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

Whats Holding Back Small Businesses - Article Example

Comments (0) Cite this document
This essay discusses that the global inflation trends have led to the closure of many businesses, increased interest rates for loans and heightened retrenchment of employees. Businesses have opted to cut down their operational costs in order to maximize profits and remain in business…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.9% of users find it useful
Whats Holding Back Small Businesses
Read TextPreview

Extract of sample "Whats Holding Back Small Businesses"

What’s holding back Small Businesses?
The global inflation trends have led to the closure of many businesses, increased interest rates for loans and heightened retrenchment of employees. Businesses have opted to cutting down their operational costs in order to maximize profits and remain in business. The global recession has led to the loss of profits for most of the businesses, low dividend earnings for the shareholders, lack of confidence of the management by the investors and subsequent dismissal of the entire management team. The dismissal and retrenchment of management teams and employees is aimed at ensuring that businesses continue to run and profits levels are maintained. The hardest hit are small businesses due to small capital base as they are not able to invest in big research projects to propel the business entity forward and continue to maintain their market share or better still increase the market share (Shleifer, 2004).
The major challenge according to the article is not related to overregulation or taxation but low demand for business products. Over thirty percent of American small businesses attributed their underperformance mainly to poor sales. However, the research carried out by the National Federation of Independent Business also attributed the under performance to competition from large businesses, financing and interest rates, insurance cost and availability, red tape, government requirements, cost of labor and quality of labor among others. All these factors are mostly attributed to the global inflation facing the world economy.
Debate in the recent past on how to improve growth of small businesses and encouraging hiring has concentrated on transforming the tax picture to be more business friendly. However from the research, small businesses attribute underperformance to other factors other than taxes. Only a small percentage, about 17-22%, of the businesses attribute underperformance to amount of taxes paid to the government. Though the government has imposed hefty taxes on the businesses, the amount paid to the authority as tax has little impacts on the performance of the businesses. Businesses are just tax collection agencies to the government as the amount of money collected from the client is that which is paid as tax. Businesses transfer the tax burden to their clients and thus businesses do not pay taxes but collect tax from their clients on behalf of and later submit their collections to the government.
The other factor holding down small businesses is the accessibility of loans to stimulate growth in operations. In regard to the borrowing of funds and loans, the financial and interest rates have negligible impacts on the success and performance of businesses. Though businesses may pay high interest rates for loans acquired, an increase in demand of the produced goods and services will suppress the impacts of the high interest rates. An increase in demand of goods and the subsequent increase of sales will turn the business to highly performing business entity. Research shows that the percentage of companies attributing underperformance to sales volume has doubled and that attributing underperformance to taxes have remained constant.
In conclusion, we can attribute underperformance of companies to the sales volume. high sales volume is a good indication of the amount of money received which is directly proportional to the level of profits realized. However, addressing soft demands of goods and services is contentious and complicated when compared to the supply side policies like giving interest free loans and cutting down on taxes.
Shleifer, A. (2004), "Does Competition Destroy Ethical Behavior?" American Economic Review, 94(2): 414–418. Read More
Cite this document
  • APA
  • MLA
(“Whats Holding Back Small Businesses Article Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved de
(Whats Holding Back Small Businesses Article Example | Topics and Well Written Essays - 500 Words)
“Whats Holding Back Small Businesses Article Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Whats Holding Back Small Businesses

Small Businesses

... business (Katz and Green, 2009, p. 357). As Mariotti (2007, p. 90) detailed, how important is the market to a business, the same importance does the location holds to a small scale business. Technology As almost all the business activities in today’s contexts are largely influenced by modern technology, an entrepreneur who plans to start a small business has to take technology in to account. Traxler (2002) described that information technology such as mobile and internet communication play dominant roles in today’s business arena and a new business entering to the market therefore would certainly require implementing the type of technology that it requires for its operation. Dosi, Teece and Chytryn (2007, p. 3) argued that technology...
13 Pages(3250 words)Essay

Growth strategies in small businesses

...? Running Head: GROWTH STRATEGIES IN SMALL BUSINESSES Growth Strategies in Small Businesses of the of the Growth Strategies in Small Businesses Introduction Over the past decades, the rapid developments of the Internet and the information technologies have profoundly impacted every aspect of organisational and social activities. Many business organisations, including small and medium- sized enterprises (SMEs), have started to adopt business process digitalisation (hereafter "BPD") as a strategy to grow and to gain market and operational efficiency (Johnston, Wade & McClean, 2007, 360). Business process digitalisation, in this study, is defined as an enterprise-wide information system based on the technological foundation of the Internet...
1 Pages(250 words)Dissertation

