A small scale enterprise (SSE) is a business that operates on a limited scale in terms of capital investment, number of employees, and production capacity. It typically involves minimal manpower and fewer machines, producing goods or offering services with relatively low financial turnover and resource use
Key Characteristics of Small Scale Enterprises:
- Limited number of employees, often fewer than 50, with some definitions extending up to 250 for small and medium enterprises (SMEs)
- Low capital investment, often capped at specific thresholds (e.g., less than Rs.10 crore investment on equipment and plant in some regions)
- Usually under single ownership or partnership, with the owner actively involved in daily operations
- Use of local or readily available resources, with minimal wastage and a focus on regional markets
- Labor-intensive rather than technology-intensive, supporting employment in the community
- Flexible and adaptable to changes in policies or market conditions due to their small size
Examples of Small Scale Enterprises:
- Local bakeries, paper and pen manufacturing, candle making, beauty parlors, toy production, and leather goods
Role in the Economy:
Small scale enterprises are crucial for economic development as they create numerous employment opportunities, contribute to regional economic activity, and often serve niche or local markets. They are considered the backbone of many economies due to their sheer numbers and employment generation
. In summary, a small scale enterprise is a business entity characterized by limited scale in employment, capital, and production, often locally owned and managed, playing a vital role in employment and economic growth
