Small Business
Essay title: Small Business
Small businesses have been considered the mainstay in countries around the world. In many European countries for example, the small business has been considered crucial to the success and flourishment of the country in general. Most individuals start upon a small business venture in the hopes of realizing ownership, independent profits and personal success. Small businesses can prove extremely successful when planned properly. Studies suggest that several small businesses, however, close or fail within the first few years of operation. This failure suggests that a majority of small business owners may not have as yet realized the crucial success factors necessary for successful implementation of a small business.
90% of all small business failures can be traced to, poor management, lack of planning and under capitalization that is why starting and managing a business takes motivation, desire and talent. It also takes research and planning. success in small business starts with decisive and correct opening moves. Don’t depend on customer loyalty, customers go to where the best prices are, keep tabs on competitors and service are. Make time each week or month to develop new methods, services or products. another key component is customer service, if you don’t serv them they’ll go somewhere else.
Companies should have only enough workers to perform essential operational functions. Hire employees who are well trained and able to pro-vide results. Moreover, employees should be happy, keep them motivated. Remember that just being good at one thing doesnt mean its enough for the business to be successful. The owner should be adept at several things such as hiring, accounting, marketing, public relations, etc. And, although initial mistakes are not fatal, it takes skill, discipline and hard work to regain the advantage.
To increase chance for success, take the time up front to explore and evaluate the business and personal goals. Then use this information to build a comprehensive and wellthoughtout business plan that will help you reach these goals.
The process of developing a business plan will help you think through some important issues that haven’t been considered yet. The plan will become a valuable tool to raise money for the business. It should also provide milestones to gauge the success.
These are the advantages and disadvantages of sole proprietorship, partnership and corporation are:
Sole Proprietorship is the easiest and least costly way of starting a business. A sole proprietorship can be formed by finding a location and opening the door for business. There are likely to be fees to obtain business name registration, a fictitious name certificate and other necessary licenses. Attorneys fees for starting the business will be less than the other business forms because less preparation of documents is required and the owner has absolute authority over all business decisions.
Partnership has two common types that are general and limited partnerships. A general partnership can be formed simply by an oral agreement between two or more persons, but a legal partnership agreement drawn up by an attorney is highly recommended. Legal fees for drawing up a partnership agreement are higher than those for a sole proprietorship, but may be lower than incorporating. A partnership agreement could be helpful in solving any disputes. However, partners are responsible for the other partners business actions, as well as their own.
Cash-flow is the place to start for greater control over cash flow is with a cash flow analysis. This helps determine the amount of financial help a company needs.
Most businesses have a cyclical nature – highs and lows, hot sales months and lulls, periods when materials cost more or less than usual. A cash flow analysis helps highlight these cycles, showing times when available cash rises or falls, or when cash outlay may result in a shortfall.
Once these periods are identified, they can be controlled. This, in turn, helps determine when credit may be needed. An accurate cash flow analysis can help the company better manage its money by increasing income or decreasing borrowing expense.
By covering the full range of your companys receipts and payments, a cash flow analysis is a useful tool in developing business plans and marketing strategies.
Its a powerful tool for diagnosis as well. By preparing a cash flow analysis can find ways to cut costs, identify potential trouble spots, rearrange work flows, or even discover untapped financial resources that didnt know were available.
Business funding can be difficult to find. Looking for venture capitalist, angel investors or bankers willing to take a risk on your business idea can be a lot to ask for in todays uncertain economy