Small Business Management - Term Paper Example

 Contents Introduction 2 Owner’s Background & Human Capital 2 Owner’s Management Style 5 Business Operations & Management 7 Shnuggle’s Business Objectives & Their Achievement 8 Recommendations 10 References 11 Introduction In today’s competitive global market, many entrepreneurs and small business owners are emerging, giving a new trend of heterogeneous market where earlier industry was dominated by corporate giants. Due to recession and increasing will to have self-sustained business which can provide recognition, we see new businesses entering into market every day. Google, Microsoft, Apple; they all are result of a new idea and risk-taking approach. All of these businesses started initially at a small scale and went up to the heights where they are right now. In order to analyze how small businesses are highly influenced by the personality, background, expertise and management approach of its owners, the selected company for small business analysis is Shnuggle Ltd which specializes in manufacturing of handmade Moses baby baskets. Although this venture is headed by a couple with the name Adam and Sinead Murphy but Adam is the only registered director of this company and is therefore considered as the owner of the business for this case study. Owner’s Background & Human Capital In order to examine the profile of this company and its owner, mainly web-based sources are used. The owner of Shnuggle Ltd. is Adam Murphy who has a celebrated career profile in product development. According to his Linkedin profile, he is Bachelors in Engineering from University of Hertfordshire, with over ten years experience in this field. The given portfolio defines that he has a suitable human capital (Davidsson and Honig, 2003). Shnuggle was launched in 2010. Adam has been working with various other companies like Sportstada, Kingspan and Infalfa Roof systems since 2003 (Linked, 2013). His rich experience allows him to be well-versed with project management, product development and supply chain management techniques. According to Burns (2011), personal characteristics of an individual along with their family background and the conditions play vital role in providing direction to the business. There was a little information available regarding his ethnicity and family background. However after considering his education, professional profile and personal life, he appears to be based in Northern Ireland with his education completed in the same region. The business has been operating from Newtownards, Ireland and has recently expanded to three other countries (Houston, 2013). Adam Murphy is married with two children and the idea of this business has emerged from his family background (Shnuggle, 2013). Being the bread earner of the family, his focus appears to be on expanding his business across the border. For this purpose, he has made several strategic alliances that will be discussed later. Currently, the company appears to be private limited with Adam playing the role of entrepreneur and business manager. Shnuggle does not have its own manufacturing facility. This is precisely the reason why company only shows one permanent director on its portfolio and no employees. Perhaps, there are agents supporting Shnuggle’s e-business or carrying out office operations however the online profile only reflect Adam being the sole controller of the company with Sinead being visible only on news channels and company website. The product offered by Shnuggle is known as Moses Baby Basket (Shnuggle, 2013). It was the idea of Adam’s wife Sinead Murphy who also appears to be supporting his husband in this business. Through research, it was found that this new baby basket is comparatively stronger and quieter while being made of child-safe hypoallergenic material instead of regular wicker (Houston, 2013). It was also found that Adam and Sinead have added baby bath tub and other products into the product catalogue. However, only Baby basket and bath tub are available on the web-based stores and Shnuggle’s website. Following notions presented by Burns (2011), it can be seen that Adam used his personal expertise and creativity under the subjection of situational factors and presented a product which was a better option in an already saturated market. As far as antecedents influences are concerned, his education, prior experience and family support appear to be more dominant factors than gender and ethnicity. A detailed analysis indicated that his family background has greatly affected his operational strategy while running Shnuggle Ltd. Adam and his wife have focused more on producing a product that would appeal to greater masses despite having other alternatives. This phenomenon is concurrent to boundary creation according to BRIE model (Katz and Green, 2011). In order to strengthen their presence in market, they have appeared on various forums and have won quite a few awards. Furthermore, they have averted major business risks by creating external financial resources instead of using their own capital. Some of these resources include crowd funding and private investors like NI-UK (Insider, 2013; Invest NI, 2013; Neondrum, 2012). Their resource development technique appears suitable for a small-scale business. Furthermore, in order to avoid heavy costs in setting up a lengthy retail channel, they have introduced most of their products on online retail stores Amazon, Alibaba etc. Prior experience of Adam has allowed him to be able to use social media, print and TV, and supply chain to introduce their product without incurring much expenditure. It also appears that Shnuggle perform limited