Introduction
Starting a small business is a challenging but fulfilling endeavor. I have learnt that it requires hard work, perseverance, and proper planning to be able to succeed. The small business owner often has to handle many activities like sales, delivery, management, and growth, often with limited or no staff. As a result, if the small businessman is unable to address all these elements effectively, the business itself will suffer. A business therefore requires meticulous planning and management, for success to be registered.
Running a Small Business
When running a small business, it is first very important to find out what legal requirements are involved in its set up. This will entail understanding whether the business is a sole proprietorship, partnership, or company. This will be followed by registering the business in accordance with the legal procedures. It is also necessary to know what industry certifications are and ensure that the business is operating within industry regulations (SBA, 2011).
My learning has taught me of the great role which planning plays in the running of any business and especially a small one. As an entrepreneur, I would first start by identifying what I would like to trade in and then write out a business plan. A business plan will help to me to outline the objectives and goals of the business along with the anticipated growth (Marinel, 2005). The business plan contains a marketing plan to outline the marketing strategies which will be used to market my products or services. The business plan will also be a vital document as I approach banks for investors for funding.
This class has also emphasized the need for proper organization and management, which I would strive to practice as a budding entrepreneur. For example, it is vital for a retail business to manage its inventory properly (SBA, 2011). I would ensure that I have put systems in place to monitor the stocks. This will enable me to know which items are fast sellers and which ones are not. Inventory management will help me to know in case staff members are pilfering away the stocks. It is also important to manage my resources, time, finances, and employees well, so that anything that needs to be improved can be noted and enhanced.
Financial management is vital for a business. Small businesses often face financial challenges especially when they require funding for capital. As an entrepreneur I would have to source for funding; often, the small businessperson has to source for funding from his own savings, loans from family members or friends, or bank loans (Chi-Kim and Au, 2010). It is also important to make projections to know when the breakeven point will be reached. Breakeven analysis enables a businessperson to know when the business will be able to cover its expenses and begin operating at a profit (SBA, 2011).
I have also learnt the importance of networking in business. By making efforts to know people in a similar or related business or joining business associations, the business gains more visibility (SBA, 2011). This can also be achieved by participating in community events; potential customers will learn about your business and may later support the business. Marketing is also a vital component of running a small business. Effective marketing begins by first developing a marketing plan which is a component of the business plan. To develop a marketing plan, it is essential to carry out proper research on the target market, the competition, and the strengths or weaknesses of the business. The marketing plan will also help in analyzing what tactics will be best used to promote the business as well as outline what will distinguish the business from the competition (Marinel, 2005).
Keeping records in business is also vital element of running a small business. Basic skills in bookkeeping are necessary so as to record purchases, sales, or credit transactions that are involved in the operations of a business. These records are what will assist the businessperson to assess whether the business is operating at a profit or a loss. These records will also be important in case there is need for funding; investors or financing institutions may need to analyze the performance of the business to determine whether or not to finance the business.
Conclusion
Running a small business is often a challenging task because the owner often has to carry out many diverse functions using limited staff or no staff at all. I have learnt that this requires proper planning, organization, and management to ensure that every aspect of the business is running efficiently. It is important that a business plan is written before the business begins operations. This is because it will help in creating a strategy for the operation of the business in addition to necessitating the thorough research of the potential business environment. Furthermore, I have realized the importance of marketing and proper financial management in a business, factors whose importance I had not fully understood. Learning about the operations of a small business has been a valuable learning experience; I would definitely utilize what I have learnt in running my own business.
References
Chi-Kim, C., & Au, E. (2010). Running a small business by students in a secondary school: its impact on learning about entrepreneurship. Journal of Entrepreneurship Education, 1345-63.
Marinel Le A. (2005). Start and run your own business. Oxford: How to Books Ltd.
US Small Business Administration (2011). Managing a Business. Available at http://www.sba.gov/category/navigation-structure/starting-managing-business
