SMALL BUSINESS ENTERPRISE
UNIT 33
LECTURER: WALTER-J DAVIS
WEEK 1
OBECTIVES OF A BUSINESS
Make Profit
Create a Success Brand
Create Employment
Be Market Driven
Contribute to GDP
Create Wealth
Be Socially Responsible
Practice Good Human Resource Management
See Additional Reading http://www.entrepreneur.com/article/38292-1
FACTORS THAT AFFECT BUSINESS PERFORMANCE
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Government Policy and Legislative Framework
Location of Business and its Units
Cash Flow
Lack of Appropriate Competency
Changes in Business Operating Environment(Social,
Legal, Techological)
• Changes in Physical Environment
• Improper Management Techniques
• Lack of Effective Communication
KEY PERFORMACE INDICATORS (KPI’s)
• Key Performance Indicators are quantifiable measurements,
agreed to beforehand, that reflect the critical success factors
of an organization. They will differ depending on the
organization.
Is the Business Plan on track
Are Revenues on Target for the period?
Did the business grow and if so by what
percentage over what time?
How many persons did the business employ over
the period?
Did you make any additional investments into the
business during the period
See Additional Reading:
http://www.klipfolio.com/resources/kpiexamples-top-sales-metrics
Constraints on Small Business
A constraint: is a factor that limits or holds back the possible success of a plan.
The Business Plan needs to be realistic, so it is important to set out in detail the
constraints that are likely to act as limits on business activity.
Typical constraints facing the business include:
1.The size of the market. The extent of the market determines a businesses ability
to make sales. You can't make sales if there are no customers out there.
2.The nature of demand in the market. It is important to identify the nature of
your customers and their requirements through detailed market research.
3.The availability of supply. A business often depends on supplies. For example, a
clothes retailing business needs to acquire garments, in the appropriate
quantities, prices and at the right times.
4. The nature of the competition. The strength of the competition is a key constraint
on business success. Businesses need to position themselves in such a way as to limit
the effect of the competition.
5.The availability of finance. Businesses need to have the right quantities of finance at
the right times to match their needs. Liquidity and cash flow are thus very important.
It is necessary to have funds when they are required to meet the pressing needs of the
business.
6.The quality and skills of employees. The human resource is one of the most
important resources of any organization. It is essential to have the right number of
people with the appropriate skills to enable the business to achieve its business
objectives.
7. The quality of direction and management. Directors and managers of a business
need to have the right skills and abilities e.g. to create well structured plans, and to
motivate and lead other members of the organization. In creating a business plan you
therefore need to identify the key constraints, and to set out plans for dealing with
any pressing constraints.
Restrictions on Small Business
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Economical
Supply Chain
Lack of Funding Sources (Grant or Loan)
Governmental Aid or Assistance (Waivers or Incentives)
Access to new Markets (Domestic or International)
• See Additional Reading links below
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http://www.cbr.cam.ac.uk/pdf/wp107.pdf
http://www.boxtheorygold.com/blog/bid/59599/The-Theory-of-Constraints-for-Small-Business-Eliminate-Bottlenecks
Responsibilities and Liabilities of
Owner-Manager
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Monitor and Evaluate KPI’s
Employ the “Visionary” techniques for Growth
Conduct the necessary financial planning mechanisms for streaming profits
Ensure Customer Service Delivery is superb and constant
Monitor Human Resources and their contribution to the business
objectives
• Oversee the General Management
• Mitigate Business Framework against Competition
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Additional Reading
http://smallbusiness.chron.com/five-duties-small-business-owner-13882.html
http://www.bizfilings.com/toolkit/sbg/startup/entrepeneurship/understanding-requirements-of-business-ownership.aspx