manufacturing instead of batch production to ensure that operational, manufacturing and storage costs remain limited. It can be said that being a family man with high professional education and a decent career, Adam Murphy is able to capitalize on his strengths and use the resources generated for further business expansion. Although the vision of this product was shared by his family however it was his expertise and will to take risk that resulted in Shnuggle (Katz and Green, 2011). His human capital is based on his prior experience in the capacity of product development along with desire of improving existing product with saturated market by introducing better features into it (Carter and Jones-Evans, 2006). As far as the role of gender-based influence on the operations of Shnuggle is concerned, the visionary appears to Adam’s wife Sinead Murphy. Owner’s Management Style In order to assess if personality of Adam Murphy conforms to entrepreneurial stereotyping, it is important to examine existing theories regarding entrepreneurship. According to Byrgave and Hofer (1991, p. 14), “The Entrepreneurial Process involves all the functions, activities, and actions associated with the perceiving of opportunities and the creation of organisations to pursue them”. Furthermore, Carter and Jones-Evans (2006) assert that an entrepreneur is expected to be risk taking, achievement-oriented, having high internal locus of control, over-optimistic and having desire for autonomy. Exploratory views of these theoretical concepts indicate that an entrepreneur is expected to display creativity, innovation and will to take risk in every aspect of business management. Therefore, it is not just the product but the mechanism of carrying out business that should have new approach (Blaugh, 2006; Buchanan and Vanberg, 1991). Where existing theories regarding entrepreneurship put excessive pressure on just the creative side of business, the financial aspect of the business remained unexplored. A renowned innovative theory of entrepreneurship also presents the same notion when Schumpter treated innovation t be the fundamental criteria for entrepreneurship without considering the prospect for opportunities (Hagedoorn, 1996; Becker and Knudsen, 2003; Becker et al., 2006). On the other hand, Shane and Ulrich (2004, p. 138) also explore the role of product development, technological innovation and economic stability while assessing entrepreneurship. If the attention is diverted from the definition of entrepreneurship to small business owner’s definition, perhaps we can have a better perspective of Adam’s profile. According to Carland et al (1984), “A small business owner is an individual who establishes and manages a business for the principle purpose of furthering personal goals. The business must be the primary source of income and will consume the majority of one’s time and resources. The owner perceives the business as an extension of his or her personality, intricately bound with family needs and desires”. It has been established earlier that motivation, education, age and family history have a higher influence on entrepreneurial behavior than gender and ethnicity. On the other hand, small business owners have a desire to be autonomous where they are perceived as having limited managerial and social skills and reluctance to expand beyond a certain size. After having developed a thorough knowledge of entrepreneurs and small business owners, it can be said that Adam uses an amalgam of entrepreneurial and small-business owner’s approach with more dominance of entrepreneurship. It can be seen that he was driven by the ideas presented by his family whereas he is still supported by his wife in business management (high family influence). Secondly, he is well-supported by his education and experience. Through his ten-years experience, he was able to grasp the idea presented by his wife, select suitable replacement material of a traditional baby carrier and present a suitable substitute that was not only comfortable to be carried but its hypoallergenic material was easy to be cleaned and washed unlike other traditional baby baskets. Innovation, education and experience became his strength. Thirdly, he does not appear to be risk-averted which can be seen by the manner in which he has gathered financial capital and also ventured into foreign markets with various strategic alliances (Ebner, 2006). Currently, Shnuggle is being run on the capital raised through crowd investment and financial assistance provided by Invest North Ireland Inc along with monetary benefits coming with several awards won over past two years by the couple (Neondrum., 2012; Houston, 2013). By expanding operations all across Britain, Europe, Greece, Japan and Spain after beginning with Ireland, the founders appear to be opportunist and optimistic. Shnuggle is also adding more products to its portfolio which shows the willingness of its owners to further expand their innovative venture. If examined on the criteria of business-owner’s definition shared by Carland et al (1984), the business appears to provide self-efficacy to its owners along with being an extension of their personality and primary source of income. However, lack of willingness to take risk and limit business’s size to a limited extent does not seems to be present in founders of Shnuggle which makes them more of an entrepreneur than a traditional small-business owner. Business Operations & Management With the help of data gathered on web regarding their business management, it was found that Adam and Sinead Murphy have been carrying out their operations through e-business technology. No details regarding registered