so its a small chip as in plastic is missing or a deep scratch?
The picture you took is of pretty low quality and you have the cleanser all over the damaged area.
if its a real chip, then your disc is pretty much done, if its a deep scratch, then your disc may be done.
But you can try several things to fix it since if it doesn't work, the disc is already damaged anyway.
1) you can buy some disc repair and cleaner kit.
The one I have comes with two bottles, a brownish creme that fills in the scratch, and a a clear spray, that cleans the disc.
I've used it on many disc and I have a pretty good result for most of them. cost about $10 & Ive used it dozens and dozens of disc.
2) My friend has successfully repaired badly scratched music CD's using toothpaste to fill the gaps and then water to clean off the surface. I haven't tried it myself, but if you don't want to spend any money, that might be what you want to try. Don't use toothpaste that has extra stuff in it like beads or whitening strips. just plain old toothpaste.