Cottage industries, Small Businesses, and Linkage industries

Cottage Industries

Where production happens at home, using natural resources and little to no equipment.

Characteristics of Cottage Industries

• Labour often involves family members

• Local materials are used,

• generally small-scale with growth potential.

Advantages of Cottage Industries

• Provides employment

• low labour costs

• linkage to other industries

• minimal location costs.

Disadvantages of Cottage Industries

• Lack of a ready market

• scarcity of raw materials

• Long hours are required from owners.

Small Business

A privately owned entity that generates less annual profit compared to larger corporations.

Characteristics of Small Businesses

• Have their own location

• employ a maximum of 10 paid employees

• have fewer assets than large corporations.

Functions of Small Businesses

• Create employment

• provide services that large corporations cannot

• cater to niche markets.

Niche Market

A market offering a particular good or service to a specific group of people.

Challenges for Small Businesses

• Face competition from larger companies

• finding capital

• Unlimited liability.

Linkage Industries

When one industry depends on another's output for its own production.

Backwards Linkage

Occurs when one industry relies on another's output for raw materials.

Forward Linkage

When the output of one industry is used as input for another industry.

Benefits of Linkage Industries

• Encourages large-scale production,

• Generates foreign exchange and promotes economic growth.

• Creates job opportunities.

Challenges of Industry Linkages

• Need for significant capital investment

• Limited access to foreign markets.