Save the Small Business

Abstract

PART ONE: INTRODUCTION Small business is a very detailed part of our free enterprise system. However, not all small businesses are the same, and all don't have the same problems. For convenience sake, only manufacturing and retailing will be covered in this project, excluding the service industry for various reasons. PART TWO: RESEARCH AND GENERAL ANALYSIS 2.1 Small Business in America Throughout our history, small business has been the backbone of our society, accounting for 98 percent of our all firms in the United States. There are many ways to define a small business, both quantitative and qualitative, depending on what you are interested in. For our purposes, we will use a mix of both quantitative and qualitative, to build the framework for this study. 2.2 Failure and success In the last century, the independent workforce has dwindled from 80 percent in the late 19th century to under 20 percent today, and of those businesses that open every year, about one third of them close within that same year. And so we ask "why do so many small businesses fail?" However, in asking, we must be sure to weed out the bias opinions of those who have failed, because they wouldn't dare blame themselves. 2.3 The Main Causes Businesses fail for a varied number of reasons, but they have been broken down into broad groups in order to find the main ones. Key reasons for failure include mismanagement, poor financing, excessive competition, skilled employee shortages, regulations, taxes, and lack of research and development. There are, of course, other reasons for failure, but these are the causes in the majority of the cases. 2.4 Alleviations and Solutions The problems of small business are many and varied, however most of them are from human error and are correctable. The government has recognized this and has tried to help the small business regain a strong status. Similarly, our educational system has put forth an effort to prepare better college graduates for the world of independent business. PART THREE: WORK EXPERIENCE: THE SMALL BUSINESS UP CLOSE IN OPERATION 3.1 The Nature of the Business For the work experience part of my SIP, I worked for Bryan Biologicals Inc., where I was assistant office manager. The firm is a small medical supply company, employing six people full time, with annual gross sales of just over $750,000. It deals mainly in the Michigan area, w.i:th some accounts in Ohio. 3.2 Operation BBI is a distributor for mainly five companies, dealing in plastic and glass laboratory supplies, diagnostic testing equipment, and blood serums and solutions. They supply doctor's offices, hospitals, and private laboratories, with sales representatives to service all customers. All business and sales orders from customers must pass through the office, where they are invoiced, filled, packed, and shipped. The president/owner takes care of inventory control, overhead, and expenses, and the bookkeeping, a key to monitoring performance is handled daily by the assistant office manager. 3.3 Business Strategies Through my work at BBI, I have picked up some hints, including strategies on pricing, discounting, and clientele building. These are advantages I picked up in my close work with the president/owner of the firm. 3.4 The Success of Small Business: Working Hard to Make It Work for You The success of a small business, especially Bryan Biologicals is dependent on the cooperation and coordination of its employees. With a strong personal effort from each employee, plus good management and leadership, success will eventually be obtained by the firm. PART FOUR: FROM THE ECONOMIC STANDPOINT 4.1 Economic Studies Small business is a major int·erest to the economic disciplines. Economists study the small business world because it is the closest thing to perfect competition that we have in the United States, with business relying on the market and other firms. Small business is also a key source for new ideas and inventions. 4.2 Finance Some knowledge of finance is a must for all beginning entrepreneurs. They must secure financing for their operation through themselves, investors, or loans, all of which require some familiarity with basic finance. 4.3 Market Research Small business, in many cases, relies on the economist to do market research for them, to help them map out the feasibility of the business venture. The recommendations of the economist can play a key role in making the decision to open the business or not. 4.4 Accounting Accounting is one of the most important economic disciplines in small business. Without proper accounting or bookkeeping, a business has no way of monitoring its performance as well as the performance of its customers. 4.5 Management: Balancing it all Without good management to hold a firm together and make it run smoothly, a small business has absolutely no chance for survival. With the proper training, a good manager or owner can lead his firm to success. PART FIVE: ANALYSIS AND SOLUTION 5.1 Implemented Aid The government has tried to help out the small business with financial, managerial, and technical assistance, as well as offers for government contracts, but their efforts fall short of assistance for many entrepreneurs. Similarly, education has been improved to give more attention to courses dealing with the small business. This also has been too little, in that most business courses still focus on the large scale firm. 5.2 The Need for Regulation We need to bring the resources of both the government and educational systems together to create one universal program to regulate and monitor small business. We need to make it harder to jump into independent business, in order to educate the ignorant on what they are getting into. 5.3 The Proposed Small Business Regulation Administration Under this proposal, a person would have to read a booklet on small business management, take an examination on the material, and be interviewed to find out if the person is capable and prepared, before they are allowed to operate their own business. If the applicant passes these sections, he will receive an SBOL, a Small Business Operator's License, enabling him to proceed with his business adventure. 5.4 Checklist for Organizing and Operating a Small Business This is checklist for people who wish to go into business for themselves, so that they will be more prepared for trying to start up. It is to help the entrepreneur to not forget any aspects of the organizing of the business. PART SIX: CONCLUSION This section is a wrap up of all conclusions, analysis, and recommendations offered in this project, and restatement of the problem at hand.