Problems faced by Cottage Industries
- Lack of access to capital is one of the main issues facing small industries. The majority of these enterprises are small-scale operations that lack adequate collateral to secure bank or other financial institution loans. Due to this, it is difficult for them to retain or even expand their current business, let alone invest in new machinery.
- The lack of infrastructure and modern technology is another important problem. Traditional production techniques are frequently used in cottage enterprises, which can be labour- and time-intensive. Their small stature and scarce resources make it difficult for them to obtain contemporary tools, equipment, and technology.
- Moreover, cottage industries struggle to compete with larger enterprises that benefit from economies of scale. These larger businesses can produce goods at lower costs, making it difficult for cottage industries to price their products competitively.
- Finally, cottage industries face challenges in marketing and distribution. Due to their small size, they often lack the resources to reach a broader customer base or invest in advertising and promotions. This makes it difficult for them to establish a strong brand image and expand their business.
Cottage Industries
Small-scale businesses known as cottage industries are often operated from homes or tiny workshops. These sectors employ manual labour and inexpensive instruments, and they have modest capital investment requirements.