Our essay is divided into five sections. Section one will discuss about the definition, nature and scope of Small Business. In section two we will get the opinion of some entrepreneurs according to our questionnaire. Section three will deal about some common problems that our Small Business firms face, according to the answers of previous section, which will be followed by some suggestions from our group in section four.  And our discussion will come to an end with some concluding remarks in the last section.

Section One: Small Business

DEFINATION:

  • According to Small Business act 1934,” A business which is independently owned and operated and not dominant in its field” is a Small Business.
  • Bolton Report on the commission of the inquiry on Small Business firms, 1977,”Small firm is one that has a relatively small share profits market.”
  • Stoner, Freeman, & Gilbert, 1995, “Small Business refers to business locally owned and managed, often with very few employees working at a single location”.
  • US Government, “A Small Business is one with fewer than 500 employees.”

According to executive committee for national economic development,”A Small Business one of which process at least two of the following characteristics:

  • -Managers are the owners,
  • -Capital supplier and the owner is individual or a small group,
  • -Worker and the owners are local, market may not be so.
  • -Relatively smaller compared with the biggest unit of the industry [Sales, employees etc.]

From all of the above definitions we can make a general definition of Small Business. A business not dominating in its field, does not engage in any new marketing, workers are local, working at a single location, produced units are relatively small in size, and often all organized by the owner or his family members.

Now-a-days there are a lot of Small Business firms are operating in verity of fields. We get our daily necessaries from the grocery shops. One takes food from a restaurant or from a first food shop. Some shops are selling cloths, books, electronics etc. Hair cutting saloon, laundry, automobile and electronic mechanic, travel agent all of them are serving us in different ways. A doctor, engineer or a lawyer give us different consultation services.

Some other definitions:

Curtis E. Tate, Jr. and his co authors in their book “Successful Small Business Management” (1982) define small business as “An organization with a name, a place of operations, an owner, and one or more workers other than the owner.”

The Federal Reserve Bank of USA says small business is one which “is independently owned and operated but is not dominant in its field.” In the Small Business Act of 1953, the US Congress gave the same definition of small business.

Definitions in the Context of Bangladesh:

“Small industry means an industrial establishment or unit which is rum mainly by hired labor and not using mechanical motive power but does not normally employ more than 50 workmen and whose land, building and machinery does not exceed Tk.150, 00,000 in value in either case.” – E. Pakistan Small Industries Corporation Act of 1957.

Characteristics of Small Business Enterprises:

There are many characteristics of small business. Some of which are described in the following paragraph:

Unity of Individuals and the Organization

The strength of small business is that individual employees retain their personal identities, yet support the unity of the organization. Employees understand and commit themselves to corporate objectives.

High Individual Motivation

Individuals are highly motivated for further exertion and organizational development. Though pay for performance is a principal motivator in a small business, comfortable and social life related workplace plays a role of the social motivator.

Owners as Managers

In most of the small businesses, owners are responsible for managing the firm. The employees are hired on owner’s discretion. Owners are responsible for taking any and all management decisions.

Streamlined Communication

With simple and petit structure of the organization, good and effective communication are maintained with and among employees. This keeps the organization more susceptible to changes in the business arena.

Supportive climate for Organizational Integration

Management including supervisors keeps close relations with subordinates. They offer training, encouragement and counseling to subordinates for problem solving. Employees are provided with challenging and enjoyable workplace.