So many people want to open their own company or start a business, it is best advisable you start small and gradually it would grow into bigger businesses.First, you have to master how small businesses works by doing a critical planning. He who fails to plan, plans to fail.Planning has to do with shaping the future of the business or organisation. Planning encompasses the following;
- Setting of Organisational goals.
- Developing strategies to reach those goals.
- Determining the-resources needed
- Setting precise standards.
- The relative size of the business
- Sales Volume.
- Number of Employees
- Type of customers
- Asset size and capital requirement
WHY YOU SHOULD VENTURE INTO SMALL BUSINESS.
Small scale enterprises are generally advantageous for economic and social wellbeing of a Nation. Some reasons you should first try small scale.
- ENTERPRENEURSHIP DEVELOPMENT.
A small scale enterprise gives room for entrepreneurship development. Most small enterprises metamorphosed into medium and large scale enterprise.
- NON REQUIREMENT OF HIGH-LEVEL TECHNOLOGY.
In most large scale enterprises the cost of maintenance alone is enough for local entrepreneurs to commerce Business.
- IT REQUIRES LITTLE OR NO CAPITAL.
Small business is labour intensive. This enables local entrepreneurs to easily commence business with little or no capital. This requires creativity and innovation.
- JOB CREATION.
Involvement in small scale business enables Individuals to create Job for themselves and others, thereby reducing the level of unemployment.
- IT DOES NOT REQUIRE HEAVY INFRASTRUCTURE.
Infrastructures such as building, water and power supply are not highly needed.
CAUSES OF FAILURES OF SMALL BUSINESS
He who cannot manage a small business cannot manage a large scale business. These are some reasons businesses fail. VacaHumrichouse( 2008:162-163) stated some of the causes of small business failure.
- Plunging in without first testing the waters on a small scale.
- Under-pricing or Overpricing goods or services.
- Underestimating how much time it will take to build a market.
- Starting with too little capital
- Starting with too much capital and being careless in its use.
- Going into business with little or no experience and without first learning something about the industry or market.
- Borrowing money without planning just how and when to pay it back.
- Attempting to do too much business with little capital.
- Buying too much on credit
- Extending credit too freely
- Expanding credit too rapidly
- Failing to keep complete, accurate records.
- Carrying habits if Extravagance into the business
- Not understanding business cycles
- Forgetting about taxes, insurance and other cost of doing business.