Small Business and Entrepreneurship
Small Business
Small businesses operate on a relatively limited scale and often contribute to employment, local production, innovation and regional development. Their exact classification depends on the applicable legal and regulatory framework.
Entrepreneur
An entrepreneur identifies opportunities, organises resources, takes calculated risks and creates or develops an enterprise. Entrepreneurship involves innovation, initiative and decision-making under uncertainty.
Role in the Economy
Small enterprises can support employment, entrepreneurship, balanced regional development, use of local resources and supply chains for larger businesses.
Challenges
Common challenges include access to finance, technology, skilled labour, marketing, infrastructure, competition and regulatory compliance.
Explained MCQs
- Why is calculated risk-taking associated with entrepreneurship?
Answer: Entrepreneurs make decisions under uncertainty after assessing possible outcomes.
Explanation: Entrepreneurship is not reckless risk-taking; it involves identifying opportunities and managing uncertainty. - How can small businesses contribute to regional development?
Answer: By creating local employment and using local resources and supply networks.
Explanation: Their operations can distribute economic activity beyond major urban centres.