ABSTRACT The purpose of the study was to examine the nature of small scale businesses that provide employment to the labour force in Narnayingo Sub-County, Narnayingo District. The objectives of the study were the to identify the different activities of the Small and Medium Sized Enterprises (SME5) in which the labor force is employed. The second objective was to identify how the SSBs contribute to development and growth of developing economic. Last objective was to identify the size of businesses that provides employment to the labor force: The study used a case study design to conduct the study in Namayingo Sub-County. Simple random sampling technique was used to select 240 respondents from 25 business settings into the study. Findings revealed that majority of the different classifications and activities of the businesses were tied shop businesses that operated at a small scale, were managed by own boss and support staffs, had their source of startup capital from own savings, and do not provide opportunities to a great number of the people since they mostly employ less than 5 people compared to the labor force available. Most business owners had challenges that hindered their business operations, taxes and other regulations. Problems in the context acquisition of licenses for registration, duplication of products have been attributed to competition. This has culminated into the widening of markets, emphasizing of the Traditional Guarantee Associations as KACITA, PSF, 360 Network and USSIA so as to focus on the issues that hinder trade and business operations. Lastly, small scale business mostly improve incomes and welfare of individuals, from their businesses knowledge or skills and business partners, competition for jobs associated with social responsibilities encouraged most business people to start businesses, the kind of activities engaged in by the businesses have enabled them to absorb labor force through the provision of employment opportunities.