Small business management and Entrepreneurship David Stokes Nicholas

Small business management and Entrepreneurship David Stokes Nicholas Wilson Small Business Management and Entrepreneurship Fifth Edition

Lecture outline What is small business? Definitions of small business Why bother with small businesses? The revival of the small enterprise Reasons for revival

What is a small business? Define the term small business

t Quantitative definitions Numerical parameters to differentiate between smaller and larger businesses It can affect the eligibility of a business for certain types of grants or assistance These definitions are simple to apply These measures may differ across industries

Non- quantitative measures It may be difficult to define small business precisely on paper, but more easy to recognize once they are in operation A committee of inquiry on small firms set up by the UK government came up with three important characteristics A small firm is managed by its owner(s)in a personalized way It has a relatively small share of the market in economic terms It is independent in the sense that it does not form part of a larger enterprise and its ownership is relatively free from outside control in its principal decisions

These criterion are subject to a lot of critisizm Low market share may not be a criteria as firms can operate in highly niche segments or limited geographic markets

What do you think are threats to small businesses? Economies of scale Research and development on new products Trade barriers

The Bolton Report 1971 The report recognized the contributions made by the small enterprises to the economy as follows: A productive outlet for enterprising and independent individuals The most efficient form of business organization in some industries where optimum size of production or sale is small Specialist suppliers, contractors to large companies Dealing in specialized markets Competition to the monopololistic tendencies of large companies

Reasons for small business revival Growth of the service sector Information technology Flexible specialization and networks Subcontracting Unemployment, redundancy and golden handshakes

It is a turbulent sector with huge movements in and out

Innovators of new products The breeding ground for new industries The seedbed from which tomorrow’s large companies will grow