Issues in Small Businesses, Essay Example

A small business is a business that is owned privately and is operated by a relatively small number of employees ranging from one to a hundred. Such a business also has a low sales volume. Such a business may be owned by a sole proprietor, corporations, or partnerships. However, the description of small varies from country to country.  The running of a small business is faced by various issues such as costs, overhead and customer issues.

The cost of running a small business can be vary discouraging especially due to the high cost of expenditures compared to the low volume of sales  furthermore small businesses find it difficult to get financing from finance institutions which have no faith in them(Turner, 2005). To break even the business has to attain the level where the sale contribution margin is the same as the fixed cost. This calls for proper price control, mechanisms since some small businesses tend to under price commodities (Turner, 2005).

The overhead in small business is sometimes very probative. This is mainly a result of high operational expenses as seen above. The businesses make low sales that are unable to offset the overheads. The overheads also lead to reduced profits (Turner, 2005).

Customers to any business are a sensitive asset. Small businesses sometime find it difficult to attract and maintain their customers because of steep competition from bigger and establish business which offers competitive prices due to economies of scale (Tyson & Schell, 2008).  Customers are sometimes too demanding and it is upon the proprietor to figure out how to meet their need since they double up as his bosses.

For proper unanimous understanding and definition of small business, there is need to incorporate various view point from different places. There is also the need for collective elaboration in understanding and handling the issues facing small business. This can be achieved through research to establish the stand point of small businesses.

References

Turner, L. M. (2005). The unofficial guide to starting a small business. Princeton: Recording for the Blind & Dyslexic

Tyson, E., & Schell, J. (2008). Small business for dummies. Hoboken: Wiley Pub