark: It includes items such as labels and logos, which aid in differentiating the goods produced by various businesses. There are two types of trademarks: conventional and non-conventional.
• Patents: The making, selling and importing of scientific inventions are all protected by patents. A patent is a government-granted exclusive right that gives the “right to exclude” for 20 years.
• Design: The shape, pattern, colour and arrangement of any goods in the warehouse or godown are all part of the design. The design can be protected for 10 years, and after that, it can be renewed for another 5 years.
• Plant diversity: It aids farmers in preserving and enhancing genetic resources that are already available. The diversity of plants in India encourages farmers and cultivators to produce high-quality seeds and planting materials, which boosts the sector’s growth.
• The products that use and are made on a semiconductor material are known as semiconductor integrated circuits (SICs). The chip is an essential component of computers.

Class 11 Business Studies Chapter 9 Revision Notes – Small Business

Highlights of Business Studies Class 11 Notes Chapter 9

• The administrative structure of agricultural, rural and small-scale industries
• The function of Indian small business
• The function of Small businesses in rural India
• Issues facing small businesses
• Government support for small businesses and industries

What are the Categories in Which Enterprises are Classified Into?

Enterprises can be categorised into two:

• Manufacturing: Micro, small and middle-sized businesses are the three different types of manufacturing enterprises.
• Services: There are three different types of service-related businesses, namely micro, small and middle-sized businesses.

Notes of Chapter 9 Business Studies Class 11: Role of Small Businesses in India

The students will learn from the chapter that small businesses employ the second-highest number of people, behind agriculture. Additionally, they comprise 95% of the industrial units and 40% of the gross industrial value. Small business also includes low-cost production.

Small businesses provide rural households in India with access to a wide variety of income sources. These small businesses also clear the way for the growth of rural and village industries, preventing the rural population from migrating. A majority of small businesses are consumers of surplus labour and producers of consumer goods, which effectively addresses the problems of unemployment and poverty.

Various Kinds of Problems for Small Businesses

Small businesses often face difficulties in the following areas:

• Finance
• Raw material
• Management abilities
• Labour
• Marketing
• Quality
• Efficiency of Capacity
• Technology
• Sickness
• Global Rivalry

What Are The Various Kinds of Incentives Given to Small Industries By The Government?

• Land
• Power
• Water
• Sales Tax
• Control
• Raw materials
• Finance
• Industrial estates
• Tax holiday

Five Core Objectives of Marketing Assistance Scheme

The five main goals of a marketing assistance programme are listed as follows:

• To introduce the MSME contest
• To increase the capabilities and competitiveness of MSME
• To open up the possibility of communication with significant institutional buyers
• Current developments and their effects on MSMEs
• To spread various government programmes