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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.