Table of Content
I. Introduction to Small Business Enterprise
II. The Challenges of Small Business Enterprise
III. How Entrepreneurial Orientation and Marketing Orientation
6-10 Influence the Firm Performance?
I. Introduction to Small Business Enterprise
Any kind of business is important for a country’s development. A business is significant to the country whether the scale is small, medium or big. The major concern that matters the most is its ability to generate income and improve the economy of the citizen and the country in general.
The blooming of interest towards business among Malaysian and also people around the world has contributed to an increase of small business enterprise. What is small business enterprise? A small business enterprise’s definition is varied. According to the journal report titled, “Entrepreneurial Challenges Confronting Micro Enterprise of Malaysian Malays”, small business enterprise is a vehicle for entrepreneurship (Abdul Jamak, Salled, Sivapalan, Abdullah, 2011). The small business enterprise not only offers employment, social and economy stability but also innovation and competitive force to be empowered.
The National Small Medium Enterprise Development Council of Malaysia’s definition of the small business is mostly related to the income that the business is making or the annual sales turnover and the number of employees in the business. There are no definite definition as every agency has its criteria of judging on whether a business is considered as small business enterprise or not. The council approved any enterprise that meets the criteria of specified number of employees and annual sales turnover.
SME Corporation Malaysia defined small business enterprise or microenterprise as any business with annual sales turnover less than RM15,000,000 to RM300,000 or full-time employees of five to fifteen. This definition is applicable to all sectors.
Thurik and Wennekers (2004) defined small business enterprise as vehicle that change the industry by introducing new products and processes and also people who perform the business for the purpose of living. II. The Challenges of Small Busines Enterprise
Being a small business enterprise, there are few issues or challenges that the owner needs to deals with. The highlighted issues here are financial management, resource limitations, and marketing aspect.
Any businesses need a very stable and good financial management. Financial aspect is the one that make or break the business. Small business enterprises are not able to have economies of scale. Hence, it only depending on the small market to survive and sustain. Financial constraints are cause by the start-up or existing small business enterprises having the problems when the availability of revenue and cash-on-hand is not sufficient for the utilities and such (Davidson, 2011)
The problem is even worse if the cash flow is not in a good situation. It means, the money spent by the enterprises is more than the money earn. The small business enterprises earning or money reserve are not as big as an established firm have. Hence, when crisis comes the enterprises may not able to cope with it with the money that the business have. It may risk a failure for the business. Cash flow is a common issue for most business. Changes in the economy-including the 2014 Budget by the government- will have a significant effect on the financial aspect of the small business enterprise.
There are two cash flow that small business enterprises need to look at and manage; cash flow that deals with the past and the one that forecasted in the future (McCusker, 2013). First, the cash flow statement. A small business enterprise that unable to prepare a cash flow...
References: SME Corp. Malaysia (2013). Guideline for New SME Definition. Secretariat to the National SME Development Council. Retrieved 20th October 2013, from http://www.smecorp.gov.my/vn2/sites/default/files/guideline_0.pdf
Thurik, R., & Wennekers, S., (2004)
Brattina, A.F., (1996). Diary of a Small Business Owner: A Personal Account of How I Built a Profitable Business. AMACOM, United States of America, 210-213.
Kotler, P., (1997). Marketing Management; Analysis, Planning, Implementation, and Control. Prentice-Hall, New Jersey. USA. 204-206.
Business Dictionary. BusinessDictionary.com. Retrieved 21st October 2013, from http://www.businessdictionary.com/definition/consumer-markets.html
Suttle, R., (2013)
Bygrave, W., & Zacharakis, A., (2008). Entrepreneurship. John Wiley & Sons Inc. United States of America.
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