Small Business Enterprise
ACKNOWLEDGEMENT First of all I want to thank the Almighty Allah for giving me life and strength to finish this assignment on time. I want to thank my family for supporting me through this major task and providing me with all the resources needed. I love you guys. I want to especially thank my friends who have one way or the other helped me in completing this assignment. Thanks to my fellow colleague Seedy Mohamed Ceesay for your constant help and encouragement. Finally I owe a big thank you to my lecturer Mr Amara. Keep up the good job of trying to make us understand. INTRODUCTION
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. The legal definition of “small” varies by country and by industry, ranging from fewer than 15 employees under the Australian Fair Work Act 2009, 50 employees in the European Union, and fewer than 500 employees to qualify for many U. S. Small Business Administration programs. Small businesses can also be classified according to other methods such as sales, assets, or net profits.
Small Business Enterprise Essay Example
Small businesses are common in many countries, depending on the economic system in operation. Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing, and online business, such as web design and programming, etc. Why do people start a small business? Some want to spend more time with family, and starting a business allows them to do that. Some find it exhausting to be outside the house all day, dealing with traffic, co-workers, meetings and interruptions.
Some people hate answering to a boss all the time- needing permission to schedule a dentist appointment or take the day off when they’re sick. Some people are unmotivated by the security of a regular pay check and prefer the challenge of the direct rewards or losses that entrepreneurs see from their efforts. Maybe you want to build an empire and become famous, or create a wealth-generation machine that you can pass on to your children. Or perhaps you can’t convince anyone to recognize your unique vision and you’ve decided that it will never come to fruition unless you strike out on your own.
Or maybe you’re thinking of self-employment because you’ve been unemployed for so long that you feel that you’ve exhausted all the other options. Becoming a small business owner has unique challenges and rewards that aren’t right for everyone. You must be driven, disciplined and able to identify a product or service that people need – one that they will pay enough for to allow you to live comfortably. You have to develop marketing skills and be able to find your own work, because it won’t fall into your lap until after you’re well established. Business owners need to understand how to budget, keep records and handle small business taxes.
They must familiarize themselves with employment laws if they want to hire staff. They also need a plan for protecting their business and everything that’s tied to it if something goes wrong. TASK ONE Using an organisation of your choice, explain the following: Describe the profile of a selected small business Haaba’s beauty saloon Haaba’s beauty Salon has been serving the Gambian for over 3 years. The owner, Haaba, has 3 years experience as a haircutter and as a professional stylist for weddings, proms, and special occasions. The salon has a full-service staff with very little experience in hair and nail care.
Haaba’s Salon goals are to create a friendly, relaxed, warm, and comfortable place for men and women, children, and families. She also enjoys providing salon services for people to enjoy having their hair and nails done. The salon’s interior provides a natural environment filled with beautiful greenery, soothing stereo music, and cable TV to make the entire family feel comfortable. Haaba is always there to finish up client’s hair so as to give them the best looks. The salon services offered are haircuts, highlight colouring, perms, updos, bridal, homecoming, special occasion styles and nail care.
Make an appointment today and experience the friendly, warm, and comfortable service you deserve. Review and analyse the performance of a business Performance measurement could be seen in two ways mainly, * Organisational performance measurement * Individual/work-force measurement ORGANISATIONAL PERFORMANCE MEASUREMENT Under the section, performances are measured under the following characteristics or element: * Level of output- is it below expectations or above expectation? Is there any deviation between planned results or actual results? * The profitability of the organisation. The level of market share. * The sales return and return on capital. * Durability in terms of time, frame and business existence. INDIVIDUAL/WORK-FORCE MEASUREMENT Here, performance is measured by taking into accounts the following elements: * The level of overtime spent by the individual beyond the normal time. * How efficient and effective is the work force or individual efficiency and effectiveness takes into account performing a task within a shorter period, competency reduction in errors and mistakes * The output and the time frame required. The level of punctuality and commitment of the work force towards meeting objectives and goals. * The meeting of a bench-mark or a yardstick set by the organisation or management. Identify the strengths and weaknesses of the business Small Enterprise Strengths Personal Touch Customers will often pay a premium for personalized attention. In many companies where products and prices differences are minimal, the human factor emerges as a prime competitive advantage. Greater Motivation Key management of small enterprise normally consists of the owner(s). They ork harder, longer and with more personal involvement. Profits and losses have more meaning to them than salaries and bonuses have to the employees of a multinational company. Greater Flexibility A small enterprise has the prime advantage of flexibility. Big company cannot stop operation without opposition from organized labor, or even increase price of their products without possible intervention from government. Small enterprises have shorter lines of communication. Their product lines are narrow, their market limited and their factories and warehouses are close by.
