Describe about the Report on the Business Skills Analysis of the Small Business Enterprises?
The business skill is required to develop a business strategy of a small scale enterprise with the help of the management skills, interpersonal skills and business skills. These skills are mainly used in the operation task of the business. The management principles are important for the small scale enterprises to grow in the economy. Sometimes just because of the non-cooperation or not properly assigned management skills can make the new business activity suffered and as well as some others factors also get aggravated in the business process. So it is most important to understand the concept of the business skills which provide a boost to the business activities.
The authority of the business should give priorities to the small business are financial, marketing, and procurement skills. There are some more skills are utilized to support a business to grow are some legal, business, and entrepreneurial skills with support of these activities the small business enterprises about to grow in the economy (Abdi, 2013).
According to the many research and survey by the owner of the business is explained that promoting business and investment planning is the most two important skills are required for the growth of the small scale enterprises in the economy of a nation. The research study said that marketing and financial skills are the most required business skills in the economy, owner of the business are mainly focus on these criteria for better services in the society.
The growth of the economy is mainly depends upon the contribution of the small enterprises in the country. In many countries small enterprises are mainly gear up the society development and as well as increment in the gross domestic product of the country by providing the huge employment opportunity and job based training for the employees of the company. According to the research the small firms of country are the highest job provider and as well as contributing huge share in the development of the environment and country (Adendorff and Vilakazi, 2013).
In many countries small scale business are creating huge profit and as well as also contribution of their in the society by making higher amount of people employable. According to the some researcher the small scale business entities are creating 50% plus job opportunity in the country United Kingdom and also in the country India the small scale industries are contributing 40% gross value of industries and 37% on the exports activities from the economy India. The gross domestic product of the country Malaysia is lesser than the small firm’s growth in the Malaysian economy. There is some most important role performed by the small scale business in the different countries by using the proper business skills (Agnes U, 2013).
According to the some researcher the small enterprises are more in nature rather than others. The economy of the countries is mainly developed by this kind of business enterprises by providing the equal income level, enhancing welfare for the economy’s common people and by utilizing the proper resource of the economy. The small scale firms are having capabilities to increases the long-term goal for the nation.
The research said that small enterprises having fear of failure in their evaluation stage itself. There are some of business enterprises which are faces failure during their few years of the establishment. Only few of them are able to cop up with their survival situations and rest of fall down within the five years duration of time. There are 6% of small scale enterprises which are about to survive for the more than 10 years in the economy. Every countries around the having same kind of experiences about the small scale business (Aishah Bua and Idayu, 2011). Those group of people or the business authority started business with not sufficient skills for the better management should be the main drawbacks of the failure of the business. The small scale enterprises are mainly having business to provide a particular product and services at an affordable rates. The small scale business are not able to fulfill the political and social changes of the country. Mainly small enterprises of retailer’s which is started in the shopping mall and super market are mainly reaches to the goal with the support of capturing potential market of the economy. The small scale enterprises having many skills inbuilt to support their business and street smartness characteristic and other management skills required to make successful to any small scale business entity (Malul and Shoham, 2013).
The small scale enterprises are mainly owned by an individuals and a group of people in the business by hiring few numbers of employees for their business operation. The business enterprises can be small in terms of the sales activity, assets allocations and net earnings of the business activity. According to the financial structure of the economy is depends upon the small scale business of that economy for example the bakeries, restaurants, and some other manufacturing concern (Mascle, 2013).
The SWOT analysis is mainly used by the company to measure their strategies of the business with the other business threats in the environment. There are some factors are internally gives impact on the business or some of them are externally affects the business objectives and strategies formed by the business authorities (Alhabeeb and Moffitt, 2013).
Strength analysis gives the idea about the business activities benefits for the entity in the economy. The weaknesses of the business are defining that what business entity need to improve in the future. Opportunities for the business are mainly depends upon the external environment for higher profit and sales activities. The threats factors are mainly gives positive alert to the business environment about the external difficulties trouble the activities of the business entity.
