Small Business - Solutions

 CBSE Class 11 Business Studies

NCERT Solutions
Small Business


1. What are the different parameters used to measure the size of business?

Ans. Following parameters may be used to measure the size of business:

(a) Number of workers employed

(b) The amount of capital invested

(c) Total output

(d)The value of annual turnover

2. What is the definition used by government of India for Small Scale Industries?

Ans.The definition used by the government of India for small scale industries is one in which the investment is fixed assets of plant and machinery does not exceed Rs 1 crore. However, to cater the needs of small industries whose thrust is on export promotion and modernisation, investment in plants and machinery is 5 crores.

3. How would you differentiate between an ancillary unit and a tiny unit?


Basis of difference

Ancillary Industrial Units

Tiny units


Industrial units that have to supply a minimum of 50% of their production to their parent industries are termed ancillary industrial units.

Industries that have a maximum investment of? 25 lakh in their plant and machinery are termed as tiny industrial units.


Such units have to supply at least 50% of their production to their parent industries.

No such obligations.

Investment limit

The maximum level of investment is ? 1 crore.

The maximum level of investment is ? 25 lakh.


Industries engaged in the production of machine parts, tools and other intermediate products.

Business units such as small shops boutiques, STD (subscriber trunk dialling) booths and photocopy centres.

4. State the features of cottage industries.

Ans. The following are a few important features of cottage industries.

1. Simple equipment: Simple equipment are used in the production of goods.

2. Indigenous technology: Indigenous technology is used for producing goods.

3. Individuals: These industries are organised by individuals having private resources.

4. Investment: Small amount of capital is invested in the production.

5. Simple products: Production of simple products in their own premises.

6. Family labour: Cottage industries use family labour and locally available talent.