Examine the nature of the distinctive managerial, organisational and developmental characteristics of small businesses vis-à-vis well-resourced large companies. What are the implications of such distinctiveness for small businesses attempting to achieve sustained growth?
Entrepreneur is someone who takes a risk and initiates to take up an opportunity in the market for any goods or service to be sold to the consumers. All decisions are made by the entrepreneur as he is the risk taker and this obviously involves people working under him for example managers. All the capital is raised, decisions are made by the entrepreneur and business activities are monitored by the owners itself. As Bolton(1971) describes in his report small businesses are the ones that relatively have a small share in the market. It is managed by owners and is independent as it is not a part of the larger enterprise. One of the major characteristic of small businesses is how intact the owners and managers are with each other. The owner has the control over the entire business and may take help in decision making with the managers(consult them). The owner takes part in all aspects of management as he is the capitalist( entrepreneur) but delegation of authority may be passed down to managers/employees( people working for them).
In order for a small business to be successful they need to employ personalised management, employ highly motivated staff and the owner must be involved in business activities that may influence in decision making. One advantage of a small business is the initial start up cost is low,hence investment on capital goods is low, this helps small businesses to enter the market with low barriers to entry. Though in the short run the entrepreneurs of small businesses may make high super normal profits. However, in the long run due to high competition in markets that sell homogeneous products may lead to small businesses reaching break-even point. For example ( If a small business gets known in the larger market and start branding their products and gain customer loyalty in this way they can survive in the industry and in the long run have the opportunity to expand/grow their own businesses. For example Facebook was invented by a student in Harvard University ( Boston) named Mark Zuckerberg. He started of real small in February 2004 by just creating a social networking online sight exclusively for the university students. However after some years he expanded, it eventually became public and anyone worldwide could make a Facebook account online. Marks idea is a success yet today he owns FB but it has become a Public limited company in this year 2012. Thus we can see here in this example how he took advantage of the opportunity that he got and from a small idea which he brought to the market and lead on to making millions of dollars even though there were high competitors such as MySpace, Orkut and Twitter which he over powered and took the limelight away in this market.
It is vital for entrepreneurs to innovate and seek the opportunity in the market whenever they the chance they take the risk and invest in the business and make profit. It is vital and important for entrepreneurs to fill in the gaps and find the right gap in the market that needs to to be filled in by meeting the needs/demands of the consumers with satisfaction,also giving after sales service and maintaining it. Many young entrepreneurs start up their own small businesses however it is a trial and error period for everyone as entrepreneurs are risk takers and one also learns a lot from good and bad experiences which helps them in make better decisions in the future. However as the technology is increasing and improving by the day small businesses may engage in businesses that is involved in high tech. An example of a very famous entrepreneur is Richard Branson. When he was sixteen he began his first successful businesses called “Student Magazine” in...
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