They can quickly spot trouble or opportunity and take appropriate action. Less bureaucracy In small business the whole problem can be understood readily, decision can be taken quickly and the results checked easily. But in a multinational company, bogus management structure can lead to delay in taken action and bureaucratic influences. – Unobtrusive (Less Conspicuous) Small company can try new sales tactics or introduce new products without attracting undue attention or opposition. This is possible because it is not quite as noticeable as multinational company.
Large company is constantly faced with proxy battles, antitrust actions and government regulations. It is also inflexible and hard to change or restructure. Weaknesses of small business enterprise Location The location of my shop is very bad. During the rainy season, there are massive pools of water and cars rarely want to come around that area, therefore, I hardly have any clients during that period. Attitude The attitude of my staff towards a client is excellent but they hardly come to work. If they ever show up, it’s never on time.
I have to always call them and wake them up before they come to work and the absenteeism is very rampant. It is always one excuse or the other. Management style The management style I use in my salon is laissez faire. I offer no or very little guidance to my staff, amidst leaving them to make decisions on their own. As much as it could be overtly effective in those situations where most employees or members happen to be highly qualified and skilful in their area of experience, it has often led to poor roles definition plus a sheer lack in motivation.
Quality of products I use very poor quality products in my saloon. I buy the cheap things so as to get more profit at the end of the day. The shampoo and hair lotions I use have very poor quality thereby destroying my clients hair. This therefore discourages them to come back to my saloon. External Opportunities and Threats Situational analyses consider opportunities and threats from the external environment. External opportunities include things such as gaps in the market that no company is currently serving, new markets and other clear growth opportunities.
External threats include new product releases from competitors and new competitors arising in the market. A range of external factors can present either opportunities or threats, depending on the specifics. Changes in the law, for example, can provide distinct opportunities to some businesses in an industry while threatening the survival of others. Changing consumer preferences and market-changing new product categories, as another example, can give new entrepreneurs a world of opportunities while seriously threatening established brands. RECOMMENDATIONS TO OVERCOME WEAKNESSES Lack of experience.
Not everyone is cut out to be an entrepreneur. Analyze the strength and weaknesses of starting your own business. It is important for business owners to be self-starters who are good at planning, organizing, and making decisions that can benefit their business in the long-term. It is also important to choose the right business for you; which may not be the most profitable, but the one in which you have the most interest and skill sets. Network with other more experienced business owners online and in your community to obtain feedback on how you can start and maintain a successful enterprise.
Poor business location. Knowing your target consumers will help you identify where to best market your products and services. Insufficient capital. Many entrepreneurs are not aware exactly how much they need for start-up capital— and how long it will take before their business turns a steady profit. Do your research and plan ahead to identify areas where your business may fall short. Investigate possible funding sources, such as venture capitalists. Poor credit arrangements. A comprehensive business plan will help eliminate poor credit arrangements. Poor inventory management.
Keep updated and accurate inventory records to avoid future problems. Unexpected growth. Although it is often hard to predict the future economy, come up with a plan for what to do in both positive and negative situations. Consider consulting companies that specialize in helping businesses deal with situations involving unexpected growth. Bench marking: If one person lags behind, the organization can’t move forward as a unit. It is difficult to evaluate an employee’s performance if you don’t know what standards you should use. Benchmarks are standards for employee work that the company requires.
