Small enterprises can be classified into two categories, such as traditional small industries, which includes khadi and handloom, village industries handicrafts, sericulture, coir etc. Another is small industries, which includes small scale industries and power looms. Modern small scale industries produce wide range of goods from comparatively simple items to sophisticated products such as televisions sets, electronics control system, verious engineering products, particularly as ancillaries to the large industries. The traditional small industries are highly labour intensive, while the modern small scale units make use of highly sophisticated machinery and equipment. On the other hand from the amount of capital investment point of view the small business units can be classified into different categories.
Such as :
1. Small scale industry (5 crores in plant and machinery).
2. Tiny industrial units (Not more than Rs. 25 lakhs in plant and machinery).
3. Small scale service and business enterprise (Not more than 10 lakhs in plant and machinery).
4. Micro business enterprise (Within the tiny and small business sector / micro enterprise are those whose investment in plant and machinery does not exceed rupees 1 lakh. So micro enterprise is one kind of tiny and small business units. In a simple language micro enterprise is a small scale industries, which are characterised by compact size, personal character of management based on individual talent, leadership and organising ability asn well as by comparatively simple technology limited coverage of market and comparatively lesser input of capital. Below discuss small and medium enterprise and virtual and learning organisation).