Issues in Small Business Management - Assignment Example

Question The Office of Small Business provides a focussed approach towards development of small business policies within the Australian government. It is also tasked with developing and maintaining links with small business sector (Australian Government Department of Industry, Tourism and Resources, 2007). The 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. The ultimate aim is to help small businesses to prosper and grow. Some of the initiatives taken by Australian government for small business growth include market study and identification of business opportunities in Australian markets for small entrepreneurs. This report emphasizes the importance of home based businesses in Australia that take up almost 67 percent of total small businesses in the country (Commonwealth of Australia, 2004). Many potential opportunities to start home based businesses in Australia have been provided to small business entrepreneurs in this document. Annual Review of Small Business series is another effort to provide comprehensive review of small business sector in Australia and develop a future outlook based on current performance. This report is published annually by the Department of Industry, Trade and Resources to facilitate small business development and growth. It provides case studies of small business organisations and also contains results of surveys conducted for small businesses across Australia. Other important contributions to small business sector include publications highlighting factors that should be taken into account while establishing small businesses; the areas where government support can be sought; best practices and guidance for small business managers to develop business plans; taxation structure; and other similar information that are usually required by all small business owners before starting on a new business and then to maintain a steady business growth. In short, the website provides a load of information targeted towards resolving all queries of small business sector companies. Another website where a variety of information is available is http://www.business.gov.au. References Commonwealth of Australia. (2004). Home Based Business - Local Opportunities [Online]. Available from: [Accessed August 20, 2007]. Department of Industry, Tourism and Resources. (2007). Office of Small Business - What we Do [Online]. Available from: [Accessed August 20, 2007]. Question 2. The Federal Privacy Act of 1988 was enacted to protect personal information of an individual from public disclosure without his/her approval. Effective from 21st December 2002, some small businesses including non-profit and unincorporated associations are required to comply with the Privacy Act (Federal Privacy Commissioner, n.d.). As per the information provided by the Office of Federal Privacy Commissioner, "any small business that: 1. trades in personal information; or 2. is related to a larger business; or 3. provides health service and holds health records; or 4. is a contractor that provides services under a Commonwealth contract" has to comply with Privacy Act of 1988. The Act requires small businesses to do the following key activities in order to ensure privacy of information: To inform people as and when their personal information is to be collected and its intended purpose. To ensure that the personal information is used only for the stated purpose it was collected for; or the consent from relative person has been obtained to use it for other purposes as well. To "pass on personal information only for the reason you collected it, or in ways people would think reasonable, unless you have consent or the disclosure is authorised by another law" (Federal Privacy Commissioner, n.d.). To openly inform people about the information that has been collected about them from all sources. To ensure security, privacy and integrity of personal information. Although, it is a good practice to get complied with the Privacy Act, however some small businesses are exempt from this Act. These include businesses with an annual turnover of less than $3 million unless one of the above four conditions apply to that particular business (Department of Employment, Workplace Relations, and Small Business, 2001). References Department of Employment, Workplace Relations, and Small Business. (2001). Is your Small Business Exempt [Online]. Available from: [Accessed August 21, 2007]. Office of the Federal Privacy Commissioner. (n.d.) A Snapshpt of the Privacy Act for Small Business [Online]. Available from: [Accessed August 21, 2007]. Question 3(a). The exponential growth rate of the small and medium enterprises in Australia has provided an attractive market for software companies to develop software applications specifically targeting the small scale companies and organisations. A comparison of few of these is given below: IDC Small Business CRM and ERM Systems Though it seems that a small business does not require a customer relationship management or an enterprise resource management system; however, these are critical for smooth functioning of small enterprise and to ensure that details about all organisation functions and customers are available in a readily fashion. IDC has developed ERP and CRM specifically designed for small and medium business sector in Australia. These software products provide storage, retrieval, organisation, trend analysis, financial management, customer service and many other features that are essential to ensure that each dollar is spent towards maximisation of goodwill and/ or profit. These software applications are low budget and provide an almost replica of features present in a benchmark CRM or ERM package. The company also provides support in case of queries and problems encountered during software usage (IDC, 2007). NetSuite Real Time CRM and ERP NetSuite Small Business provides real time inventory management, real time financial management and real time customer relationship management for small business sector (NetSuite Australia, 2007).The software operates through a web interface and provides all the essential CRM features and adds to it with the real time touch. This allows the business management to see a holistic view of the entire customer base and perform a variety of operations and computations on this data. MYOB BusinessBasics Small Business Management Software The BusinessBasics software is intended for the home based business category of small businesses where the business owner has limited time to manage his/her funds, income, revenue and resources (MYOB, 2007). The MYOB BusinessBasics software provides basic features like invoice generation, record and book keeping and tracking etc. References IDC. (2007). Australia and New Zealand CRM Applications in the SMB Market [Online]. Available from: < http://www.idc.com/getdoc.jspcontainerId=IDC_P10351> [Accessed August 22, 2007]. MYOB. (2007). MYOB BusinessBasics - Overview [Online]. Available from: [Accessed August 22, 2007]. NetSuite Australia. (2007). NetSuite Small Business [Online]. Available from: < http://www.netreturn.com.au/products/business_software/small_business_software.html> [Accessed August 23, 2007]. Question 3(b). As stated by