Organizational diagnosis (individual assessment)

2024Prof. Adrian Bulzacki

BUSI 660

Small Business Management

Week 1

WHY DO WE STUDY SMALL BUSINESS?

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SOME PRO’S

• Small firms generate most new private employment.

• Public support is growing as many consumers lose favor with big business retailers.

• Many incentives, like tax credits, to do so.

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SELF-EMPLOYMENT IN CANADA

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HOW MANY SMALL BUSINESSES ARE THERE IN CANADA? HINT: THERE ARE 1.23 MILLION EMPLOYER BUSINESSES IN TOTAL (KEY S MALL BUSINESS STATISTICS - 2020, GOVERNMENT OF CANADA)

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• 500,000

• 1,200,000

• 900,000

• 50,000

(97.9% of all employer businesses are small businesses)

MOST OF SMALL BUSINESSES IN CANADA ARE LOCATED IN:

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• Quebec

• B.C.

• Ontario

• Alberta

(440,306 out of 1,200,571)

SMALL BUSINESS MUST HAVE AT LEAST TWO OF THE FOLLOWING FEATURES:

• Management is independent, because the manager usually owns the business.

• Capital is supplied and ownership is held by an individual or a few individuals.

• The area of operations is primarily local, although the market is not necessarily local.

• The business is small in comparison with the larger competitors in its industry

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DISTINGUISHING BETWEEN ENTREPRENEURIAL VENTURES AND SMALL BUSINESSES

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DISTINGUISHING BETWEEN ENTREPRENEURIAL VENTURES AND SMALL BUSINESSES

Small business

Independently owned and operated and is not dominant in

its field.

Entrepreneurial venture

The principal objectives of the owner are profitability and

growth.

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DISTINGUISHING BETWEEN ENTREPRENEURIAL VENTURES AND SMALL BUSINESSES

Small business Owner

Establishes a business primarily to further personal goals, including making a profit.

Entrepreneur

Goals include achievement, profit, and growth, achieved

through innovation and strategic management.

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WHY SMALL BUSINESS IS SO IMPORTANT?

• Encourage innovation and flexibility.

• Keep larger firms competitive

• Develop risk takers

• Generate new employment

• Maintain close relationships with customers and the community

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SOME CURRENT PROBLEMS FACING SMALL BUSINESSES

• Political and economic issues.

• World economy.

• Capital or financing issues.

• Unexpected growth.

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INADEQUATE FINANCING

• It cannot be stressed enough that a shortage of capital is the greatest problem facing small business owners.

• Without adequate funds, the small business owner is unable to acquire and maintain facilities, hire capable employees, produce and market a product, or run a successful business.

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INADEQUATE MANAGEMENT

• Many owners tend to rely on one-person management and are reluctant to release control, or to delegate responsibilities.

• They may not select qualified employees or may fail to give them enough authority and responsibility to manage adequately.

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SOME CURRENT TRENDS CHALLENGING SMALL BUSINESS OWNERS

• Exploding technology

• Occupational and industry shifts

• Global challenges

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OCCUPATIONAL AND INDUSTRY SHIFTS

Reinvention

The fundamental redesign of a business, often resulting in reduction in size and markets.

Reengineering

The redesign of operations, starting from scratch

Downsizing

Reducing the number of employees to increase efficiency.

Also called rightsizing.

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WHY PEOPLE START SMALL BUSINESSES?

• Satisfying personal objectives.

• Achieving business objectives.

• Achieve independence.

• Obtain additional income.

• Help their families.

• Provide products not available elsewhere.

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ACHIEVE BUSINESS OBJECTIVES

Objectives

• The goals toward which the activities of the business are directed.

• Service, profit, social, growth.

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Social objectives

Goals regarding providing a service to the community and doing their part in

environmental protection.

Profits

Are the reward for accepting business risks and performing an economic service.

Are needed to ensure the continuity of a business.

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WHAT LEADS TO SUCCESS IN MANAGING A SMALL BUSINESS?

• Serving an adequate and well-defined market for the product.

• Acquiring sufficient capital.

• Recruiting and using human resources effectively.

• Obtaining and using timely information.

• Coping effectively with government regulations.

• Having expertise in the field on the part of both the owner and the employees.

• Being flexible.

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DOING AN INTROSPECTIVE PERSONAL ANALYSIS

Values

Mental abilities

Attitudes

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FACTORS AFFECTING THE FUTURE OF AN INDUSTRY OR A BUSINESS

Examples of Factors Affecting Industry and Business Trends

Economics—gross national product (G N P), interest rates, inflation rates, stages of the business cycle, employment

levels, size and characteristics of business firms and not-for-profit organizations, and opportunities in foreign markets.

Technology—artificial intelligence, thinking machines, laser beams, new energy sources, amount of spending for

research and development, and issuance of patents and their protection.

Lifestyle—career expectations, consumer activism, health concerns, desire to upgrade education and climb the

socioeconomic ladder, and need for psychological services.

Political-legal–antitrust regulations, environmental protection laws, foreign trade regulations, tax changes, immigration

laws, childcare legislation, and the attitude of governments and society toward the particular the type of industry and

business.

Demographics—population growth rate, age and regional shifts, ethnic moves and life expectancy, number and

distribution of firms within the industry, and size and character of markets

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SOME AREAS OF CONCERN FOR SMALL BUSINESS OWNERS

• The success of smaller firms tends to be limited by factors such as inadequate management, shortages of capital, government regulation and paperwork, and lack of proper recordkeeping.

• Two other concerns are poorly planned growth and the threat of failure.

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POORLY PLANNED GROWTH

• Setting goals without realistic steps to meet them.

• Not training your employees well-enough so that you are unable to delegate responsibilities.

• Not preparing for emergencies.

• Being unable to deal with stress.

• Failure to seek help.

• The paradox itself: You own your business, yet you don’t enjoy it.

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STAGES IN THE DEVELOPMENT OF A SMALL BUSINESS

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THREATS OF FAILURE

Failure

Results from inability to succeed in running a business.

Discontinuance

A voluntary decision to

terminate a business, due to

health, family situation, or the

advantages of working for

someone else.

Personal (informal) failures

The owner who cannot succeed

voluntarily terminates the

business.

Formal failures

Failures ending up in court

with loss to creditors.

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UCW - BUSI 660 - Small Business Management - Prof. Adrian Bulzacki

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THANK YOU QUESTIONS?

UCW - BUSI 660 - Small Business Management - Prof. Adrian Bulzacki

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BONUS: ENTREPRENEUR TOOLS

Entrepreneur Tools by Mohammad Keyhani | ZEEF

https://entrepreneur-tools.zeef.com/keyhanimo

UCW - BUSI 660 - Small Business Management - Prof. Adrian Bulzacki

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