Question:
You are required to prepare a report monitoring the Importance of developing Business skills needed in reviewing and managing the performance of a small sole Proprietorship.
This report presents the business profile of QB House. It is also supportive to gain understanding regarding the advantages and disadvantages of entrepreneurship. This report explains concept of intrapreneur and entrepreneur. It also discusses the financial statement and SWOT to understand the financial and internal condition of QB House. It also demonstrates the skills of entrepreneurs for starting new business. This report shows the objectives, planning, and strategies of entrepreneurship. In addition, this report also discusses the reward and risk factors that can influence the performance of new business.
In Hong Kong, QB HOUSE offers haircutting service to their targeted consumers. This organization cannot offer certain services like blowing, shampooing, and shaving. Because, QB HOUSE is believed that such acts of consumers can be managed by themselves. The major aim of this company is to focus on haircutting service. QB HOUSE has less than 10 employees (QB HOUSE, 2017).
In the current scenario, more than 33000 small and medium enterprises are established in Hong Kong. It can be a positive impact on the development of the Hong Kong economy. The SMEs can help to obtain higher profit in less time and cost. In the existing business scenario, it is analyzed that the trade and industry development can positive impact on the improvement of small and medium-sized enterprises performance in Hong Kong. As a result, SMEs can be able to obtain a higher competitive benefit (Cuerva, et al., 2014). Small and medium-sized enterprise is defined as manufacturing enterprises where less than 100 staff member are employed while non-production business have employed fewer than 45 workforces (Brunswicker, et al., 2015). In the existing period, it is evaluated that approximately 290,000 SMEs accounts are opened for local business. The small and medium-sized enterprise provides benefit to more than 65% of private sector workforces. It is evaluated that 90% of Hong Kong enterprises have less than 10 employees that can be a major issue for the organization (Classen, et al., 2014).
The entrepreneurship refers to the ability and willingness to build, manage, and organize the firm to make profit. The starting of a new venture in the marketplace can be the best example of entrepreneurship. In the entrepreneurship, an entrepreneur considers three factors such as land, capital, and resources. The entrepreneurship refers to the innovation and risk-taking which are significant part of the business for obtaining the competitive benefit. In addition, an entrepreneur may face many challenges at the time of starting the small and medium-sized business enterprise. The entrepreneurs are competent to obtain many advantages from the SMEs such as increase consumer loyalty, faster decision, and easier to make linked with employee and company. Further, entrepreneurs are able to build liaison among employees by using easier communication way (Lee, et al., 2015).
The major advantage of SMEs is to build closer relationship with consumer because it identifies the needs and requirements of consumer. In the SMEs, management can be capable to take a faster decision as it would help to solve the business issues in less time. Besides this, the company may also face many disadvantages at the time of starting a new business in the market such as difficult to collect the capital, difficulty to reach a larger number of consumers, and make a favorable image in the consumer mind. Other factors are higher cost, less skilled person, complexity in using the modern technology, and low bargaining power. In addition, it can be said that the entrepreneur faces major issues at the time of collecting the capital to operate their business systematically. It is very difficult for the entrepreneur to make positive image amongst the consumers towards their product and services. The initial cost of investment could be expensive as it creates the complexity for the entrepreneur to operate their business in the marketplace (Child, et al., 2014).
The following table demonstrates the difference between entrepreneur and entrepreneur
|
Bases of Difference |
Entrepreneur |
Intrapreneur |
|
Dependency |
The entrepreneur relies on the business operation. |
While the Intrapreneur is based on the entrepreneur. |
|
Funds Raising |
The funds are raised by the entrepreneurs himself that are required in the enterprise. |
The funds or capital cannot be raised by the Intrapreneur. |
|
Risk |
The entrepreneurs bear all types of risk that are occurred in the enterprise. |
The Intrapreneur cannot bear the uncertainties that are included in the enterprises. |
|
Operation |
The entrepreneur runs from outside. |
Besides this, an intrapreneur functions within the working place itself. |
|
Approaches |
Intuitive |
Restorative |
|
Enterprise |
Initially established |
An existing one |
Entrepreneurs are goal oriented as it helps to make successful entrepreneurship. The entrepreneurs make all the decision within an organization such as they are responsible to inspire the each member of business towards their goal. Furthermore, entrepreneurs are responsible to engage their employees towards their task which is effective to grab the opportunity for future success. The entrepreneurs are also committed to their business operation until they got success (Tarut?, et al., 2014).
