Small Business

Introduction of Small Businesses

Small business  refers to an independently owned or an operated company that is limited in size and in revenue depending on the industry.

This means that in the line of work, when you are in charge of a business which has few employees and your income generated from sales is below the standard, then the business is a small business.

Small business Association (SBA) defines small business as one which is independently owned and operated for profit. It is not dominant in its field.{America}

The National board for Small Scale Industries (NBSSI) is as an organization that has been established by the government of Ghana (Act 434). They are in charge of helping in the growth and regulation of small businesses

They consider small business as those which has 29 or less employees. Also, enterprises whose investments do not exceed a cedi equivalent to 100,000 USD are considered as small businesses.

If they inspect your business and your capital falls below the said amount, then you are still considered a small business owner despite the fact that you could have 30 employees.

ESSENTIALS CHARACTERISTICS OF SMALL BUSINESS

Efficiency:

Being efficient means: achieving maximum productivity with minimum wasted effort or expense. 

For most of us procrastination, fear and laziness prevents us from truly placing ourselves in the position of welcoming the opportunity for success.

Clearly for us to become great entrepreneurs efficiency must be the main ingredient in our strategic plan. Entrepreneur Efficiency – Entrepreneurial Ambitions.

entrepreneurialambitions.com/entrepreneur-efficiency/

Methods of operation:  

Operations is the work of managing the inner workings of your business so it runs as efficiently as possible. Whether you make products, sell products, or provide services, every small business owner has to oversee the design and management of behind-the-scenes work. This would refers to how you as a small business owner would like operate your business.

The nature of the market they serve

Describing the nature of the business, the sales, the marketing strategy, and the business concept helps the business, its product and the market  it serves . Also, It’s one of the most difficult decision to make for most small business owners.

The type of resourceful employee:

Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go.

With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking. The generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. 

https://www.entrepreneur.com/article/27217

Number of employees

This refers to the number of people you hire to work for you which would be less compared to the other forms of business

Ownership

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,
cooperatives, partnerships, or sole proprietorships.

Capital is required:
The capital requirement is the sum of funds that your company needs to achieve its goals.
The capital requirements should be calculated as accurately as possible. If you plan too conservatively, you may not be able to compensate for unforeseen financial problems.

Examples

A local bakery that is owned by a married couple who employ 10 workers is an example of a small business

A manufacturing facility that employs less than 150 people is an example of a small business.

NB: There are small businesses withing the manufacturing sector and based on its nature, there are small businesses within.

As part of the characteristics , small business poses the following characteristics

• It is privately owned:
• Few or no layer of management
• Insufficient resources to dominate its field of operation

Small Business Category

The European Union community as of (1995) introduced the small and medium enterprise into these basing it on the number of employees in the business. This include the folowing

• Micro enterprise: Those who fall under these category have 0-49 employees.
• Small enterprise: Employ 50 to 99 people to work for them.
• Medium enterprise : They employ 100-149 people

The NBSSI categories small business into

• Micro enterprise: These people employ less than 6 people to work for them and they have a fixed assert not exceeding 25000 USD excluding lands and buildings.
• Small Enterprise: When you employ people between 6 and 29 or you have a fixed assert of exceeding 100,000 USD.
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FEATURES OF A SMALL BUSINESS

 The features of small business include the following:

Low in capital but high in labour intensity.

secondly, owners are part of the workers.

Thirdly, the area of operation in small.

Also, the size of the enterprise is small in relation to industry.

Furthermore, they often operate in an unstable market.

lastly, Manufacturing place is closer to the distribution center.

Advantages of small Business

• Personalized relationship with the customers and employees: Because its a small business, you virtually know all your customers and employees on a personal level. This Gradual conversations builds up the relationship with your customers who you keep because of the relationship you have with them.

• Flexibility in management: Unlike big business where decision must be taken at the board room, small business decision is simple and quick. This is because something can be changed quickly if need be. there is also more security because everything is under the control of the C.E.O.

• Simple records keeping: With a small business, you are able to keep records almost all the time about everything. e.g: we sold 4 products out of 10 therefore we have 6 in stock.

• Great opportunity to get rich: Through your stock options, you can sell some of your shares. When someone buys into your business, what the person bring on board will aid in expanding your business.

Disadvantages of Small Business.

firstly there is too much Cohesion

Secondly there is Bureaucracy

Also there is a risk of Failure

Again there is difficulty of raising capital

Furthermore, there is lack of opportunity for the employees

lastly, there is a limit in management skills.

why Do small Business Fail

There are a lot of reasons why small business fail and these can be found in the following:

first is the lack of experience

lack of capital

poor financial control

over investment in a fixed assert

management impotence

Government regulations.

If you have any questions you can ask in the comment section below.

Thank you.