Plans for Small Business and Non-Profits
Two thirds of all business startups fail in two years. The major reasons are accumulating too much debt, inadequate management, unanticipated personal sacrifices and poor planning. Writing a formal business plan should be your first step in starting a business; however, this step is not required. In fact, Inc. magazine states that only 40 percent of the successful entrepreneurs they interviewed for the 2002 Inc. 500 list admit to writing a formal business plan before launching their business. This does not make a formal business plan any less important. Regardless of when it is written, a business plan defines the strategy that creates a successful business operation. Review this SBA website for proven ideas that will help an entrepreneur to increase their chances for success.
Human Resource Management Issues
Employees are one of company’s most valuable resources and competitive advantages. Smaller organizations usually don’t have as many options as larger organizations, but they should realize the importance of recruiting, selecting, training, appraising, and compensating employees. Companies must commit whatever time and other resources are necessary to develop appropriate strategies for attracting and keeping good people.
Innovation and Flexibility Considerations
One of the primary advantages that small businesses and entrepreneurial ventures can develop is a commitment to being flexible and innovative. Large organizations usually produce large quantities of products to take advantage of economies of scale and can’t be as flexible as small organizations. Also, resource commitments often prevent them from responding to new and quickly changing markets as effectively as small, nimble businesses can. Strategic managers at small businesses and entrepreneurial ventures need to capitalize on this flexibility advantage and be aware of, and open, to environmental changes (another good reason for doing an external analysis).
This is a process in which existing products, processes, ideas, and businesses are replaced with better ones. Larger organizations tend to concentrate on improving products they already have in order to justify large expenditures on facilities and equipment. Small businesses and entrepreneurial ventures have the potential to develop real innovations in technology, markets, products, and ideas. In addition, they are the driving force of change in the process of creative destruction.