Small Businesses are Entrepreneurship

The paper presents arguments in favor of this statement and attempts to explore various dimensions of this statement. Discussion To define, “entrepreneurship is the capacity and willingness to undertake conception, organization, and management of a productive venture with all attendant risks, while seeking profit as a reward” (Hatten, pp. 148-149, 2011). A glance at all other definitions of entrepreneurship will verify the fact that entrepreneurship, entrepreneur of entrepreneurial spirit is seen in line, primarily, with the elements of innovation and risk taking. Without any doubts, large sized companies and organizations create mechanisms and systems to diversify and decrease their risk over the period (Hatten, pp. 148-149, 201...
8 Pages(2000 words)Essay

Information Security Small Businesses

...? Information Security for Small Businesses Information Security The advancement in the field of computers has carried mankind to another level. All fields of life have been revolutionized with its advent and have changed its mode of operations, for example, acquisition of education has been made easier with the emergence of virtual learning platforms; organizations have improved their business procedures with information management systems etc. Information systems manage information in such a way that all business processes can be executed in an effective and efficient manner. Information and data might be related to the business processes of any organization or the buying trends of customers; such information has acquired significant...
4 Pages(1000 words)Research Paper

Cost Allocation in Small Businesses

...? COST ALLOCATION IN SMALL BUSINESSES goes here] [Your goes here] [Your college Cost Allocation in Small Businesses Cost allocation is basically a process in which costs of services are identified and assigned to operate any particular business activity. An important point regarding cost allocation is that it is more concerned with the allocation of costs to the right department or unit of an organization instead of being concerned about the actual cost that may incur. It is due to this reason that cost allocation is viewed as a process that helps managers in tracking the actual costs or expenses related to all ongoing operations efficiently and successfully (Tatum, n.d.). Cost allocation through a proper accounting system is considered...
4 Pages(1000 words)Research Paper

How globalization affect small businesses

... How Globalization Affect Small Businesses? Introduction Globalization can be described as a process through which organizations or businesses are influenced by foreign businesses, ideas or organizations and they make changes to start operating in an international standard. A small business is a business that is privately owned and has a small number of employees. Globally, globalization ahs affected the operation of many small businesses as they have made the m to change their operations and venture into markets (Go?gl, Hans-Joachim & Clemens 67). This paper examines how globalization affects small businesses. Background of Globalization Globalization can be defined as a process of moving goods, people and ideas due to the increased...
5 Pages(1250 words)Essay

Business Economics: Small and Medium

The entry of small firms into the global markets has proven to be the main aspect of the creation of economies of scale. Markets are fast evolving to the needs of varied tastes and customer preferences, so necessary knowledge and technology asset has a major role to play for small firms to rise and to match up to the situation. However, small firms are characterized by “smallness of the market share (a large number of similar-sized firms) and hence lack of individual market power, corresponding to the theoretical concept of Pure Competition.” (Waite 1973. P. 154).

They need to overcome the handicap of smallness by strategic alliances and mergers with larger or technically more competent entities. Small firms...
10 Pages(2500 words)Assignment

Analysis of All Changes Great or Small Exploring Approaches to Change and Its Leadership Article by Higgs and Rowland

The change referred to in this context includes a broad array of topics. From an individual perspective, the change may be a new behavior. From a business perspective, the change may be a new business process and/or new technology. From a societal perspective, the change may be a new public policy or the passing of new legislation. Successful change, however, requires more than a new process, technology or public policy. Successful change may require the engagement and participation of the people involved. Change management provides a framework for managing the people side of these changes. The most recent research points to a combination of organizational change management tools and individual change management models for effecti...
13 Pages(3250 words)Article

Feasibility of Implementing Business Process Reengineering in Saudi Arabias Small and Medium Enterprises

..., SMEs should be considered as a major factor will affect Saudi Arabia’s economic development. SMEs do not only provide the local people with employment opportunities; these small enterprises also play an important role in business diversification. By strengthening the use of information and communication technology (ICT), Saudi Arabia’s small and medium enterprises (SMEs) will have the competitive edge to compete in the global market. It is possible to strengthen the ICT platform in Saudi Arabia. However, the survey research findings on Saudi Arabia’s SMEs (presented at the Business Forum at the Riyadh Chamber of Commerce and Industry back in October 2003) reveal that the most important constraints in the development of ICT platform...
9 Pages(2250 words)Research Proposal

A Small Sports Car as an Investment

The purpose of this report is to determine the “best bang for the buck” if a consumer was looking to purchase a small sports car. A car purchase should be treated as an investment, even though we know that spending money on a vehicle with the high gasoline prices and insurance premiums is probably the worst type of investment money can buy. Therefore, the ultimate purpose is to guide this expenditure in reaping the maximum benefits available.
I will be researching on 2006 2-seated vehicles in the price range of $30,000 - $50,000 in today’s market. The idea is to keep it within the price range mentioned above, so more expensive cars such as Benz CLK and lower-end vehicles such as Honda Civics are not included...
12 Pages(3000 words)Research Paper

