lack of Trained Personnel
There is lack of small entrepreneurs who possess both the motivation and the competence to make a project viable and successful. Small scale firms find to difficult to recruit, retain and motivate skilled managerial and technical personnel as they look for better opportunities in the large scale industries. Therefore, they get the second rate talent or have to depend on family members who don not have diversified skills.
small scale firms also face competition from large scale sector. They have to suffer when there is a recession the organized sector which buys their products. In fact, small scale industries face problems at every stage of their operations whether it is buying of raw materials, manufacture of products, marketing of goods or rising of finance. These industries are not in a position to secure the internal and external economies of scale.