LESSON 1
1.1 CHARACTERISTICS OF A SMALL BUSINESS
- Is independently owned and operated
- Has a capital contribution from a limited number of individuals
- Would usually operate in a local area
- Would probably not be dominant in its field of operation
1.2 CRITERIA WHEN DECIDING ON SIZE:
- Capital employed
- No. of employees
- Market share
- Sales revenue
- Profit
- The physical size of the plant
- No of divisions
1.3 OWNERSHIP & MANAGEMENT:
Founder & Owner
1.4 PLANNING & CONTROL:
- Jobs are not so rigidly defined
- More flexibility between jobs
- Less formality
- Quicker decision making
- Rules and procedures less rigid
1.5 MOTIVATION:
- Wider range of duties
- Greater satisfaction
- Pay & reward systems
- More personalized
- Closer identity with the organization
1.6 ADVANTAGES:
- Can be easily set up and dissolved
- Greater profit (not shared)
- Flexibility to act; do not need approval
- Lean with a small staff (permanent)
- Fewer overhead cost
- Staff work longer hours without extra pay
1.7 DISADVANTAGES:
- Poor management
- Less easy to acquire loans
- Competition from large firms leads to being forced out of business
- No room for promotions
1.8 WAYS IN WHICH GOVERNMENT CAN HELP:
- Low-interest loans (NEDCO)
- Provide infrastructure – even factory shells
- Tax breaks – import duty/corporate tax
- Training & Development