Deputy Prime Minister and Minister of Trade for Australia, "Small businesses play a major role in many APEC (Asia Pacific Economic Cooperation) economies. They make up more than 98 percent of the region's enterprises, 60 percent of private sector employment and 30 percent of direct exports - some US$930 billion in 2000" (Vaile, 2002). This shows the importance of small businesses in foreign trade. The department of Foreign Affairs and Trade is committed to increase foreign trade from all around the world. With this objective, it provides key information to all businesses including small and medium enterprises that can be used by Australian small business operators to enhance global exports by Australia. In a comprehensive report entitled 'Small Business and Trade in APEC' published in May 2002 through joint effort of Australia and Mexico; an account is provided of the state of small business trade in APEC countries. This also provides six case studies of successful small business in APEC countries with an aim to provide guidance and inspirations to other small entrepreneurs in the region. Other information provided on the Department of Foreign Affairs and Trade website for small business operators deals with informing them about trade policy, potential global markets, benefits of using electronic or online business modes, and other similar areas. Austrade is yet another service provided by Australian government that provides information to new businesses about international trade and assists them to develop an export portfolio of their products and services. It is decided to name September 2007 as Small Business Month [Australian Trade Commission, 2007). A number of activities are planned for this month specifically for small and medium enterprises in Australia. The crux of the matter is that the Australian government is trying hard to promote small business exports in markets around the world. References Australian Trade Commission. (2007). International Business Briefings During Small Business Month September 2007 [Online]. Available from: [Accessed August 24, 2007]. Department of Foreign Affairs and Trade. (2002). Small Business and Trade in APEC [Online]. Available from: < http://www.dfat.gov.au/publications/APEC_small_business_and_trade/small_business_and_trade_in_apec.pdf> [Accessed August 24, 2007]. Vaile, M. (2002). APEC - Delivering Export Gains to Small Business [Online]. Available from: [Accessed August 24, 2007]. Question 4(a). Outsourcing A company outsource its operations or a project to best in class provider in available industry to achieve efficiency and effectiveness gains. However, outsourcing may backfire and may result in heavy financial and goodwill losses to the company. Risks of Outsourcing Some of the risks of outsourcing are discussed below: Operational Risks - including lack of proper legal documentation, inappropriate financial coverage of outsourced work, legal lacunas in outsourcing agreement, and other similar factors (Brunelli, 2004). Commercial Risks - These might include risks arising due to change in market conditions. The services might become cheaper in market yet the company may have to pay higher since it is locked in agreed upon price for outsourcing duration. Business/ Strategic Risks - These include risks arising due to lack of communication of business objectives and strategy with vendor, misunderstandings, inappropriate interpretations etc. Legal Risks - Privacy issues, relevant regulations, outsourcing laws and regulations affecting the agreement, etc. Logistics Today (2004) has identified more outsourcing risks, including: Lack of risk assessment and planning; Inadequate knowledge about service provider's systems, processes and procedures; and Lack of understanding of business processes, etc. Remedies and Recommendations The most effective way to deal with many outsourcing risks is to ensure that the contract contains all the required clauses and spells out the responsibilities of both parties clearly. Some factors that should be considered include: The qualifications and experience of service provider The sensitivity of information that a specific process works upon The strength and intensity of internal controls at the service provider facilities for information security, privacy and integrity Clear definition of the services to be provided/ received Covenants for breach of any contractual terms should be in place The future expansion and growth of the business should also be considered while developing outsourcing contracts References Brunelli, M. (2004). "Mitigating Risks in Outsourcing", SearchCIO.com [Online]. Available from: [Accessed August 25, 2007]. Logistics Today. (2004). 40 Outsourcing Risks You Need to Know Now [Online]. Available from: [Accessed August 25, 2007]. Question 4(b). An enterprise culture requires thinking out of the box, which is something many managers are not capable of doing. In a society, an enterprise culture "involves moving away from a 'dependency culture' where people continually expect others (often the government) to sort out problems for them. An enterprise culture is made up of enterprising people who are prepared to challenge existing ways of doing things and to come up with new ideas and solutions to the benefit of society as a whole" (TheTimes100, n.d.). It is difficult to say whether Australia has an enterprise culture. This is because, as we see, many Australian small and big companies have started to develop self help programmes and are gradually swirling away from the heavy reliance on government for support. However, bulk of the industry still suffers with a non-enterprise culture where they are fully dependent upon government subsidies, programmes, campaigns and guidance. There are various companies who provide assistance to Australian businesses to develop sound ways for business operations, train their human resource, and guide them along each step of their journey from start to end. One such company is 'Micro and Home Business Network' that provides tools and resources to small and micro businesses in Australia to develop a name for themselves. Similarly, MAUS provides tools, advisory services, and support for both new and old small businesses. Their services include providing essential software, necessary business development support, providing best practices and experienced resources for new organisations, etc (MAUS, n.d.). These companies provide support to businesses that do not have the expertise or the confidence to make their own judgment about business strategies and processes. In addition, these companies bring with themselves, experiences from the industry which provides a certain level of comfort to the new small business owner. On the whole though, we can say that Australia does not have a enterprise culture but it is gradually being introduced. References MAUS. (n.d.). Helping People Succeed in Business [Online]. Available from: [Accessed August 27, 2007]. Micro and Home Business Network. (2005). Micro and Home Business Network - We Help the 1.3 million Micro and Home Businesses in Australia [Online]. Available from: [Accessed August 27, 2007]. TheTimes100. (n.d.). Enterprise Culture [Online]. Available from: [Accessed August 27, 2007]. Read More