Audit Michelmersh Brick Holding Plc

Audit risk should be estimated to a low level that will provide sufficient evidential material to obtain reasonable assurance in order to issue an opinion on financial statements.
Michelmerish Brick Holding Plc’s (MBHP) business consists of the production of clay products, landfill operations, and development of land. The operational profits in 2007 increased matching with the rise in revenue when compared to the performance with 2006. Under such a scenario of hugely increased operational activities, the acceptable low level of audit risk is a matter that may be determined by evaluating the auditor’s reliance on the extent and efficacy of internal controls in operation with MBHP. Besides the assessment of the acce...
7 Pages(1750 words)Assignment

The Management, Leadership and Teamwork Competencies Required by a Small Business Owner

On the other hand organizational leadership is defined as the ability based on the specific skill of an individual to lead his/her subordinates in a manner that pre-planned organizational goals could be achieved within the defined time-frame.

According to Burns (1978) and Bass (1985), transformational leadership has a set of category constructs such as values, morals, farsightedness, long term goals, principles, acute awareness about the dividing line between causes and symptoms, mission statements, strategic perspectives, and human resources. Similarly, they identify a set of category constructs in the transactional leadership also. For instance concentration on the task at hand, short term goals and tactics, confusion co...
6 Pages(1500 words)Coursework

The Main Threat to Small Business

When it comes to reliability factor big businesses are able to sustain because of their track record. Big businesses are able to pacify their customers using their past successful track records.
Nowadays most of the business opportunities and orders are posted online. This means that business providers need to be well integrated with supplier systems through online facilities. The infrastructure of the business model needs to be updated. But this is not an easy task for small businesses. E-based procurement is possible only with a well-maintained network on the internet. This requires a lot of financial and technical necessities which could not be supported by small businesses. On the other hand, Big businesses are well equip...
8 Pages(2000 words)Assignment

Effects of Big Businesses on Small Businesses

The supercenters like Wal-Mart are recorded to have dropped the share of small businesses in almost all areas where they are operating (Stone, Artz, & Myle, pp.12 & 13).
It is a datum of experience that the major attribute of power bearing body is its transcendence in development as compared to its contemporaries. The same goes for the world of business too. According to the studies of Jane L. Parpart, Shirin M. Rai and Kathleen Staudt in ‘Rethinking empowerment, gender, and development’, the term ‘power’ has often been used as an alternative for the developmental approaches. Stated differently, the concept of power cannot be separated from development. According to Keith Rankin in ‘Globa...
6 Pages(1500 words)Essay

Small Businesses

...Small businesses: Annotated Bibliography Books Bridge, Simon, Ken O’Neill, and Stan Cromie. Understanding enterprise, entrepreneurship and small business. New York: Palgrave Macmillan, 2008. Description/Summary: The authors of this book cover small businesses broadly from the perspective of enterprising and entrepreneurship. The authors also assert that the often creators of jobs are the small businesses compared to big businesses, and people wishing to encourage as well as promote creation of more jobs have keen interest in small businesses. They also link the formation and development of small businesses to entrepreneurship which is an essential sub-set of enterprise for many people. Evaluation/Assessment: Despite this book being...
9 Pages(2250 words)Literature review

The Role of Smart Guns in Handling Illicit Small Arms and Light Weapons Trafficking in Nigeria

There are those who obtain them without the knowledge of the top authorities. As such, there has been an increased rate of gun trafficking in most of the West African countries that include Nigeria. Such cases have been surrounded by a number of serious issues that include kidnapping and the killings of large masses of people. Because of this, it can always be assumed that the issue of smart guns is a disruptive element to the lives of individuals. However, in West Africa, the idea of smart guns has been understood to be a significant contribution to the handling of illicit small arms and light weapons (SALW). This action is taken alongside the treaties that have been developed in relation to the international arms trades. It is m...
17 Pages(4250 words)Research Proposal

Sustainability in UK Businesses

Theories and studies have developed this concept by focusing specifically on environmental issues. These environmental issues will address the human, social and economic conditions because they are integral to sustainability. In addition, these environmental issues will affect directly the operations and practices of business stakeholders. It is obvious many critics will argue that sustainability is not the role of business. However, a business will fail if its operators will ignore changing consumer preferences and they stick to the past and traditional concept of business. In fact, a study by Sadowski concluded that sustainability in business would be a competitive advantage to the business (Sadowski, 2014).

The paper...
9 Pages(2250 words)Research Proposal
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.

Let us find you another Article on topic Whats Holding Back Small Businesses for FREE!

Contact Us