Small businesses refer to the size of businesses. Businesses that are in rural areas have significant purposes that differ from the businesses existing in metropolitan cities. Small businesses are owned and controlled by limited people. These businesses are usually privately owned businesses. Some common types are sole proprietorship, corporation, or partnership firms. Such businesses usually have a small number of employees.
Small businesses get certain kinds of rights from the government of India, in terms of financial aid and tax redemption. Less amount of capital is needed to be invested to build a small business in rural areas. Even a single person can start and run small businesses. As a result, they get low-profit margins and low annual turnover.
Small businesses in rural areas have their own advantages and disadvantages. For instance, a small business in a rural area can be a monopoly for not having any competitor in that area. This is an advantage that we need to consider. On the other hand, small businesses in rural areas can miss out on a large number of remarkable opportunities that are available in metropolitan cities.
Every business plays a role and that depends on its size and location. People say small businesses in rural areas are usually detached from the rest of the world and for that reason they miss out on the global opportunities.
If you own a small business that is situated in a rural area of India then this blog might help you. If you want to start a small business then you can contact a consultant for getting effective recommendations.
In this blog, you will be able to find out some major roles that are played by small businesses in rural areas in India.
Roles of Small Businesses in Rural India
The roles of small businesses depend on the type of company. Though the businesses play some common roles and contribute to the economy of India. Some roles are mentioned below.
Generates Employment
It has been observed that in rural areas there is less number of businesses and companies. Due to less number of businesses, the employment rate also tends to be lower than in the cities. Small businesses in the rural parts of India help to generate employment.
Some common small businesses in rural areas are labor-intensive. There is no proper infrastructure or facilities for giving proper training and education to the candidates. That is why small businesses employ unskilled candidates for their business operations. In fact, these types of employees do not charge much and the salary tends to be lesser.
As a result, small businesses in rural areas generate employment opportunities which is a considerable positive contribution to the rural society in India. This also helps in reducing poverty and improving the economic condition of rural areas.
Reduces Rural to Urban Migration
It is quite obvious when there is no or less employment in rural areas, people naturally build a tendency to migrate to urban cities. They migrate for getting introduced to large and diverse opportunities that they miss out in rural areas.
Small businesses operating in rural areas, provide employment opportunities, and naturally, the local people stick to the rural places. This is how small business from rural places helps in reducing rural to urban migration.
If people can experience a better standard of living in rural areas then there is no need for putting themselves in uncomfortable and challenging situations. It plays a role in rural development.
Utilization of Local Resources
Rural areas in India are enriched with different resources. These resources are cheaper and sufficient for the rural people. People get access to cheap raw materials, barren land, and labor.
Industries that are built in such places make the best utilization of all these resources. It boosts the rate of industrialization. Without proper utilization, the resources would turn into waste and unused. The utilization is also important for rural development.
In fact, businesses that are situated in the urban cities also seek resources from rural areas. It is because they want to purchase resources at a cheaper price rate and utilize them and want to sell them at a high price, as a result, the profit margin increases.
Promotes Rural Development & Growth
The major concern in rural areas is the development and growth factor. These two things are the important roles played by industries located in rural areas. Small businesses bring capital to rural places because investors from outside also invest in rural businesses.
It helps companies in rural areas to grow and generate more revenue. It boosts the economic condition of rural places. Several developmental programs emerge for such scenarios. A large number of people get employed because of these industries and companies.
Equitable Distribution of Income
Small businesses in rural areas create employment opportunities and it brings a hand full of positive impacts or outcomes. The resources are also available at a cheaper price which helps entrepreneurs or business-minded people to build their businesses with low investment. As the business grows it keeps the rural people in the rural places. In the end, it creates scope for development and growth in rural places.
For all these factors, two positive outcomes have been observed.
- Encourages individuals to build businesses in rural areas.
- More and more small businesses operate in the country.
These two positive outcomes also create a positive byproduct and that is the reduction of the concentration of wealth. It means the gap between the rich and poor decreases and equal distribution of income gets generated. It is a way of removing inequalities of income among people.
Improves Standard of Living
People often heard that there are not many facilities and opportunities in rural areas comparative to the urban cities. Some people also say that urban citizen gets more privileges. We need to understand why does it happen?