The employee’s ability to meet those benchmarks should be the foundation of the performance evaluation. Set benchmarks in several areas and communicate your expectations for meeting standards to employees. Benchmarks for Productivity Employees should know exactly how much work they are expected to do in a work day. The optimum situation is when this productivity can be measured, such as in producing a number of units. Even non-manufacturing productivity can be measured, however, in terms of sales, publicity articles written, contacts initiated, successful negotiations and so forth.
Set specific benchmarks in any area of productivity in which you want to measure an employee’s effectiveness. Benchmarks for Quality Quality of work must be a part of a performance appraisal. Establish levels of expertise you expect, and use those as benchmarks. You can measure error rate in products produced, customer satisfaction and effectiveness of projects against a standard you establish. This can be stated as a percentage. Example: Employee meets quality standards 85 percent of the time. Benchmarks for Living Up to Company Values
Each company should have a mission statement and a set of values by which it operates. Your performance appraisal can assess how often and how well an employee lives up to those values. Set a benchmark that demands compliance in the neighborhood of 90 percent of the time, and see how your employees are aligned with company values. Benchmarks for Product or Service Effectiveness If your product or service does not live up to certain standards, you will soon be out of business. This is at least partially the responsibility of employees.
Evaluate employees against a product or service effectiveness by making them responsible for improvements. You can set benchmarks for making improvements, such as: Employee contributes quality improvement suggestions frequently. The word “frequently” would be your benchmark in this case, and though it is somewhat subjective, at least it gives you a starting point for evaluations. Definition of job procedures: Established work procedures have proven to be beneficial in many ways. They play an integral role in performing jobs safely, providing standardized training and being assistive with investigations.
Job procedures are defined as a step-by-step description of how to proceed, from start to finish, in performing a task properly. Where confusion seems to run rampant is in determining whether a job requires an actual job procedure or should be considered a “task” which is a segment of work which requires a set of specific and distinct actions for its completion or if it should be a “practice” which is a set of guidelines helpful for a specific type of work that may not always be done in the same way. Planning
Planning is an essential business function that requires a dedicated effort from the company’s management team in order to fully realize the benefits. Companies often have an annual planning process whereby the strategies and budget for the upcoming year are determined, but, ideally, planning should be a part of everyday management thinking. It is a mindset of continually looking for ways to make the enterprise more competitive. During the planning process, goals are set for both the short and long term.
Once goals are set, strategies are determined to reach the goals. Information is the raw material that fuels the planning process. Management must gather detailed information about the strengths and weaknesses of competitors in order to come up with strategies that create a competitive advantage for the company. Market research is also key; understanding your customers will allow you to better attract and serve them. Consumers’ needs change, their tastes change, and what they are willing to pay for products or services changes depending on the economic environment.
Planning requires vision, or the ability to see success for your company before it occurs. Knowing where you want the company to be in three to five years and what you want to achieve during that time is an essential ingredient of successful planning. Companies must allocate their resources to what they determine are their best opportunities, and should be constantly seeking out new opportunities. A company’s best opportunities result from a combination of its capabilities, or what it does particularly well in comparison to its competitors, and what the most critical customer needs are.
The business owner must anticipate this and bring in additional talent as well as build the skills of the existing team members through additional training and education SOURCES AND AVAILABILTY OF PROFESSIONAL ADVICE A management of an organisation might not be in a better position to solve or overcome the fundamental weaknesses of business performance. Therefore, shareholders and management may prefer to call on external parties based on area of specialty. Whatever concrete advices are given and implemented within the organization.
External sources of professional advices usually come from: Financial consultant: provision of salient advices on financial statement, cash-flow statement, trading profit and loss account. Management consultant-provision of advices on management structure, planning and coordinating of activities, task allocation and definition of jobs, human resources planning, which would be based on division of labour and specialization. Legal consultant-every organization has a legal practitioner that handles legal matters of the organization.
