Entrepreneurship and Small Business Management
Contents
Introduction
Entrepreneurs are key to the economic wellbeing of a country as well as the free enterprise system. The driving force behind the enthusiasm exhibited by entrepreneurs is the realization that the success of their business is closely tied to the success of their personal lives. In this thinking therefore, entrepreneurs strive to produce the best products and services at the best prices so that they can attract customers. It is apparent that the sheer passion for excellence sometimes makes business creators forget about defining quality (Gulbro et al., 2000). Many entrepreneurs go into business without the knowledge and expertise in strategic management thereby failing to implement quality initiatives and systems until they are forced to do so by customers.
Small businesses must ensure that they use standards, management models and assessment tools together with quality tools and concepts to ensure that they not only survive but also flourish over the long term. The results of using quality initiatives are: understanding customers’ needs so that their products and services are tailored to meet those needs, documenting and improving processes and streamlining all the stakeholders of the business including management and employees, suppliers and customers. The major focus is in managing a business from the perspective of the 3 Ss which are structure, strategy and systems. They can be achieved by the application of quality award criteria, management models, and standards. This paper will compare companies with best practice with the aim of analyzing their entrepreneurship and small business management models.
Similarities
This paper is going to analyze three distinct businesses that operate in different sectors. First is CEFCO convenient stores chain which is located in Temple, Texas. The company boasts of formation of the best teams to ensure that customers are served conveniently. The second company is Legendary Whitetails which is a family-owned business selling gifts, casual apparels and related products. “Just ask and you shall get” is their mantra. The third company is Coconut Bliss which sells ice cream. The company boasts of” ice cream with social proof – it’s all in the pudding”
The first common strategy adopted by these companies is that they have clearly defined strategic intentions. They have clearly laid out missions, visions, and goals and objectives. In addition to these being set out, they have clearly defined strategies for achieving these individual facets. It is prudent that small business owners have clearly defined strategic goals and objectives as well as tactics of achieving them. Strategies are the major driving force of an organization’s structure and should thus be paid close attention to (Chandler, 1962).
The companies also have core values that employees are expected to adhere to once they are contracted. These guiding assumptions, philosophies and attitudes form an integrity base for ethics that all people in the company are expected to commit to at all times. These principles were established in some companies as they were being started; for example Legendary Whitetails which is family-owned businesses. These principles have grown over time to form the organizations’ cultures which have helped it excel in its field of operation.
The above named businesses have well defined systems of operation. These systems are supported by the organizational structures that have been put in place. There are well laid procedures that are followed to ensure that the final products are to the highest standard. Although Coconut Bliss does not own the entire infrastructure that it uses, it nonetheless hires the best from partners that it works with. CEFCO convenient stores chain has performance appraisal processes as a unique future as an addition to the communication and production processes shared by the others. The processes in these companies are well documented as they are included in individual job descriptions. In this way, these companies ensure that there is no duplication of duties, overlapping or divergent centers of power. There are various documentations that the companies use at this stage to ensure that there are no system disruptions. All the businesses discussed use or flowcharts or checklists to ensure that all processes are smoothly flowing.
The companies ensure that the personnel they hire are of the highest quality. CEFCO convenient stores chain strictly hires management employees as interns after they have completed their higher education. The careful choice of personnel ensures that there are competent teams being formed as all operators are aware of their individual and collective tasks. CEFCO has performance appraisal systems where employees are constantly evaluated to make sure that they perform to the best of their abilities.
All the three companies have invested in feedback mechanisms. Apart from continuously appraising their own systems, structures and strategies, they also ensure that they get the opinions of their customers. This is an important process as it ensures that the information acquired is fed back into the strategic management process for the overall improvement of the companies. Without measuring how a company is performing, it is difficult to guarantee profitability as well as plan for its future (Jarvis et al., 2000).
All the companies do a lot of marketing for their products albeit using different channels. Both Legendary Whitetails and Coconut Bliss have chosen social media as their main marketing mode. In contrast, CEFCO has a large presence in its areas of operation such that it only has basic internet presence although very interactive. The first two companies owe their success largely to the social media as they use captivating images to attract mostly young people to their businesses. Whichever form of marketing that a small business uses is fine if it achieves the expected goal. However, it is advisable to use different marketing modes to reach a large number of people. The social media is perhaps one of the most convenient yet inexpensive places to market a company’s products.
Differences
One of the differences between these companies is that only one of them has performance appraisal programs for their employees. In this era of performance contracting, it is prudent that managers continuously appraise their employees to guarantee optimum operational capabilities (Wessel & Burcher, 2004). If some employees in the production process slacken, then, the whole process becomes slow and the quality of the product given to the customer might be compromised. On the other hand, disruptions due to incompetence result in loss of billable man hours reducing the company’s bottomline. It is therefore prudent for companies to have performance appraisal mechanisms to guarantee the competence of employee at every stage however small the businesses might be.
All the companies had informal and inadequate reward systems. The most that CEFCO has is the employee-of-the-month board. It is prudent that small businesses have reward systems to ensure that their employees are motivated to continuously work to their best level. There are many forms in which rewards can be given. One of the most common is the issuance of bonuses. These may be in monetary form or may entail a company sponsoring its best employee to a get away or something of equal standing.
Another area where differences in the strategies occur is in consultancy. For any small business to grow, the management must constantly engage others more experienced in the business to ensure that past mistakes experienced by others are not repeated. Legendary Whitetails and Coconut Bliss have taken to social media as their primary source of information on how to proceed, informed by customer feedback. Although this is commendable as it helps make products that are customer oriented, it is important to consult other players to ensure that all processes in the business are running as they should. On the other hand, CEFCO has very many players who are larger than them from whom they learn.
Conclusion
There is no single strategy that can be said to be the best fit for all small businesses. Entrepreneurs and small business managers must ensure that they strike the right balance, specific to their business in order to produce quality products that are going to attract customers. As indicated above, all the companies are successful in their own areas of operation as they have identified the best practices that work for them. This discussion therefore shows that there are numerous avenues, through which businesses can be started, survive and eventually flourish. The only trick is to ensure that all purposes, principles, processes, people and performance work seamlessly.
References
Chandler, Jr., A. D., (1962). Strategy and Structure: Chapters in the History of American Industrial Enterprise. Cambridge, Massachusetts: The MIT Press
Gulbro, R. D., Shonesy, L., & Dreyfus, P., (2000). Are small manufacturers failing the quality test? Industrial Management & Data Systems, 100(2): 76-80.
Jarvis, R. et al., (2000). The use of quantitative and qualitative criteria in the measurement of performance in small firms. Journal of Small Business and Enterprise Development, 7(2): 123-134.
Wessel, G., & Burcher, P., (2004). Six Sigma for small and medium-sized enterprises. The TQM Magazine, 16(4): 264-272.
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