The problems faced by small scale business are as follows:
1. Quality : The weakest point of small scale units is maintaining the quality. These business firms have neither adequate resources to invest in quality research nor the expertise to upgrade technology for improving the quality of their products.
2. Technology.: The technology used by these firms is usually outdated. As a result, the production is uneconomical and low.
3. Capacity utilisation : Many small business firms have to operate below full capacity due to lack of marketing skills or lack of demand. This increases their operating cost and may result in even closure of the business.