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Why isn't everyone a business owner? Business management is more daunting a task than we may think. According to an SBA Study done in 2005, "About 1/3 of Small Businesses fail in the first 2 years, and just over half fail within 4 years." (as citied in Shawn, 2009). These statistics are depressing for people looking to start up a new venture. Richard (2000) claimed SMEs in successful business networks can generate up to 50% more in gross revenues than firms that work in solitude.(p.12). However, Richard (2000) concluded that the most significant reason for this high failure rate is the inability of SMEs to make adequate use of essential business and management practices. (p.12). However, you can improve your chances of success with good preparation and planning and insight. Why some businesses fail and why some succeed is a matter of debate, although there are some common mistakes that can sink a business in no time. One key area that small business owners often overlook is the importance of planning. Dennis (2001) found that management skills could ensure that small and medium sized enterprises are better prepared to compete in domestic and international (p.52). It is required to know what kinds of planning you should do before starting the small business. It includes unplanned financial management and unplanned marketing research.
John (2001) found that global economy is opening up new opportunities and challenges for these small business during the shift to a knowledge-based." (p.18).Size is not an excuse for slowness of response. According to Dennis (2001), "to be global, you need to dominate; to dominate, you need size."(p.52). Ownership of large organizations is usually distanced from its management and control, but not evident in the majority of SME. Management in small firms cannot be separated from motivation and actions of the key actors. Graham (2003) concluded that management decisions are made in the context of survival and operational necessity, rather than growth and business development for many small firms. (p.63).
Inadequate market research
Poor market selection is a common mistake, but it can be avoided. Analyzing demographic market analysis helps narrow the customer focus and the business focus. Products sold to universal markets are not usually successful, and conducting market data research will show a small business owner how often people will purchase similar items, people from which demographics purchase those items, how much money they spend and very specific spending habit information. Performing market needs analysis allows a small business owner to concentrate on his available piece of the pie and not spread out too thin trying to meet unnecessary needs of an unfocused market. Business owner should Estimate the competition and learn from the competition.
Following the competition's prices also allows for identifying seasonal trends that a business owner may not be aware of and knowing how much income to expect. This information is valuable for calculating realistic business costs and productivity quotas necessary for making a living.
Observe your competitors closely and always stay ahead of them.
The main reason why small businesses fail is poor planning of both finances and growth.
You must sort out the money matters before you start your small business. You need to calculate how much money you need to carry out your daily living expenses and how much money is required to run your business. You cannot ignore the demands of your new venture. Business owners have to organize adequate money on hand to cover all your financial needs of the business.
Many entrepreneurs do not know what they need to know, lack the financial resources to hire experienced business advisors.
A considerable number of people have unrealistic expectations when it comes to the funds needed to start a business. They often lack the necessary start-up funds and can't come up with adequate financing. Furthermore, a considerable number have virtually no cash or liquid assets and expect either a bank to provide 100 percent financing. In most instances, a bank will provide someone with financing unless that person is investing a significant portion of his or her own funds, boasts a good credit record and has the means to pay back the loan.
Most people wrongly assume the SBA will provide them with 100 percent financing based solely on their good ideas. But if someone has no cash at all, it usually reflects poorly on his or her ability to manage finances -something the SBA takes into consideration. Funds may be derived from cash savings, personal credit lines or family loans.
People work hard to create a small businesses and turning them into successful enterprises. However, they have no plan for what will happen to their business when they are no longer able to work so hard. They are ready to sell the business, but instead, it is more feasible to find a manager or a partner to share the business with.
SME with potential to become large sized global trading firms. Leads to sustained economic growth and national wealth building success in the world.
Money is not all the necessary investment you have to make in order to succeed in small business management.
Small businesses take risks seeking to be profitable. If we wish to sustain competitiveness in the global economy, it's critical that we pay more attention to the needs of SMEs in the area of growth strategies, best practices , skills development and access to mentoring.
believe that business is business regardless of the size of the company, the annual revenues, or the number of employees. Keep in mind that the largest businesses in the world were once small businesses and today they are worth a great deal of money. All businesses "managed" their way to the top, regardless of the industry.
A breakthrough in the research of "success in the small business training field" has been hampered historically by two obstacles.
Firstly the lack of focus of the training, and secondly the lack of focus of the research. Breakthroughs are only possible if we embrace innovation in both delivery and evaluation. By adopting an alternative conceptual approach to small business research, the barriers to successful training can be illuminated and then dismantled.
In this way the evaluation becomes a contributor to success and not merely a measure of it.
Time management is one of the most challenging issues facing small business managers both now and in the future. Research in time management has largely ignored this sector which is critical to the success of the business. While much of the emphasis on time management has been on the improvement of individual efficiencies and the reduction of problems associated with not getting work done, little consideration has been given to the factors that influence the take up of time management behaviours. Understanding these factors, though qualitative research, will help us provide better time management knowledge which may be beneficial to the management and success of small business in Australia.