Question

State with reasons whether the following statements are true or False.

Sickness is very common in small business.

Answer 1

Sickness is very common in small business- True

Explanation:
Sickness simply means the financial instability faced by small-scale firms. There are various causes (external or internal) that results in sickness of the small business units.

Internal Causes- These are the causes that exists within the business units. Few of which are listed below

i. Due to low budget, small businesses usually faces problem of insufficient skilled labourer. There is absence of managerial skills as well.
ii. There is no proper mechanism of cash collection which results in losses.
iii. There is lack of proper planning which causes inefficiencies in business units.

External Factors- These are the causes that exists outside the business units. Few of which are listed below

i. Banks and financial institutions do not give out loan to the small business easily. Hence, there is shortage of funds in small business units.
ii. Small business units faces a lot of competition from the big business houses, MNCs, etc.
iii. Big business houses or government sometimes delays the payment of small business units.

Hence, all these causes leads to sickness in small business units. Thus, sickness is a common problem in small businesses.