What are the different Components of Small Business?
“Small businesses can be said to have certain special features, which may or may not coincide with the characteristics of big companies.”
Small businesses and industries differ from big ventures in the size and scope of things. They can be said to have certain special features, which may or may not coincide with the characteristics of big companies.
Financial factors : Finance is indispensable to any business. It is required right from its inception and extends up to its expansion and diversification. Two types of finances are basically required by a business, namely Fixed Capital and Working Capital.
Fixed capital relates to those assets that are permanent in nature. Working capital is required to keep alive the daily requirements of any business. A small businessman may derive this capital totally from his personal income or may make use of borrowing agencies.
Risk Factors : As is common knowledge, the demand for products goes a long way in determining the size of your business. This becomes all the more important for small businesses, where a major fluctuation may mar the status of your business forever.
So, your strategies and plans should aim at preparing about such unforeseen circumstances beforehand only. Not only this, your business should be able to regulate its manufacturing, sales etc. according to change in circumstances.
Marketing Factors : Marketing has become indispensable for every kind and level of business. For a small business it’s utmost necessary to formulate only those marketing strategies that cater to local needs.
If you try to ape big multinationals and come up with such marketing material as is not in tune with the psyche of your localities, you are almost sure to fail miserably on this account.
Administrative Factors : The administration of a small business must be in constant touch with the needs and problems of the human resources. This factor gains tremendous importance in a small business because mostly all the personnel are locally employed and any rift with them is sure to ruin the image of your business in the whole area.
Furthermore, such personnel are also more prone to leaving your business in case of poor administration because all of them have local residences and can find a job easily elsewhere. They don’t have the fear of relocating in case they quit their job.
Author - DeeKay
Tags - Finance, Economy
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