The practitioner advices on appointment of staff, legal relationship between the government and the organization, between management and staff and between business and business. It is the responsibility of management to improve on its existing financial records. Keeping track records on debt collection, payroll system, and financial auditing and balance sheet statement will definitely improve on existing weaknesses of the organization. Failure to abide to this financial discipline will definitely create bankruptcy and liquidation of the organization.
Failure to abide to this financial discipline will definitely create bankruptcy and liquidation. USING THE SAME ORGANISATION, SUGGEST NEW ARES OF EXPANSION: AND INVESTIGATE WAYS OF STRENGTHENING EXISTING PERFORMANCE. Finding new customers is the major challenge for Small business owners. Small businesses typically find themselves strapped for time but in order to create a continual stream of new business, they must work on marketing their business every day.
Common marketing techniques for small business include networking, word of mouth, customer referrals, yellow pages directories, television, radio, outdoor (roadside billboards), print, email marketing, and internet. Electronic media like TV can be quite expensive and is normally intended to create awareness of a product or service. * 2. 2) investigate ways in which existing performance could be maintained and strengthened As there are lot of small businesses across the globe, it is necessary to maintain sustainability and survival.
The act of maintaining and strengthening existing business by management and show proprietorship is quite difficult and complex. But nevertheless, it is a responsibility bestowed on owners to maintain and strengthen their projects or organisations. These factors or elements are characterized with the maintenance and strengthening of existing business: MARKET SHARE/POSITIONING: market share is the number of customer’s portfolio attached to that business, and it is always determined in percentage. A given percentage must be maintained as a market share in order for sustainability and growth.
BUSINESS PENETRATION: the strengthening of a business requires constant and persistent market penetration in all corners of the segmented markets by reducing the price for products and maintaining quality product and delivery. CUSTOMER RELATIONSHIP: existing business must establish cordial and friendly relationship between the organisation and its customers, regardless of whether the customer is an existing or potential one. MAINTAINING APPROPRAITE PERFORMANCE RECORD: the management must closely monitor the performance of the workforce.
The performance record takes into account absenteeism, high labour turnover, punctuality, productivity and efficiency, etc ADVISORY RELATIONSHIP: businesses must receive advices from experts in all corners in order to protect the business. Some of the fundamental advisors come from legal practitioners, financial consultants, management and market consultants. PRODUCT QUALITY AND DELIVERY: the research and development should constantly work to maintain and provide quality product and services, plus quick delivery and accessibility by customers.
How do I Structure a Performance Review? The performance review is written to meet several goals. Those goals include judging the viability of your employee’s performance, benchmarking that performance and developing a career path for your employee. While the information within the review will vary by employee, the structure of each performance review should be quite similar. General Performance The employee’s general performance includes basic workplace responsibilities, such as attendance, punctuality and policy adherence.
General performance also incorporates the “soft” responsibilities, including attitude, cooperativeness, approachability and the employee’s overall ability to take clear direction. Although these aspects are not immediate aspects of the employee’s specific job responsibilities, these aspects can greatly affect the overall success or failure of the employee’s job success. Therefore, it is important that you not only address these aspects, but provide supporting examples, such as an attendance record, customer compliment or customer complaint.
Specific Job Responsibilities The specific job responsibilities are the immediate items in which the employee is responsible for completing every day and without fail. Depending on the position, these responsibilities may include customer service, sales, inventory and even resolutions. These are the responsibilities that directly affect the business when they are not completed. Your review of these specifics should include a close analysis of your employee’s productivity and success within the position. Like the general performance section, you hould support your findings and comments with supporting information. This will make the information and findings easier for the employee to understand during your performance review discussion. Year-to-Year Comparison If you are evaluating a tenured employee, your performance review should include a section that provides a year-to-year or evaluation-to-evaluation comparison. The comparison should review the continued progress, as well as the areas that need improvement. This evaluation comparison will also begin to show a pattern of expectancy from your employee.