SWOT analysis of QB House
|
Strength · Low-Cost production · Specific services to the consumers · Higher employment rate · Support of Government |
Weakness · Lack of attractive infrastructure · Lack of awareness towards the modern technology · Lack of skilled employees |
|
Opportunity · Adaption of appropriate marketing · Approaches in context of MNC’s |
Threat · Entry of Multinational organizations · Corruption level |
SMEs (Small and medium-sized enterprises) are the strength of industrial development. It can be effective for both countries such as developing and developed. The SMEs focuses on the economic development model, which is based on certain factors such as high contribution to regional production, export earnings, employment generation, foreign exchange earnings, and low import-intensive and domestic production. In Hong Kong, there are also some external factors that can influence the entrepreneurship like legal, political, technological, social, economic, and environmental (Ciravegna, et al., 2014). It is also analyzed that such factors cannot be controlled by the company. In addition, it is also observed that economic crisis, consumer behavior, governmental policies, corruption, and geographical location can direct impact on SMEs. The internal factor can be easily controlled by the organization. There are certain factors that affect the SMEs like competencies of management, lack of skilled employees, promotional technology, research and development, and CSR. Moreover, SMEs can consider both internal and external factor to improve their performance in long-term (Palacios, et al., 2015).
Small and medium-sized enterprise manages the issues at macro and micro level. It also creates the equilibrium condition between the monopoles and oligopolies market structure. Further, it can eliminate the challenges at higher level by controlling the marketing activities.
The Small and medium-sized enterprises are very flexible because it has ability to make adjustment within an organziation due to minimum employees and fast decision proces (Awa, et al., 2015). It focuses on conducting the market research as it is able to meet the requirements of consumers. Simultaneously, it can be said that QB house should deeply understand the consumer preference by conducting market research as it can influence the demand of customers towards their product and services. Further, QB House can enhance their financial conditions by using the economic development model. The SMEs can build and discover the new technologies to positively influence the economy of Hong Kong. It is also analyzed that Small and medium-sized enterprises play an imperative role in the innovation procedure because they have the capability to invent the new tools and techniques and improves the existing techniques in an appropriate manner (Casey, et al., 2014).
A manager of QB House should different skills at the time of establishing the SMEs such as multi-tasking, leadership skills, decision making, business development skills, effective communication, and motivation skills. These are discussed as below:
Multi-tasking
A manager should be able to supervise the staff member and maintain their capabilities for attaining their specific goal systematically. It is also analyzed the effective manager should be capable to perform multi-task and make balance between the weaknesses and strengths of employee without losing the company productivity.
Leadership
The leadership skills can be imperative for managers of QB house because it can enable to lead the team member for attaining their specified goal in less time and cost. The leadership skills can facilitate the manger to inspire their team members by giving them positive example. As a result, it will improve the professional skills of employees (Gbandi, et al., 2014).
Motivation
The motivation can direct impact on the growth of business because it internally encourages the employee to meet their specified goal. At the same time, the manager can clear the roles and responsibilities of their employees and solve their issues to get a feasible result.
The personal characteristics of entrepreneur play an imperative role in the entrepreneurship for enhancing the financial performance of business. There are certain personal characteristics of entrepreneurship such as motivation and passion, risk-taking, adaptability and flexibility, management of money, planning, and networking abilities, which may affect the business performance (Hottenrott, et al., 2014). It is described as below:
Motivation and passion
The entrepreneur should be passionate about their specified goal and should be self-motivated because it can support them to get the reliable result. A self-motivated entrepreneur can be able to guide their employees in a positive manner and inspire themselves to attain the goal within QB house (Wamba, et al., 2016).
Risk management
An entrepreneur should be able to manage the risk in less time and cost by using the appropriate business concept. As a result, an entrepreneur can obtain the feasible outcome systematically.
Objectives
Planning and strategies
QB house can use many strategies in order to meet their specified objectives. These strategies are personal selling, deliver added value to customers, positive feedback system, and offer quality product and services to the potential consumers.
Job satisfaction
Small and medium-sized enterprises can be supportive for creating the job satisfaction in the working place. QB House has limited employees that can be easily inspired by the entrepreneurs towards their work. Thus, it can be said that an entrepreneur can gain the job satisfaction level of employees due to small size organization (Zhou, 2016).
Create jobs
The small and medium-sized enterprises can provide an opportunity for the people to start their work on any new subject. It also entails the human resources to operate the business activities.
Networking
The SMEs can also supportive to make networking amongst the employees and consumers by fulfilling their needs. At the same time, the SMEs are very closer to the customers due to meeting their requirements as it ultimately impact on developing a robust network in the marketplace.
Financial independence
SMEs can provide financial independence to the entrepreneurs by giving different opportunities for them. It can also provide freedom to the entrepreneurs in terms of making profit and loss statement for their organziation.
Risk
There are three kinds of risk that can be faced by the entrepreneur at the time of starting a business such as financial risk, labor risk, and product risk. These are discussed as below:
Financial risk
The financial risk is related to the financing of small and medium-sized enterprises operation. This risk can be occurred by different factors such as interest rate, credit amount, cash flow, and market risk. It can decline the growth of business (Chong, 2014).
