Generally, a small business is one that is independently owned and operated and not dominant in its field of operation. Criteria such as sales volume and the number of employees in the firm are also used in assessing the size of businesses Small business owners are not dominant in their field, and usually do not engage in many new or innovative practices. They may never grow large, and the owner may prefer a more stable and less aggressive approach to running the business. Since small firms include those purchased as ongoing business as well as franchises, small business owners can be viewed as managers of small businesses. As we know, that economic development of a nation is firmly associated with the growth of the industrial sector. Industrial sector is poised of Large, Medium and Micro enterprises. Although, large industries assist the overall economic growth of a nation, the contribution of Micro or Small and Medium enterprises (MSME’s) is quite compelling in industrial production, employment generation, import and exports.
The research team hypothesizes that innovation in marketing practices plays a large role in explaining why some micro-entrepreneurs manage to achieve scale while other micro firms cannot escape the subsistence trap. Further, they argue that entrepreneurs’ ability to innovate is a function of both their human capital and the initial product variety that they offer. Finally, they claim that human capital –in the context of subsistence level micro-entrepreneurs, who typically have poor numerical skills and high levels of illiteracy— can be improved through the imitation of simple rules of thumb from more successful peers or “positive deviants”.But to maximize the growth of the economy, every working force in the country must be skilled and employed.