Small Business Management

Small business: a small-scale, independent firm, which is usually managed, funded and operated by its owners, and whose staff size, financial resources and assets are comparatively limited in scale.

•          Usually only 1 or 2 owners

•          Financing provided by the owner

•          The business has limited market share

•          Often has a limited life span

•          Sometimes run on a part-time basis

•          There is a low level of net profit

•          Owners management discretion

•          Limited product or service offering

•          Is frequently a home-based business

•          Geographically limited

•          Often a family-based business

•          Only located in the private sector

•          Be less likely to access government assistance

•          Be less likely to export

•          Use less external financing

•          Be less likely to want to grow bigger

•          Be more likely to fail

•          Differences in managerial perspective

Small firms tend to:

•          Have more female owner/managers

•          Have managers with fewer qualifications

•          Have fewer unionised employees

•          Operate for fewer hours each week

•          Less likely to use formal management methods

q  Starting a new business

q  Purchasing an existing business

q  Entering a franchise system

q  Comparison of options

q  Procedural steps when starting a business venture.

•          Why is the business being sold?

•          Will existing staff remain if the business is sold?

•          What debts/liabilities exist?

•          Can all licenses and permits to operate be transferred?

•          How accurate are the financial accounts?

•          Is the business part of a Franchise?

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•          Is it novel?

•          Who owns the technology?

•          Is it patentable?

•          Does it work?

•          Is it better than rivals?

•          What are the applications?

•          Are there commercial advantages?

Business strategy and planning

Critical questions to ask in evaluation

1 Can the product / service  be patented or copyrighted?

2 Has a prototype been thoroughly tested?

3 Has it survived trade shows?

4 Is it easily understood?

5 What is the overall market? What are the market segments?

6 What has market research revealed?

7 What distribution and sales methods?

8 How will the product be made? cost?

9 Will it be developed and licensed or sold away?

10 Do you have the necessary skills?