Labor risk
The labor cost can direct impact on the performance of small and medium-sized enterprises. It can occur from different sources such as third-party risk, union management, workplace safety, talent concerns, and regulatory shifts. It can decline the growth of enterprises.
Product Risk
The product risk can arise when organizational structure fails to fulfill rational preference of their consumers, stakeholders, and users. Moreover, another cause of product risk is lack of competencies among entrepreneur to fulfill the needs and expectation of their consumers.
An entrepreneur can decline the financial risk at the working place such as avoid the assumption in the context of the liability design, observer the corporate formalities and make an effective plan before putting money in the business operation. Besides this, the labor risk can be managed by using different strategies such as appropriate selection of employees, training and development method, improve working culture, and enhance the skilled labor at the working place. In addition, it can also be said that the product risk can be improved by offering the quality product and services, enhance the consumer loyalty, and application of social media (Wamba, et al., 2016).
Conclusion
From the above discussion, it can be concluded that small and medium-sized enterprises can be positive impact on the growth of the economy. In addition, it can also be summarized that there are different types of risk that can be faced by the entrepreneurs such as financial, product, and labor risk. Finally, it can be illustrated that the SMEs can enhance the job satisfaction level, create more jobs, fulfill the need of consumers, and create the networking in Hong Kong.
References
Awa, H. O., Ojiabo, O. U., and Emecheta, B. C. (2015) ‘Integrating TAM, TPB and TOE frameworks and expanding their characteristic constructs for e-commerce adoption by SMEs.,’ Journal of Science and Technology Policy Management, 6(1), pp. 76-94.
Brunswicker, S., and Vanhaverbeke, W. (2015) ‘Open innovation in small and medium?sized enterprises (SMEs): External knowledge sourcing strategies and internal organizational facilitators,’ Journal of Small Business Management, 53(4), pp.1241-1263.
Casey, E., and O’Toole, C. M. (2014) ‘Bank lending constraints, trade credit and alternative financing during the financial crisis: Evidence from European SMEs. Journal of Corporate Finance, 27, pp. 173-193.
Child, J., and Hsieh, L. H. (2014) ‘Decision mode, information and network attachment in the internationalization of SMEs: A configurational and contingency analysis,’ Journal of World Business, 49(4), pp. 598-610.
Chong, S. (2014) ‘Business process management for SMEs: an exploratory study of implementation factors for the Australian wine industry,’ Journal of Information Systems and Small Business, 1(1-2), pp. 41-58.
Ciravegna, L., Lopez, L., and Kundu, S. (2014) ‘Country of origin and network effects on internationalization: A comparative study of SMEs from an emerging and developed economy,’ Journal of Business Research, 67(5), pp. 916-923.
Classen, N., Carree, M., Van Gils, A., and Peters, B. (2014) ‘Innovation in family and non-family SMEs: an exploratory analysis. Small Business Economics, 42(3), pp. 595-609.
Cuerva, M. C., Triguero-Cano, Á., and Córcoles, D. (2014) ‘Drivers of green and non-green innovation: empirical evidence in Low-Tech SMEs,’ Journal of Cleaner Production, 68, pp. 104-113.
Gbandi, E. C., and Amissah, G. (2014) ‘Financing options for small and medium enterprises (SMEs) in Nigeria,’ European Scientific Journal, ESJ, 10(1).
Hottenrott, H., and Lopes-Bento, C. (2014) ‘(International) RandD collaboration and SMEs: The effectiveness of targeted public RandD support schemes,’ Research Policy, 43(6), pp. 1055-1066.
Klewitz, J., and Hansen, E. G. (2014) ‘Sustainability-oriented innovation of SMEs: a systematic review,’ Journal of Cleaner Production, 65, pp. 57-75.
Lee, N., Sameen, H., and Cowling, M. (2015) ‘Access to finance for innovative SMEs since the financial crisis,’ Research Policy, 44(2), pp. 370-380.
Palacios-Marqués, D., Soto-Acosta, P., and Merigó, J. M. (2015) ‘Analyzing the effects of technological, organizational and competition factors on Web knowledge exchange in SMEs.,’ Telematics and Informatics, 32(1), pp. 23-32.
QB House (2017) about us. [Online]. Available at: https://www.qbhouse.com/hk/en/about/ (accessed: 27 November).
Tarut?, A., and Gatautis, R. (2014) ‘ICT impact on SMEs performance,’ Procedia-Social and Behavioral Sciences, 110, pp. 1218-1225.
Wamba, S. F., and Carter, L. (2016) ‘Social media tools adoption and use by SMEs: An empirical study,’ In Social Media and Networking: Concepts, Methodologies, Tools, and Applications (pp. 791-806). IGI Global.
Zhou, B. (2016) ‘Lean principles, practices, and impacts: a study on small and medium-sized enterprises (SMEs),’ Annals of Operations Research, 241(1-2), pp. 457-474
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