small business intro

Small Small BusinessBusiness

Munif AhmadMunif Ahmad

Small Business

very small businessvery small business bigger small businessbigger small business

Owner = principal worker

Owner = principal worker

Owner directs work

Owner directs work

One or more assistants

One or more assistants

called Micro business

called Micro business

Definition of Small Business

The Magna Carta for Small Enterprises The Magna Carta for Small Enterprises R.A. 6977R.A. 6977

Any business activity or enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant & equipment are situated, must have value falling under the following categories;

micro

cottage

small

medium

Less than $5,000

$5,000+to

$25,000

$25,000+to

$100,000

$100,000+to

$2500,000

In terms of capitalization

micro

cottage

small

medium

Five (5)Or

Less workers

6 to 9workers

10 – 99workers

100 – 199workers

In terms of employment size

Characteristics

SmallBusiness

SmallBusiness

privately owned

few or no layers of

management

insufficient resources

to dominate its field of business

Features of a Small Businesslow in capital but high in labor intensity

efficient in specialized skill or service

succeeds in small, isolated or overlooked markets

often operates in unstable markets

closer to the market place

owners are the workers

capital comes from the owner or small group

area of operation is small

size of the enterprise is small in relation to the industry

Personalized relationship w/Customers

and employees

Flexibility inmanagement

Government incentives

Simple record keeping

independence

Advantages

Advantages

The Difference

Small Business Big Enterprise

changebirths or deaths expansion or contraction

risk or reward calculationdone by owners employee - managers

economic powerlittle or none tremendous influence

Difficulty ofraising capital

Risk of failure

Limited management skills

Lack of opportunitiesfor employees

Disadvantages

Disadvantages

Its importance

Introduce

innovation !!!Introduce

innovation !!!

Provide competition

Provide competition

Fill needsof society &big business

Fill needsof society &big business

Creates

employmentCreates

employment

Revenues

of local

communitiesRevenues

of local

communities

Factors influencing Success or Failure

businesscycles

governmentregulation

accessto

capital

interest rates

inflation

SUCCESSor

FAILURE

Lack of experienceLack of experience

Lack of moneyLack of money

Poorly plannedexpansion

Poorly plannedexpansion

Poor creditpractices

Poor creditpractices

Mismanagement of inventory

Mismanagement of inventory

Wrong locationWrong locationBusiness Failure

Why small business fail?

reach to my

potentials

reach to my

potentials

im theBOSS im theBOSS

serviceto my society

serviceto my society

money, money,

money!!!

money, money,

money!!!

Benefits and Opportunities of Owning a Business