There are some strengths are following in nature for the small scale enterprises to grow in the economy of nation.
Innovativeness & Creativity are the features for the small scale industry to explore the business activities. The ability to attract the customers by innovation of new products and services with the support of their creative team. The timely step to change the trends and the business activities by taking quick decisions about their business strategies (Baker, 2013).
Adaptability to Change is the most flexible characteristic of the business which leads business to perform efficiently in the market according to the changes happens in the trends of the market and taste and preferences changes of the customers of the company.
Independency is the also a good feature of the small scale enterprises to grow in the market independently with the individual entity correspondence. According to the study it is known as that those company who are established by the small owners are mainly quit from their job from some multinational company and started their own business enterprises to earn the profit of the business and the ruler of the business (Baron, 2012).
Good Customer Relationship is the proper mode of the success of their business by directly connected to the customers related to the business activities. In the small scale business the management authority of the business can easily take the review and feedback of the services and products provided by the company and making a good relationship with them for the better future reference of the business (Roebuck, 2012).
The small scale business entity are mainly unable to reach the proper number of the potential customers for the growth of the business. According to the customer’s perception the small scale entity is not able to supply the good quality of products and services like big companies (Basile, 2012).
The small scale industries are mainly about to reach the investing money in the business is from their own pocket. Mainly this kind of the organization are not supported by the financial institutions and the banks because they are not able to reliable on the sustainability of the business.
The owner of the business is mainly invested alone the huge amount of money the manufacturing activities of the business which gives the huge financial pressure to the owner of the business alone and it is an disadvantage for the economy as well as the company.
The entities are mainly avoid the management techniques to make simple to their business activities are mainly taking the business towards failure because of the lacking the managerial skills growth for the running business entity properly in the economy.
According to the survey and research the company which is having small scale business are not utilizing the proper IT information and using advance technologies to grow their business in the economy. Mainly it is assumed that those business enterprises actually uses the information technology are having huge growth in their business entity.
According to the research the government of any nation providing lots of opportunities for the small scale enterprises. There are huge numbers of organizations and frameworks maintained for the small industries to grow the society or in the economy (Brustbauer, 2014).
There are also lots of threats for the business activities in the small scale business entity and these threats can destroy the business entity by many nature (Clark, 2013).
There are some businesses models are followed by the Small Scale enterprises for better performance in the market (Development of Design Management Evaluation Factors for SME’s, 2013).
The boutique can offer the competitive price with compare to their competitor company with some extra deal add up with that to finalize the price. These models are providing benefits the seller and also buyers to combine some products at a fixed price.
Advertising model is famous and affordable now days by enterprise to promote their products and services in front of their public to attract them. Televisions and other means of the communication are mainly used in promotional activities.
This model is mainly about hiring a third party who will sell the products of the company and on behalf of that receives commissions. The third parties are simply referring the dresses to the customers. This activity is very famous over online sources with higher success.
The direct selling facilities is the oldest and as well as the finest model provided by the seller and also preferred most by the buyers in the market where they can actually directly negotiate with the sellers and make them understand about the actual requirement of the customers.
The business skills required for the development of the small scale enterprises are mainly several types in nature are entrepreneurship skills, management skills, and technical skills important for the development of the any small scale business entities (Haghi, 2013).
The technical skills are mainly used in the manufacturing activities of the business related products and services. The managerial skills are mainly essential for the daily management and other admin activities of the company. The entrepreneurship skills are for utilizing and gabbing the economical chances and working on that effectively and efficiently. There are some more other skills are for the business entities awareness, and creativity and accountability to perform well during the growth period of the company (Hosseini, 2013).
