StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Small Business Management Issues - Essay Example

Cite this document
Summary
Investment readiness is a factor of development preparation and quickening in Small and Medium Sized Enterprises (SMEs) and any failure to properly evaluate it leads to many SMEs failing to realize their prospects. The issue of finance is very crucial to any business organization no matter how much readiness they may assert to be and financial managers should be able to make decisions that are viable and can lead to achievement of set objectives.
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Small Business Management Issues
Read Text Preview

Extract of sample "Small Business Management Issues"

Download file to see previous pages

However, the growth of SMEs is mainly hindered by management practices that most SMEs are engaged in which are always found to be inefficient and effective thus reducing chances of getting access to working capital (Beijerse, 2000). The problem of investment readiness by SMEs can largely be attributed to lack of market information and commitment by financial managers to access various sources of finance. According to research, the universal understanding and consciousness of finance options by SMEs is considered to be poor and the major hurdle is poor investment readiness.

There are numerous factors that determine investment readiness in SMEs and these include the following: The major factor has always been business attitude to finance. In every SME, the concept of financial management is very crucial and financial managers have to treat it with seriousness. Financial managers therefore have to change their attitudes towards financing issues and proper accountability of financial activities should be a priority to most SMEs in order to be successful in their investments ventures.

The other determinant of investment readiness is the financial forecasting aspect of management in organizations. Forecasting of finance involves the financial managers predicting the future revenues of the organization using the current available financial information. The use of reliable forecasting techniques boosts the investment opportunities of SMEs because they will be able to know the amount of funds needed in the future to run the activities of the organization. With proper forecasting, the financial managers can get access to obtaining finance from financial institutions because they can borrow debt finance and can convince those financial institutions that they can repay the principal and interest without failure.

Also with financial forecasting SMEs can achieve their targets of revenues that will foster investment readiness (Sparrow, 1999).Other important determinants include the financial decisions that are made by the finance managers. There are four levels of decisions involved and these are; Financing decision, whereby the financial manager has an obligation of determining the best sources of funds suitable for a business. They are responsible for identifying cheap sources that will not strain the financial capability of the organization in terms of repayment if it is debt financing.

Investment decision, which involves the respective financial managers of SMEs identifying the viable investment opportunities. This will involve coming up with efficient frontiers of portfolios to be invested in. This means that the financial managers have to access the risks involved and the returns expected from a selected investment. Dividend decision, whereby financial managers identify good dividend policies applicable in the SMEs. For example, if shareholders are entitled to both preference and ordinary shares then investors' confidence are built in them and thus the success of the organization.

Financial decision is the liquidity decision. How firm manages its finances is very crucial to stakeholders including financial institu

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Small Business Management Issues Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1507405-small-business-management-issues
(Small Business Management Issues Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/miscellaneous/1507405-small-business-management-issues.
“Small Business Management Issues Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/miscellaneous/1507405-small-business-management-issues.
  • Cited: 1 times

CHECK THESE SAMPLES OF Small Business Management Issues

Development of Small Businesses in Saudi Arabia

As to innovativeness as a factor in itself, Masurel, et al (2003), Nijkamp (2000) found that the element of leadership fosters creativity in the management of SMEs are determinative of innovative behaviour.... RESEARCH PROPOSAL Working Title: business Development of Small and Medium Scale Businesses in Saudi Arabia Research Topic For its research topic, this paper will seek to answer the question: What are the potential drivers of successful business development of small and medium scale enterprises in Saudi Arabia?...
7 Pages (1750 words) Dissertation

Small Business Management

small business management Name: Course: College: Tutor: Date: Introduction Tyson and Schell (2011, p.... There are few studies that have been on done exploring the relationship between the theory and small business management and the management behaviours of these businesses.... and examining the various aspects of the firm and relating them to the existing theories and literature on small business management.... 16) defined a small business as any business venture that has a 10 or less employees....
13 Pages (3250 words) Essay

HR Management in the Small Business

Although there have been a lot of studies made on the area of HR management and others of small business management, none or very little has been done to link this two concepts, hence, the need for this study.... As a result, small business is forced to employ the outdated method of decision making which can be inefficient in our current era.... Another reason that makes small business not to use such technologies is that they do not prioritize the management of human resources....
5 Pages (1250 words) Essay

Strategy Management in Small Export Business of China

issertation would include the components of the various small business firms of China, their analysis from the strategic perspective, framing research questions for the survey, conducting a survey based on the industry, evaluating the findings obtained from the survey, drawing the conclusion and suggesting appropriate recommendations for the issues faced by the industry.... Additionally the study aims at investigating the significance of internal and external business forces for small export enterprise in southeastern parts of china, and will inevitably aim at analyzing these small business's successes and failure from the strategic management standpoint during the time period 1980 to 2012....
58 Pages (14500 words) Dissertation

Small Business Enterprise

The paper "small business Enterprise" discusses that short term and long term business planning should consider not only the direct decisions necessary such as geographic location, financing and staffing, but also the degree of autonomy of each business unit.... Moreover, the managers have experience in the industry, while a lack of experience is one of the top reasons for small business failure (Holmes, S.... hellip; Problems with finding highly skilled personnel for the business are common when a business is expanding....
7 Pages (1750 words) Case Study

Issues in Small Business Management

The assignment "Issues in small business management" analyzes important contributions to small business sector including various publications highlighting factors that should be taken into account while establishing small businesses.... hellip; The Office of small business provides a focussed approach towards development of small business policies within the Australian government.... he office has assisted in development of various publications for small business sector in the country with an objective to review current state, measure growth trend, identify problems and subsequently act upon the weak areas in small business sector....
8 Pages (2000 words) Assignment

Strategic management of small firms

mall firms have been long neglected over the strategic management roles and issues.... In contrast the literature developed in the context of small firms' strategic management is rather limited.... Most of the literature that exists in… ategic management in small firms pertains to business planning approach within such companies rather than on the study of management processes and the development of strategic management within smaller entities (Mazzarol, 2004). ...
12 Pages (3000 words) Research Proposal

Managing a Small Business

This paper deals with the various aspects of small businesses and their management, and specifically enlarges upon one of the important management issues that bedevil the small businesses viz.... High competence in management, particularly marketing, helped EEL to thrive and grow from strength to strength, even while retaining its primary character as a small-scale enterprise.... business failure.... All aspects of business failures and turn around strategies are dealt with....
16 Pages (4000 words) Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us