Following are the problem being faced by small scale industries
(i) Small scale industries do not get raw materials of good quality at reasonable price because their bargaining power is relatively low.
(ii) Small business enterprises are generally formed as sole proprietary concerns. Hence, their capacity to raise finance is limited they do not get cheaper credit facile from the banks and financial institutions. They depend upon their personal sources or private money lenders who charge excessive rate of interest.
(iii) The owners of small business do not possess managerial skills that are required to run the business.
(iv) The technique of production used by small scale enterprises is outdated which results in higher unit cost of production and lower quality.