In the event of a poor evaluation, a comparison of evaluations will help you to identify if your employee is just having a subpar year, struggling in a certain area or simply needing a change from the position. Comparisons also help to identify employees that have grown through their position with hopes of advancement or promotion. Goal Settings Goal setting is an essential force in the performance review. The goals that are set within the performance review are based on the findings of the aforementioned sections. This individualized section will provide the employee with steps toward improving their position and success within the company.
The goals should include items such as improved attendance, refined metrics adherence and improved accuracy. The goals should be clearly stated and within the employee’s reach. Considerations It is important that you provide an unbiased review of the employee. The performance review should be based on facts that are supported with evidence that has been collected throughout the year. Avoid using rumors, innuendos and guesswork when completing the performance review. It is also advised that you complete the review when you are clear-headed, well-rested and without anger to ensure that you providing a fair review. 2. 3) SUGGEST NEW AREAS IN WHICH THE BUSINESS COULD BE MAINTAINED AND STRENGTHENED JUSTIFYING SUGGESTIONS. New opportunities are benefited and competitive merits opened to existing businesses. Whether small or large, business faces opportunities during their stay in operation or business activities. Some of the new opportunities available to existing businesses are as follows: IDENTIFICATION OF AREA OF EXPANSION: it is the responsibility of marketers to expand their marketing activities to areas outside central marketing, but rather to evaluate and target market that falls outside their geographical locations.
This simply means that targeting locations is instrumental to market shares, customer portfolio and profitability. EXPORT MARKETING: Local marketing does not require the expected growth and profit organisation and marketers need to venture into export market known an international trade. Export trade increase profitability and growth, but fall due to some obstacles ranging from room language barrier, conversion of currency, government regulation, climatic condition and culture of the people. MARKET DEVELOPEMENT: according to Ansoff, one new opportunities of business is through market development.
It is a process that marketers and organisations undertake by not only looking at contemporary market (existing) but rather to look at new methods through market development that targets new customers, new locations, new perceptions and culture and above all product appreciations. RESEARCH TECHNIQUES: In the modern competitive environment, research techniques and development play a crucial role in creating opportunities for business. These require techniques based on quantitative and qualitative. Qualitative techniques deal with sound opinions, views, and perceptions of people both within and outside the organisation.
On the contrary, qualitative techniques evaluate issues or provide information to organisation in the form of percentage, comparing performances, assessing actual and planned objectives or results. At the end, critical analysis is made and sound decisions taken on a particular problem. RE-BRANDING: this has been an opportunity for organisation and marketers. When the product is rebranded, it becomes appealing to new customers. It also creates market penetration by taking a rebranding product to the same contemporary market.
This adds value to the organisation in terms of customer confidence, customer retention and company’s image and reputation is bestowed. IDENTIFY BUSINESS OBJECTIVES AND PLANS, AND PREPARE ACTION PLANS TO THE CURRENT IMPLEMEMTATION (BASED ON THE SITUATION AN SOCIETY) * 3. 1) REVIEW EXISTING BUSINESS OJECTIVES AND PLANS An important part of your business plan is to state what your goals as a company are. If you are a startup, then you’ll want to project out for several years. For instance you would state your current position and where you plan to be in six months, one year, and so on.
You’d list your product or services and explain your growth plans for the listed periods. If you’re an existing business, you would show your current position, and then do the same type of projections. A business plan is not a one-time document, at least it shouldn’t be. Most businesses put together a business plan during their start-up phase to organize, attract partners and employees, and to try and get a loan or financial investment. This is a great use of a business plan, however far too often once the company has started up the plan isn’t touched again.
Ultimately, a business plan is about results, about making your business better. If you don’t think doing a business plan will improve your business, then don’t do one. Planning for planning’s sake is a waste of time. Where a plan is most likely to make your business better is by allowing you to: 1. Set priorities properly. 2. Track plan vs. actual results and make course corrections. 3. Plan and manage the critical numbers that aren’t intuitive: not just profit and loss, but the relationship to cash flow, balance sheet, and ratios. 4. Communicate your plan to others: partners, employees, lenders, and investors.