Lack of income, resources, facilities, opportunities, and infrastructure creates a low standard of living. Industries that are situated in rural areas always aim to improve the standards of people living. The businesses cater to all the needs and demands of the rural population.
They make it possible by creating better quality products at a cheaper cost for the rural population. This also leads to income sources for a large number of rural citizens. That is why rapid growth of industrialization is needed for a better standard of living.
Increase in Tax Revenue
Not only in the urban places but there are also a large number of industries that are operating in the rural areas all over the country. These industries work efficiently and generate sufficient revenue. Just like any other industry or business, the industries in rural areas are also required to pay taxes to the government on their incomes.
When there will be more industries operating, the revenue of the government will also increase generally. So, more industries mean more revenue to the government. The revenue that is being generated for the government is used for various rural development programmers.
Some Profitable Businesses in Rural Areas in India
As we talked about the roles of the small businesses in the rural areas of India, now it is time to know some of the most profitable businesses that can be developed in rural India. Not all businesses work in such places, you need to think about which ones are the most suitable. We have mentioned some of the profitable businesses so read further.
- Retail business.
- Flour mill business.
- Small manufacturing business.
- Service-oriented business.
- Tutoring business.
- Medical shop.
- Any sort of farming business.
- Dairy business.
- Organic vegetables and fruits business.
- Fertilizer business.
- Fishery business.
And many more.
Common Characteristics of Small Businesses
Small businesses possess a high competitive temperament because they desire to compete in the industry and grow bigger in size. That is why they are willing to take risks because it is bearable for them.
Small business owners are also driven to succeed because they have the hunger to be established. They are highly focused on achieving goals, which include short-term and long-term objectives and plans.
Small business owners have some remarkable traits such as confidence, enthusiasm, and passion. Small business owners and managers always seek reasonable options to cut down unnecessary expenses. The finances are being taken care of by the finance department of a small business. The business is also open to change.
Small businesses in rural areas are always seeking to catch global opportunities and facilities. Rural business owners want to connect with established companies. They have the tendency to tie up urban brands.
FAQ (Frequently Asked Questions)
i) What is The Major Role of Small Businesses in a Local Economy?
Ans:- Small local businesses bring job opportunities and revenue to the local economies and community. It is done by offering jobs, local products, and services, paying sales and different sorts of taxes, and using vendors and supporting services.
ii) How do Small Businesses Help The Communities of a Country?
Ans:- Small local businesses provide taxes and that fund goes to the development and welfare purpose of a local community. This type of tax is also known as a local tax. This monetary contribution helps communities to improve by developing the necessary infrastructure and acquiring essential resources.
iii) What are Some Remarkable Benefits of Businesses in a Local Community?
Ans:- Some remarkable advantages of having a business in a local community are mentioned below.
- Local employment.
- Local income sources.
- Local tax income.
- Access to local services.
- Community-focused political advantages.
- Capturing the local market.
There are multiple other types of considerable advantages as well.
iv) Why it is Important for a Business to Involve in Communities?
Ans:- It is recommended for every business to be a part of communities. Involving in various communities creates access to multiple benefits. There are numerous ways a business can benefit from community involvement. We have mentioned a couple of common advantages that businesses get from communities.
- Increase brand awareness.
- Cultivate trust.
- Foster a positive culture.
- Access to community events.
- Experiencing the perks of the community.
- Networking with influential people and businesses.
All of these positive factors will definitely increase the sales and revenue of a business.
v) What are The Four ways That Business can Benefit Society?
Ans:- Any successful business can provide value to society in numerous ways. It is about finding out the needs and matching them up with the business. A business can benefit a business in the following ways:
- Offering valuable goods and services.
- Providing employment.
- Paying all the taxes.
- Contributing to national growth and welfare programs.
- By providing stability in various ways.
- By providing security to the citizens.
Conclusion
So to wrap up the whole subject, first let’s recall whatever we have discussed till now. We have discussed:
- Roles of small businesses in the rural parts of India.
- Some profitable businesses in the rural parts of India.
- Common characteristics of small businesses.
By knowing the roles of the small businesses you could understand the important contributions of businesses in the rural parts of India. So now you can aim to make those positive contributions through your business.
We have shared some profitable business ideas, which will help you to choose a business according to your preferences.
You also got to know some common characteristics of small businesses. So while running a business you can try to adapt such traits.
