NCERT Solutions for Class 11 Business Studies – Chapter 9 – Small Business

Business Studies has great importance as it plays vital roles in our day-to-day life 

It teaches us how to manage money and purchases. To ensure that students learn all the important concepts of Business Studies, CBSE has prepared a comprehensive syllabus for Class 11. It talks about small businesses, the nature of small scale industries, problems of small businesses, NABARD, NSIC, SIDBI, and other government bodies, and many more topics.

The NCERT Chapter 9 Small Business covers all the aspects in detail. To understand the chapter well, students should solve the practise questions given at the end of the chapter. They can refer to NCERT Solutions for Class 11 Business Studies Chapter 9 to get answers to all the questions given in the NCERT textbook.

Class 11 NCERT Solutions Business Studies – Chapter 9

Access NCERT Solutions for Class 11 Business Studies Chapter 9 – Small Business

NCERT Solutions for Class 11 Business Studies Chapter 9 Small Business

Businesses generally talk in-depth about concepts like accounts and finances, human resources, marketing stuff, and trade. The range of topics in Chapter 9 is designed to give the students a general overview of the various elements of running a business. It gives students a clear understanding of small businesses and how they are started. 

Small Business 

A business that functions on a small-scale involving less capital investment, less labour, and fewer machines to operate is known as a small business. The term “small” can be defined in terms of being able to apply for government support and qualify for preferential tax policy — which varies by country and industry. Small scale Industries are the types of industries that produce goods and services on a small scale. However, it can be more potent in a smaller business, and internal interactions can be made more straightforward.

Categories of Small Business 

1)Small Scale Industry (Before 2006)

  • A small scale industry invests in fixed assets of machinery and plants, which do not surpass one crore.

2) Ancillary Small Industrial Unit

  • An  industry can hold the status of an ancillary small industry if it supplies a minimum of 50 per cent of its product to another business, i.e., the parent unit.
  •  They have an individual or a combined share capital minimum of 51 percent.

3) Tiny Industrial Units

  • It is an Industry or a company whose expenditure on machinery and plant does not exceed Rs. 25 lakhs.

4) Small Scale Service and Business

  • It’s an industry whose   investment on machinery and plant excluding land and building does not exceed  Rs. 10 lakhs.

5) Micro Business Enterprises

  • It is a small business  run by owners generally for supporting themselves and their families 

6) Village Industries

  • The industries, located in rural areas which manufacture any products or render any service with or without the utilisation of power are called village industries.

7) Cottage Industries

  • It is also known as a traditional or rural industry in which business is generally carried on in people’s homes.

Some other types of businesses are also prevalent such as  auto repair, beauty salons, etc.

Characteristics of Small-Scale Industries

-Ownership

Small Scale Industries are generally under single ownership. So, it can either be a sole proprietorship or sometimes a partnership.

-Flexibility

Small Scale Industries are more adaptable to their changing business environment. So, in case of amendments or unexpected developments, they are flexible enough to adapt and carry on, unlike large industries. 

-Resources Utilisation

They use local and readily available resources which helps the economy fully utilise natural resources with minimum wastage.

Most Popular Small Business

  • Food Services 
  • Health Care
  • Cafés 
  • Local Auto Repairs
  • Second hand (Online) Stores
  • Personal Trainers
  • Entertainment
  • Real estates

The Secret to Finding a Business Idea 

The secret behind business ideas is that you need to be organised and put effort into thoroughly  and solidly list out the practical business ideas. Then you need to carefully assess which ones you like the most and have a strong belief in.

How Can House Cleaning Be a Small Business?

House cleaning is very important because it ensures a healthy living atmosphere. It impresses a positive impact on the guest and improves the standard of living in the house. Cleaning the entire house is a tough job and takes lots of time. It is one of the most popular small businesses because everyone wants a house cleaner. Above all,  the work is repetitive.

Solved Examples: 

What kind of business is best?

  • Automobile repair
  • Tiffin service
  • Electronics repair
  • Blogging as a small business
  • Private tutoring
  • Pet-care service
  • Educational mobile apps
  • Bake the cake
  • Handyman
  • Woodworker
  • Online dating consultant

and many more small businesses are included.

FAQs (Frequently Asked Questions)

Small businesses play an important role in the development of rural India as well as the Indian economy at large. Small scale industries such as cottage industries and rural industries help in providing job opportunities to the rural population. They help the rural people overcome poverty by becoming economically stable. Small scale industries provide employment throughout the year and help the rural population combat seasonal employment caused by seasonal activities such as agriculture. 

The first challenge faced by the small-scale industries is that they lack funds and are mostly self-financed. It has only a few external funding sources such as lenders or the local financial agencies. The second challenge is the shortage of raw materials due to the lack of funding and proper functioning in rural areas. The third challenge is the lack of efficiency as the labourers hired are semi-skilled and less efficient due to which they have low wages as well

Small scale industries face the following problems:

  1. There exists a lack of funds for people starting in this sector as the investment is mostly self-financed and the other source of funds can be from moneylenders or local financial agencies or agents.
  2. Small industries often face a shortage of raw materials due to the unavailability of finance, also lack a proper supply chain and logistics in rural areas resulting in a shortage of raw materials that hinder proper functioning.
  3. As the wages are less, they can only  hire semi-skilled labourers which results in a lack of talented manpower that impacts their efficiency.
  4. The small-scale industries are unable to spend more on marketing due to a lack of funds.

Cottage industries are characterised by the following features:

  1. These industries are owned by individuals who have invested their resources into these units.
  2. Such types of industries do not hire many labourers, it is mostly operated by family members.
  3. Skills required for maintaining a cottage industry are available within particular families.
  4. The amount of capital invested is very less.
  5. Production techniques are indigenous which requires labour-intensive work.
  6. The production is primarily for consumption by self and family, while some portion of it is sold in the market to earn some money.

 A few steps you can follow to start your small business are:

  1. Market research:

Market research will tell you if there’s a chance to turn your idea into a successful business startup or not.

  1. Write your business plan:

The plan you make is the foundation of your business. It’s a route for how to structure, run, and grow your new business.

3) Pick your business location

4) Choose a business structure

5) Choose your business name

6)  Register your business

7) Apply for licences and permits

8) Open a business bank account

It’s a long process to follow but if you’re patient, you are likely to succeed. You need to keep  putting  effort into starting up a business. You need to do a lot of research work. Putting in your strategy and mindset will make the path towards success.