You may have a great plan in your head, but as soon as you need to explain it to others, you need to write it down. Reviewing Your Plan So how do you maintain your business plan? We have to first establish that without regular review — monthly or at least quarterly review of your planned vs. actual results, with practical analysis of the reasons for variance — planning is likely to be a waste of time. Real planning requires regular reviews just as much as navigation requires knowing where you are as well as where you were and where you wanted to go.
Every real plan needs to be full of specific dates, budgets, forecasts, and management responsibilities. People involved have to know there will be tracking and following up on specifics. Then that plan must be reviewed against results, and those reviews should produce course corrections and fine tuning. Generally a business hopes for a consistent long-term strategy built on short-step incremental changes, not major revisions. Consistency is important to strategy, and the business should avoid the temptation to jump around from one strategy to another so quickly that no strategy is ever really implemented.
Remember that even a mediocre strategy well and consistently implemented is much better than a brilliant strategy that wasn’t implemented. However, businesses do come to crossroads demanding major revisions in their business plan. These are some signs that indicate its time to review your plan: Major changes in market situation. Look especially for changing market factors and changing market behavior. * Have your underlying business assumptions changed? As an example, the Internet has changed the business landscape so enormously that in some industries almost any plan that was developed without a view of the Internet may need revisions.
That may not be true for a landscape architect or restaurant, but for a travel agent, graphic artist, or market researcher it’s obvious. * Do you have new competition? Have new competitors emerged, or existing competitors changed the business landscape so much that you need to review and revise? * Has the product or service picture changed? For example a new technology may have emerged, changing the market perception of what you sell. There may be new products or services offering related solutions to the same user needs you satisfy. Major changes in internal situation.
The most obvious major changes are changes in ownership, which are frequently the result of changing partnerships, divorces, deaths, and investment. The company takes on new partners, or sells out to a larger company. On a more ominous note, the company suffers significant declines in sales, profits, and financial health. Always keep the revision in perspective. While you do want to review and correct constantly, you don’t want to change a strategy unless you are sure it isn’t working or you see real changes in the underlying assumptions that formed the foundations of strategy.
Maintaining Your Plan The purpose of maintaining your plan is to use business results to guide your future decisions. The plan itself has no value if it doesn’t help you improve business. That’s regardless of how good or bad, how brilliant the ideas, writing, or how elaborate the tables and charts. Its value is the decisions it leads to. That means, of course, that to make a plan worth the effort of developing it, you’ll want to follow it up. Whether that’s every month or every quarter, you need to track results, analyze the difference between plan and actual results, and manage.
Change things that need to be changed. Compare what you planned to what happened in reality. Ask yourself the following questions: * What went wrong, and how can we fix it? * What went right, and how can we take advantage of it? * What changes took place in the competitive landscape that could be updated in the plan? * What changes took place affecting our market that could be updated in the plan? * What changes took place internally in our organization that could be updated in the plan?
After you’ve answered these questions, update your plan accordingly, set new budgets and milestones, adjust your financials, and repeat the process with another review of your plan again next month or next quarter. Update your plan accordingly again, and keep repeating. You’ll find that maintaining your business plan gives you a better grasp on your business, your market, and everything else that happens with your company. Conclusion Starting a small business is complex, time-consuming and life-altering. There are many more things that go into running it than just providing the product(s) or service(s) that your business offers, however.
You’ll also be responsible for your business’s finances, protecting your business and personal assets, keeping your business legal, paying taxes, keeping records, managing employees and more. If you understand what you’re doing and know how to minimize the risks and challenges, the independence, personal satisfaction and financial rewards you can achieve as an entrepreneur can make starting a small business the best decision you’ll ever make. (Make your dream a reality. Find out what you can do to reach this financial goal