office was found therefore it can be assumed that they are using virtual office technique to continue their business through web-based sources. As far as manufacturing is concerned, like stated earlier, it is either outsourced or performed in-house with no manufacturing facility owned by this couple. A critical analysis of the marketing strategy of Shnuggle shows a tactful selection of media where Shnuggle should appear. The website is well-designed keeping the niche market targeted by providing complete specification of the product line and also facility of ordering products directly from there (Shnuggle, 2013). In addition to that, similar facility is available on facebook and twitter as social media is becoming an increasingly preferred medium for small businesses. Positive customers’ reviews and news articles regarding affiliations of Shnuggle with various associations and awards won over time give a positive outlook to the company on web (Houston, 2013; Linkedin, 2013). The couple has also introduced this venture on online retail stores like Amazon to allow maximum customer base to access them in the absence of any physical facility. Lack of any details about work force gives an outlook that all the managerial and operational activities are undertaken by the owners. Shnuggle’s Business Objectives & Their Achievement On company’s website, no mission, vision or visible objectives have been mentioned however there are several aspects of marketing that helped in identifying their business objectives. While browsing details about the background of the business, it was found that Moses baby basket is patented under the couple’s name and it is a handmade basket with all the orders made only after receiving payment (Shnuggle, 2013). It was also found that the couple does not make this product for any other business. Analyzing this business model, it can be deduced that Shnuggle has three main objectives. Firstly, it is focused on market of baby products and is intending to make products that are baby-friendly, economic and convenient. Same is reflected by the use of hypoallergenic material that is soft, washable and does not produce any sound like other traditional cribs and baby carriers while making Moses Baby Basket (Shnuggle, 2013). Secondly, the owners are intending to expand their business operations by becoming a global brand which is focused on delivering quality while staying in the market of baby products. This notion can be supported by their baby-friendly product range and their presence on e-retail stores along with products being exported into different countries. Third objective of Shnuggle is to follow a regime of cost-effectiveness. It is evident that the couple is incurring limited financial liability with little personal capital invested in the business. Also, orders are processed only after receiving prior payments. Once the order is received, it is manufactured and dispatched in a limited timeframe i.e. 5 days. The practice helps in limiting their expenses incurred in terms of storage of the product. It is written on their website that they manufacture it by hand and nothing is mentioned about the workforce involved. Therefore, it can be said that they are also making considerable savings on the labour costs as well by manufacturing it themselves. Fourth objective of their business model appears to keep the operations under control and within the family. It can be seen that there is no involvement of external entities or major investors on the business operations. All the order taking, outsourcing, purchase and product innovation decisions, rest with the couple only. Despite being determined to expand globally, they are not willing to run on exponential rate. They are taking up an approach of cautious development which does not involve major risk taking. The brand name has been established and is well-respected. Their business expansion approach seems to focus more on creating a quality product portfolio. Investment from North NI shows their dedication towards research and development. A careful analysis of business objectives of Shnuggle helps in understanding that their business model complies well with the goals that they have set for themselves and their future plans regarding business expansion are also supported by this approach. Recommendations Exploring the business operations of Shnuggle Ltd, helps in understanding that small scale business should focus on operational efficiency and a careful business expansion. Although Shnuggle is doing fairly well on its own as a small business however they need to follow a carefully selected approach in order to expand in future. Firstly, a controlled business expansion should be the prime focus of their product. They need to have a statistical data regarding their niche market so that market can be explored accordingly. Secondly, while venturing into new markets, cultural competence is also important. Perhaps, this knowledge of regional cultures can help them make customized product line. Thirdly, small scale advertising and marketing on social media and minor billboards can help them acquire more orders. Only after incoming of order increases, they may want to make limited additions in their manufacturing facility. However, prime focus should remain on quality as this is the only factor giving them a competitive advantage. Assuming that Adam is also part of the manufacturing, it is important that they should have another skilled worker onboard so that Adam focuses on research and product development for which various investments have been received. References Amazon-Uk., 2013. 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