Advantages of Small Scale Production

Small Scale Production

Small Scale business is very popular type of business in the world. Many people are involved in this business because they have no large amount to setup new factory or partnership with others. So they run their business in small level and their profit are also minimized. There are many advantage of small scale production in which some of as under:

Personal Element

In small scale production the small scale producers has personal contact with the employees. He can supervise his business himself so those businesses which require personal supervision can only be established at small scale. Due to personal supervision, production increases and the possibility or dishonesty of the labor is minimum hence cont of production does not increase faster.

Direct Relation with Consumers

The goods produced in small scale are generally sold in the nearer markets hence he does not ignore individual tastes and customs of the people.

Better Relation with labor

In small scale production the number of workers are not large hence personal relation develop with the labor and  kind word is thrown now and when which rules out the possibility of strike or any other trouble. He understands their problems and tries to solve and as a result, labor work hard.

Prompt Response to Change in Demand

Another advantage of small scale business is that he an increase or decreases its production according to increase or decrease in demand easily.

Prompt Decision

He is capable of prompt decisions and quick execution about the output, supply and demand price. There is no divided responsibility. He is the sole proprietor so the find no difficulty in taking quick decisions.

Better Distribution of Wealth

The small scale business can be started with less capital hence small businesses are established which increases circulation of money and avoids concentration of wealth. Does not need Elaborate System of Accounts

The small scale business does not need elaborate system of accounts and checks to prevent fraud or eliminate waste of labor or material.

Non Dependence of foreign Markets

The small scale manufacturer purchases raw material from the domestic markets and sells its product in the domestic markets hence he is free from external effects and runs business without any fear.

Adaptability

The small scale producer can easily switch over to another business because he is the sole proprietor and needs not to consult with his partners or share holders.

No Danger of Over Production

As the smaller quantities are produced and there are large number of producers so there is no danger of over production and monopolies