Chapter three discusses the meaning, characteristics, and importance of small businesses, which vary by definitions across different contexts and agencies. It highlights factors for success, reasons for failure, and essential topics like business planning, marketing, financial management, and customer service for small business owners. Additionally, effective management, stakeholder relationships, and continuous learning through professional courses are emphasized as key components for avoiding common pitfalls.

1. CHAPTER THREE
Small Businesses
Khalid Ismail Ali
(PhD candidate)

2. Small Businesses

4. Chapter Content
 Meaning of Small Businesses
 Nature and Characteristics of Small
Businesses
 Importance of small businesses to
National Economy
 Factors Contributing for the
Success of Small Business

5. Meaning of Small Businesses
 The definition of small business
differs from country to country.
There may even be different
definitions used by different
agencies in one country.

6. Cont..
 In addition, the definition can vary
according to the frame of reference by
different business people such as:
 Financers: in terms of level of fixed assets
or value added by the business
 Traders: use ceiling limits of sale of volume
Service personal: use the total number of
customers.
 Manufactures: use maximum level of
energy required for production. Labour
 officers: use the total number of persons

7. Nature and Characteristics of Small
Businesses
 1. Financing of the business is supplied
by one individual or small group. Only
in a rare case would the business have
more than 15 or 20 owners.
 2. Personal character: in most small
business the owners themselves are
managers and can operate
independently which is helpful to give
customized service to their clients

8. Cont..
3.Local area of operation: except for
its marketing function, the firm’s
operations are geographically
localized. Typically its operation is
limited to one city or community.
4. Compared to the biggest firms in
the industry, the business is small.
5. The number of employees in the
business is usually fewer than 100.

9. Importance of small businesses to
National Economy
 Economic Contribution
 Social Contribution
 Technological and political
Contribution

10. Establishing Small Businesses
1. Selection of business
2. Detailed Investigation
3. Selection of form of business
organization
4. Study of legal requirements
5. Selection of place and staff
6. Management structure

11. Factors Contributing for the Success
of Small Business
 Determination of objectives
 Planning
 Sound
 Organization
 Adequate capital
 Efficient management
 Research
 Business good will
 Satisfied customer

12. Reasons for Failure of Small
Business
 Lack of finance
 Poor availability of infrastructure
 Obsolete technology
 Marketing problems
 Poor managerial and organizational
skills

13. What Do you understand this picture

14. Avoiding pitfalls of small
businesses
 1. Know your business in depth
 2. Have a good relation with stake
holders
 3. Prepare business plan
 4. Managing financial resources
 5. Understanding financial statement
 6. Learn to manage people effectively
(HRM)
 8. Take up short professional courses
in management (entrepreneurship)

15. Important Topics to Cover
during Starting Small business
 small businesses cover a wide range
of topics crucial for success. Here
are some of the most important
ones:
 Business Planning
 Marketing and Branding
 Financial Management
 Legal and Compliance
 Customer Service and
Relationship Management

16. Business Planning
 Business Planning: This seminar
focuses on creating a solid business
plan, including market analysis,
financial projections, and operational
strategies.

17. Marketing and Branding
 Marketing and Branding:
Understanding how to effectively
market your business and build a
strong brand presence is crucial. Topics
may include social media marketing,
content marketing, and branding
strategies.

18. Financial Management
 Financial Management: Small
business owners need to understand
basic financial principles like
budgeting, cash flow management,
and financial forecasting. Advanced
topics might include accessing capital
and managing investments.

19. Legal and Compliance
 Legal and Compliance: Seminars
covering legal and compliance
issues help small business owners
understand their rights and
obligations, including business
structures, contracts, intellectual
property, and regulatory
requirements.

20. Customer Service and
Relationship Management
 Customer Service and
Relationship Management:
Happy customers are the lifeblood
of any business. Seminars in this
area cover topics like customer
satisfaction, complaint handling,
and building long-term customer
relationships

21. Technology and Innovation
 Technology and Innovation:
Keeping up with technology trends
can give small businesses a
competitive edge. Seminars may
cover topics like e-commerce,
digital transformation, and
leveraging technology for efficiency
and growth

22. Human Resources and
Leadership
 Human Resources and Leadership:
For businesses with employees,
seminars on HR and leadership are
crucial. Topics may include hiring and
onboarding, employee relations,
performance management, and
leadership development.

23. Networking and Collaboration
 Networking and Collaboration:
Building a strong network can open
doors to opportunities and
collaborations. Seminars on
networking provide tips and
strategies for effective networking
both online and offline.

24. Sales Strategies
 Sales Strategies: Sales seminars
help small business owners develop
effective sales strategies, including
prospecting, lead generation,
negotiation, and closing techniques

25. END
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