There are some key skills needed for the business owners which will take the enterprise in a prominent growth phase in the economy:
Analysis of the small scale business using the financial comparative measurement of their performance
The comparative measurement of a small scale industry is the way to measure the financial feasibility of the enterprises. These data are mainly having earnings of the company turnover and different measurement tools to analyze the financial position of the enterprise in reality. The other turnover measures are employee’s turnover and the inventory turnover etc. (Hosseinzadeh, 2013). the financial measurement of any small scale enterprise are mainly analyze the productivity and efficiency of the company while making financial decision. Financial part helps to understand the funding of the organization that whether there is efficient fund to run the organization or not. Often the financial data are processed for the betterment of the organization. There are some financial statement of which gives the proper support while analysis of the organizational financial status in compare to their competitors (Kaur Azad and Singh, 2013).
The profitability status of a company is identifying by the calculation of profitability ratio of that company. And with the help of those ratio figures the status of the business can be identified. The ratio which helps in measuring of profitability position of the company is mainly ROE, ROCE, Net profit margin and Gross profit margin.
The calculation of return on equity is mainly identified the volume of shareholders invested in the company and according to that investments how much a company earned in return.
ROCE is mainly identified that how efficiently manage the organisation’s long term investments to acquire more returns from there. The future profitability situation are mainly depends upon the return on capital equity. To measure the successive performance of the company return on capital equity has to measure by the company.
The companies mainly calculate their liquidity ratios on the basis of the obligation meet by the company in compare to the other competitors. With the help of the liquidity ratio the organization can transfer their cash from assets of the company to settle their debt. Mainly to compare the liquidity ratio of the company current ratios and acid test ratio are important to measurement of those parameters.
Quick ratio/ acid test ratio is mainly identifying the company’s ability settle their short term assets to cover the urgent liabilities of the company by avoiding the stocks of the company. The calculation of acid test ratio is (current assets-inventories) / current liabilities.
The company is calculating the efficiency ratios which support the company that at what way company is utilizing their assets and as well as managed their assets. The efficiency ratio is calculated on the basis of stock turnover period of the company and the assets turnover period.
The total period is taken by the company to convert their inventory into sales. If company is taking less numbers of days that is the best performance of the company. The calculation of the inventory turnover through (inventory/ cost of sales)*365 days.
According to the company’s assets turnover ratio it is describe that at what efficient way company is selling their assets and earned higher amount of revenue. The efficiency of the ratio is much better if it is coming higher in terms on calculation of company’s financial report. To calculate of assets turnover is equal to sale revenue divided by total assets.
When an organization wants to settle their monetary obligations and mandatory expenditure cash flow ratio is the tool to analysis the situation. For that cash flow adequacy and quality of profits are two ratios which measure the cash flow analysis of a company.
According to the research the small scale business having high opportunity to grow in the society and economy. There are some important business skills required to face the business challenges and the developed according to the future requirement (Kuriakose, 2013).
Conclusion
The research was organized the process which helps in developing a proper small scale business. In order to cart out this factor, the researcher has waved back to the different management, marketing models and financial methods to create a link with this particular company of research. The researcher has focused on developing of the marketing ethics and financial status to survive in the market. In SWOT analysis the researcher has shown how to develop the market orientation. Location, price of the product and organizational ethics are the chief attributes which leads to the significant organizational development. But on the other hand, the researcher has also projected the weaknesses as well. Weaknesses like competition with the other brands, a limited customer circle and others seem to be the main problems that company has to solve. As this small scale enterprise is completely going to be a new one in the market, threats are there that whether the customers the same time there will accept the product. At the same time there are opportunities as well. The demand of the company’s products among the customers may seem to be the respite to them and can be the final choice.
At the same time, the marketing model like marketing skills and strategies clearly discusses how far the organization can expect to attain more marketing attributes. The conditional attributes of the market place is also sophistically managed in this aspect. The researcher has focused how these approaches are quite convenient in the approaches to define the organizational benefits and conditional attributes. Performance management model applied in the literature review part is also seems to play a sophisticated role in order to develop the organizational ethics in the small scale industry. The researcher has mentioned the different ways available to them which helps in managing the strategically abilities for this business. In order to expand the business ethics proper marketing ethos is needed to be applied which may be able to create more generalness of the market place.
Reference
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