Monday, August 27, 2012

Strengths and Weaknesses of Small Business Owners


Strengths and Weaknesses of Small Business Owners


Introduction

According to Wikipedia a small business varies widely around the world. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. What constitutes "small" in terms of government support and tax policy varies by country and by industry, ranging from fewer than 15 employees under the Australian Fair Work Act 2009, 50 employees in the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs,

Externally (strengths)

Small businesses are more or less the same within the same industry when you look from the outside because they employ similar way to operate a business.  

·         Business model: There are able to copy and imitate how other successful entities operate a business in a particular industry. They sell more or less the same products, using the same channel to reach consumers. They advertise where others do.  They have their own logo, a registered trade mark, a website and Facebook present. For those workers that are in contact with customers, they wear smart uniform.  Smart business owners choose cash term to do business transactions. 

Internally (weaknesses)

However, the weaknesses of small business owners cannot be noticed by an outsider.
Here are some of the shortfalls:
   
·         Hire their own people: Usually it is family-owned. They hire their family members and relatives to work for them. They may not get the best people to run the business and their growth is restricted.  Worse still they may not be able to manage the business properly. 

·         No clear vision: They usually jump on the bandwagon and follow the current business trend. There is no creativity to differentiate their brand from others. Usually there is no long-range planning.

·         No system in place: They do not do budget or cash flow projection. There is no internal control such as stock. There are few written rules and regulations for staff to follow or operating procedures.

·         Not valuing the people who work for them: Staff get the minimum benefits from their owners. There is not much training or development, but they are the ones who are in close contact with customers. There is no clear career path and you don’t expect the owners to raise your pay without you asking for it because there is no staff evaluation or performance assessment.

Conclusion (the way to go forward)

If the owners are able to hire people more capable than themselves, they will prosper. They will definitely grow much faster with a proper management system. They will build a better brand in the market place if they care more about their workers.   


Related post:
7 Things to Consider Before You Start a Business of Your Own

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