Here we are providing Business Studies Class 11 Important Extra Questions and Answers Chapter 9 Small Business and Entrepreneurship. Business Studies Class 11 Important Questions with Answers are the best resource for students which helps in class 11 board exams.

Class 11 Business Studies Chapter 9 Important Extra Questions Small Business and Entrepreneurship

Small Business and Entrepreneurship Important Extra Questions Short Answer Type

Question 1.
Write the full form of the following:
SIDO, KVIC, DIC, LPG, NABARD, RSBDC, NSIC, StDBI, NCEUS, RWED, WASME, SFURTI, DWCRA, TRYSEM, WTO.
Answer:

(i) SIDO Small Industries Development Organisation
(ii) KVIC Khadi and Village Industries Commission
(iii) DIC District Industries Centers Liberalisation, Privatisation and Globalisation
(iv) LPG Liberal isation. Privatisation and Globalisation
(v) NABARD National Bank for Agriculture and Rural Development
(vi) RSBOC Rural Small Business Development Centre
(vii) NSIC National Small Industries Corporation
(viii) STDBI Small Industries Development Bank of hid la
(ix) NCEUS The National Commission for Enterprises in the IJnorganised Sector.
(x) RWED Rural and Women Entrepreneurship Development
(xi) WASME World Association for Small and Medium Enterprises
(xii) SFURTI Scheme of Fund for Regeneration of Traditional Industries
(xiii) DWCRA Development of Women and Children in Rural Areas
(xiv) TRYSEM Training of Rural Youth for Self-Employment
(xv) WHO World Health Organization

Question 2.
Compare different small scale business on the basis of the investment.
Answer:

Types of Industries Investment Unit Remarks
Small Scale Industry One crore Up to 5 crores in export
Ancillary Industry One crore 50% of output should be supplied to a parent unit
Tiny Enterprise 25 lakh —
Service and Business enterprise 10 lakh —
Women Enterprise Any of the above 51% equity holding by women and managed by women.
Export Oriented Unit One crore 100% EOU can sell 25% in the domestic market.

Question 3.
Name the major industry groups that come in the small scale sectors.
Answer:
The following major industry group comes in the small scale sectors:

  1. Food Products
  2. Paper Products and Printing
  3. Chemical and Chemical Products
  4. Basic Metal Industries
  5. Electrical Machinery and Parts
  6. Rubber and Plastic Products
  7. Machinery and Parts expect Electrical Goods
  8. Hosiery and Garments – wool product
  9. Non-metal lie Mineral Products
  10. Transport Equipment and Parts
  11. Leather and leather products
  12. Miscellaneous Manufacturing Industries
  13. Beverages, Tabacco and Tobacco products
  14. Repair Services
  15. Cotton Textiles
  16. Wool. Silk, Synthetic Fibre, and Textile
  17. Jute, Hemp, and Mesta Textiles
  18. Other Services.

Question 4.
What are the different forms of support offers to small industries by the Government?
Answer:
The Government provides support to anal industries in the following forms:

  1. Institutional support in respect of credit facilities.
  2. Provision of developed sites for the construction of sheds.
  3. Provision of trading facilities.
  4. Supply of machinery on hire purchase terms.
  5. Assistance for domestic and export marketing.
  6. Technical and financial assistance for technological Upgradation.
  7. Special incentives for setting up enterprises in backward areas.

Question 5.
What are the main characteristics of a small business?
Answer:
Any small business is characterized by at least two of the following key features:

  1. Management is independent. Usually, the managers are also owners.
  2. Capital is supplied and ownership is held by an individual or a small group.
  3. The area of operations is mainly local. Workers and owners are of one home community. Markets need not be local.
  4. Relative size within the industry the business is small when compared to the biggest units in its field. The size of the top bracket varies greatly so that what might seem large in one field would be definitely small in another.

Question 6.
Distinguish between cottage and small scale industries.
Answer:
The basis of classification between the cottage and small-scale business is that the cottage industry embraces a predominantly manual process of work.

The difference between the small-scale and cottage industries are basically two:

  1. Small-scale industries are mainly located in urban centers as separates establishments, the cottage industries are generally associated with agriculture and provide subsidiary employment in rural areas.
  2. Small-scale industries produce goods with partially or wholly mechanized equipment employing outside labor, while cottage industries involve operations mostly by hand which is carried on primarily with the help of members of the family.

Question 7.
What are the main objectives/features of small scale business?
Answer:
Objectives of small-scale business:

  1. To provide an opportunity for large-scale employment at a minimum cost.
  2. To provide a steady source of income to the low-income groups living in rural and urban areas of the country.
  3. To meet the growing demands of the consumer’s goods and simple producers goods.
  4. To mobilize resources of capital and skill and their optimum utilization.
  5. To eliminate the economic backwardness of rural and underdeveloped regions in the country.
  6. To attain self-reliance.
  7. To reduce regional imbalances.
  8. To effect an integration of the activities of a small business with the rural economy on the one hand and with the large scale business on the other.
  9. To reduce disparities in income, wealth, and consumption.
  10. To provide substitutes for various industrial products now being imported into the country.
  11. To improve the quality of industrial products manufactured in the cottage industry sector and to enhance both production and exports.
  12. To remove the problems created by urbanization and the consequent growth of big towns and cities.

Question 8.
Discuss the role and importance of small-scale enterprises in the economic development of India?
Answer:
The small-scale sector promotes entrepreneurship and helps to earn foreign exchange and is very important to the Indian economy.

The following points will highlight the importance of small scale enterprises.

  1. Innovation and productivity: It is the small-scale enterprises that lead to innovation and productivity although they do not maintain their own research and development wings.
  2. Individual tastes, fashion, and personalized service: Small- scale firms are receptive to change in taste and fashions of consumers and in adjusting the production process accordingly.
  3. Symbols of national identity: They are locally owned and controlled. They can strengthen the social system and cultural traditions of India. They are perceived as valuable symbols of national identity.
  4. The tendency of dispersal over wide-area: Small-scale enterprises have a tendency to disperse over wide areas. More than 62.19% of the units are located in the backward areas.

Question 9.
What type of problems faced by small scale sector in the field of marketing?
Answer:
Problems faced by the small scale sector in marketing their products are briefly enumerated below:

  • Lack of standardization.
  • Financial weakness.
  • Unfamiliarity with expert activities-procedures and market know-how.
  • Poor designing.
  • Poor quality.
  • Ignorance of potential markets.
  • Competition.
  • Lack of quality control.
  • Lack of precision.
  • Lack of knowledge of marketing.
  • Distribution contacts.
  • Poor finish.
  • Poor bargaining power.
  • Brand preferences.
  • The scale of production.
  • Lack of service after-sales.