What Is a Small-Scale Industry?

A small-scale industry is a project or firm created on a small budget or for a small group of people. A small-scale industry produces its goods using small machines, less power and hired labor. It is located within a single place and produces goods meant for few people.

Small-scale industries are easy to start and manage given the minimal scale of production. They are set up to cater for the basic needs of the people within their locality. An example of a small-scale industry is a laundry or small kiosk created to cater to the individual needs of the people in the area in which it is located. These businesses require little starting and operating capital. They require cheap labor that is easily found and their target market is the host community. Such companies also realize a small annual turnover and, as a result, pay fewer taxes. The classification of the industry as large or small scale depends on the rate of production and the number of employees. An industry with a low rate of production and fewer employees is a small-scale industry. Most governments implement policies that strengthen the small-scale industry sector because of the role the industries play in economical development. The industries help in alleviating poverty through provision of employment and other products.