Fundamentals of business and management are invariably the same irrespective of the size of the business. The complexity and sophistication vary with size. Small business entrepreneurs must deliberate on entrepreneurial innovation and implement accordingly for growth. One must remember that the big companies grew from a smaller size and some of the world’s most famous entrepreneurs started with small businesses at some stage. The basic problems that small business entrepreneurs face are:
- Restriction in range of the products
- Low reputation
- Deficiency in capital
- Inadequate business management
- An increasing dependence on the local market
To overcome these problems, small business entrepreneurs can learn to keep issues simple, minimize cost and improve efficiency constantly.
Basic Management Principles For Small Business Entrepreneurs
Small business entrepreneurs can implement the following principles for effective management of their venture.
- Keep all the issues simple and manageable
- Minimize cost on a regular basis and keep economizing
- Find ways to improve efficiency constantly
- Evaluate facts and opportunities objectively and logically
- Aim at increasing profits
- Concentrate on every task on hand
- Don’t become slack in running the business
- Follow a flat organization by spreading authority
- Identify and improve on shortcomings
- Share the benefits of success with clients and customers
Small Business Entrepreneurs Measuring Success
Small business entrepreneurs may set clear and meaningful targets by quantifying them. These become the business objectives. Calculation and research in measurable terms will dictate your state of success. Make projections for the future based on these and review often. It is imperative that companies measure their success against their objectives and targets to understand the state of the business accurately. Small business entrepreneurs must set objectives that can be quantified and measured.
- Measuring progress against individual aspects of the company like a marketing campaign, brand awareness, profits and debts
- Make a numerical projection that even if approximate can give you a clarity of the business growth
Advertising For Small Business Entrepreneurs
The basics of advertising works best for small business entrepreneurs. Creative and innovative methods are definitely effective. The investment is negligible and can be recovered.
- Print fliers in the local neighbourhood and works best with tantalising offers
- For small business entrepreneurs, it is worth advertising in a commercial phone directory
- Run a series of advertisements that can be purchased at discount rates
- Contact regular and potential customers
- Mailers to consumers that are personalised
- Small business entrepreneurs may sponsor some local event in the community
- Small business entrepreneurs may exploit the market niche by specializing in it
- Small business entrepreneurs can get a website developed. Use an influential blogger, exchange links with other sites, bid for keywords relating to your business and advertise with relevant websites. These will increase your ranking with the search engines.
Small Business Entrepreneurs Interested In International Trade
With communication and travel becoming cheaper and accessible, international markets are open to ambitious small business entrepreneurs. Remember, it is vital to have established your business in the UK simply because you understand your local market better. Trade within Europe is straightforward with the European Union establishing a common trade policy spanning many countries. The Euro is the single currency adopted and makes it relatively simpler to trade with.
Small business entrepreneurs must account for import duties while trading with the US, the most tempting market. Trading with emerging markets may be complicated but you can be assured of high growth and profits. Argentina, Brazil, China, Egypt, India and Philippines are some of the major emerging markets worth considering. The cheapest and quickest way to establish trade with another country is by the ‘Internet’. Research the country you are interested in, set up a website in the local language with an international domain name. Initiate trade with a distributor of the target country. This could make your entry into the market relatively easier.
Taxes For Small Business Entrepreneurs
Small business entrepreneurs must cover assets, liabilities, revenues, expenses and equity in their financial book. Maintain separate records for each of the same. Profits determine the existence of a business but constant cashflow is the life of the business. There are various taxes that are applicable to you in the UK and an accountant will be able to explain them in detail.
- Small business entrepreneurs must register for VAT even if you are below the mentioned threshold. VAT is levied on consumers and not suppliers. This is a predetermined percentage of the sale price. The VAT amount must be submitted to HMRC quarterly. The recipient can claim the VAT component charged by the supplier.
- Individuals and corporations are subject to Capital Gains Tax but companies can claim an indexation allowance to reduce the effect of inflation.
- Small business entrepreneurs are eligible for business rates if they occupy commercial property premises.
- Small business entrepreneurs can save tax amount forming a limited company as corporation tax is lesser than income tax.
Finance Options For Small Business Entrepreneurs
There are various options for small business entrepreneurs to raise finance in the hour of need. Comprehensive business plan could convince any of the investors to back your venture.
- Raise finance from known sources like family friends and acquaintances as it is the simplest and cheapest option. Be fair and return it with interest. It is critical to be cautious in using this option as mismanagement could harm the relationship.
- Banks offer loans against collateral. For smaller loan amounts, an existing small business entrepreneur can avail loan without surety.
- Convinced affluent people often invest in
start upcompanies in exchange for a stake. They may even network and offer expert guidance for better growth. The British Business Angels Association can guide regarding angel investors interested in your locality.
- Small business entrepreneurs can apply for a grant with ‘The Prince’s Trust’ for a loan up to £ 4000
- Small business entrepreneurs whose venture is research oriented can apply for any of the R&D grants with the RDAs.
- Small business entrepreneurs can apply for Grant for Business Investment if they are modernising their company
- Small business entrepreneurs can apply for Enterprise Capital Fund for equity finance.