Small Business Assignment Example | Topics and Well Written Essays - 4500 words

Small Business - Assignment Example Because of the failure South African economy has lost more than R68 million over the period of 1997 to 2000. A study also in Canada shows that 68 % of small and medium enterprises with fewer than five employees, failed within five years. The reason for failure of businesses includes the following areas of concern: The above reason will be our focus in making the business plan for a period picture framing and small craft workshop for furniture. Creating a business plan is essential for small business to be able to develop a path for a strong business. Our business plan for picture and framing woodcraft furniture includes the capital, market selection and business and management skills. Our marketing report shows that since we are producing a furniture and picture frame at not so low price, therefore we are offering our furniture to those whose accept the fact that it is hard to produce a very low price furniture with quality. We are marketing our product to high and medium class people of Kent as well as throughout London. As described in our marketing report and analysis a proper strategy will be implemented to market the furniture. Working capital is important in starting a small business. From here you will be able to start your business by selecting materials which are cheaper but of quality. The company wants to develop a quality furniture for our customer but it has an inadequate working capital. This may cause a failure of the business if we were not able to manage the cash well. Small business failure can inevitably be related to poor or careless financial management (Berryman, 1983; Peacock, 1985). Businesses can increase their capital by looking for a material which would not cost them a lot, or by looking for a lending company with a low interest to be able to have enough capital for the business. The advantage of these actions is that it is beneficial to the company since they have an additional capital but it could be a disaster if they were not able to manage their capital well. Other encourages small businesses owner-managers to install and use accounting information systems (McMahon and Holmes, 1 991). Breen and Sciulli (2002) report that, in order to reduce the cost burden on small business, a number of mechanisms were put in place.. All of this was to encourage small business to utilize computerized technology. However to be able to use the computerized technology proper training and seminars should be conducted for employees. Chittenden and Bragg (1997) report that when a small business is suffering from late payment there is an increase in short-term bank borrowing, or delay in payments to creditors. When this occurs small business then has to over commit themselves which leads to the next two comments that "There is a definite down turn since GST. Money is very much tighter. In an arts and craft business experiencing very much reduced turnover" and "I spend a lot more time monitoring cash flow, with more work and less cash" sums up what the small business owner-manager is experiencing. Petzke and Murphy (2001) reported that the introduction of the GST and consequent rep orting requirements had put stress on marriages and 'ruined some small businesses with red