Problems facing small businesses

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Table of Contents

Challenges
Government Policies
Target market
Government’s responsibility
Publicity
Venturing Into Exportation
Qualified Employees
References

Challenges

Expanding a small business into a large enterprise is associated with several risks that are worth taking if the returns are high and promising. A risk- return analysis therefore is mandatory before a small business gets into a new venture.

A small business faces a number of limitations including inadequate funds for expansion and hiring of expatriates, inaccessibility to some markets due to government cartels and by-laws, poor management skills among shareholders, saturation of the home markets by many smaller businesses, inadequate information on markets and narrow networks of business (Quinn 2006).

Government Policies

Sandhurst Guitars is a small business that faces financial constrains when it comes to expanding. In order to go global, more workers, new offices and new business laws are required. This means that a foreign company may have to pay more tax to the government compared to the local companies.

Because this is a global business, Sandhurst Guitars being an international market venture should consider sourcing for a loan from its federal government to boost its investments. Global businesses generate revenue to its country and create job opportunities to host country’s citizens.

Labor laws and cost differ in different countries thus Sandhurst Guitars might have to spend more on hiring from employees agencies in the foreign state.

Sandhurst Guitars will have to transport its product to the target market. By choosing the cheapest and most convenient means of transport, it will reduce its financial constrains. Insuring its products while on transit should also be prioritized to avoid losses and inconveniences’ to customers (Perry 2012).

Target market

Sandhurst Guitars will be shipping its products to foreign countries but this does not mean that the local market is fully exploited. It is difficult for a small scale business to exploit foreign markets intensively without assistance from its federal government.

Sandhurst Guitars has to make sure that it has more permanent workers as compared to part time workers. Jo Satriani also has to get more information on management by attending seminars as well as workshops or alternative hire a manager who has required managerial skills (Kuepper 2012).

Jo Satrini has to come up with more job policies to acquire and retain employees with appropriate skills which include; health policies, safety policies, salary policies, reward policies, recruitment policies, training and development policies. For employees leaving abroad, small businesses have to create policies that cater for their hardships in these foreign countries (Panju 2012). It is important to provide vacation policies for employees in order to allow them to reunite with their families. All this aims at encouraging the workers.

Jo Satrini has to consider the relations between the state and the target market states. This may help the company to evaluate the possibilities of business exceptions that they can take advantage of. Jo Satrini also has to make sure that employees required for such trade are available.

Small businesses are the backbone to the economy of the country. They boost growth of the general economy and contribute greatly to a country’s economic stability. Governments must put in place plans and strategies that are meant to support and promote the growth of small businesses from the saturated home markets to foreign markets.

Government’s responsibility

The Local government should advise Jo Satrini on available business associations that can support their business to flourish in the foreign market. It should advise the company on the networks that she should join for common marketing and exporting of products (Nusbaum 2012).

It should also provide finance through loans at low interest rates to foreign investors. It should provide lower tariffs in order to allow small businesses to trade in exports. Sandhurst Guitars should benefit from training provided by the government to small businesses on new technology, in production and shipping of improved straps and cases.

Organizations such as national development fund in Australia that provides training for workers in small scale business should be established.

It is the government’s responsibility to make sure that they exempt small businesses from extreme taxation. Heavy licensing that applies to large firms and constant harassment from government official as well as high fines should be avoided. Easy access to passports and travel documents to citizens is one of the ways in which the local government can promotes global development of small businesses.

Publicity

The government should ensure that it promotes private employers giving incentives hence addressing the issue unemployment (Kuepper 2012). For a small business to expand in foreign countries, its products be well publicized to catch the consumers eye and create awareness.

Sandhurst Guitars has immense potential to expand beyond borders because its products are widely accepted. Its management should not hesitate to expand the business rather should seek financial help and sustainable managerial structures that would allow their growth in the market.

Venturing Into Exportation

Before venturing in to exportation of its products, Sandhurst Guitars should have a wide knowledge of its competitors in foreign states, their economic level, and political stability in the foreign country (Heathfield 2012). The level of the competitors’ technology and the social and cultural influence on the locals is a factor to consider as well.

Since there is an already existing market for the guitars, the straps and the cases, then Sandhurst Guitars can easily succeed in the market since it is not a pure risk (Vernon 2008). The use of foreign agencies could be an easy way of handling a new market with new consumer demands.

Qualified Employees

Sandhurst Guitars should not hesitate to seek the governments help and advice on how to carry out its operations. The company should never ignore the presence of Connie agencies too. Sandhurst Guitars can consider exporting employees as well as hiring citizens of the foreign country whichever seems cheaper and affordable to the company. It should consider well-qualified employees who have a wide knowledge on the products and for the already existing employees the company should provide on-job training.

It should also seek national employers’ incentives from the government to enable it to achieve the set goals. Appropriate management is required if the business is to succeed in this competitive environment. The company should hire well skilled and qualified managers to run its business (Guadagn 2012). Accurate record-keeping for strategic planning and loss-profit calculations should be maintained. The company should consider having adequate number of employees to delegate the work and beat deadlines.

Bureaucratic system of management should be broken in order for the employees to be able to make their own decisions on matters of the business. It should encourage empowering the employees through training and development of skills (Vernon 2008). If Sandhurst Guitars realizes it is financially straining to take up such ventures then it may take the option of franchising.

References

Guadagn, A. 2012. Your Shared Service Center’s Social Media Game Plan. Web.

Heathfield, S., M. 2012.What is Human Resource Management?Web.

Kuepper, J. 2012. Should You Invest in Foreign Countries? Foreign Investments Add Diversity, but There Are Risks. Web.

Nusbaum, R. 2012. Success in 2010 requires Investing in Other Countries.Web.

Panju, H., (2012) Making Your Organization’s Business Plan A Reality. Web.

Perry, B. 2012. Evaluating Country Risk For International investing. Web.

Quinn, L. 2006. HR – Horizontal Rule. Web.

Vernon, K. 2008. Some Tips for investing offshore. Web.

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