3. business planning- small medium enterprises Flashcards
1
Q
define what an SME is?
A
A small to medium enterprise can be defined as having between 5-200 employees and posses the characteristics below:
local markets
personlisied services
locally based
independtly owned
2
Q
role of SME
A
- produce approximately 50% of all the products produced each year
- have created 80% of Australia’s employment gains during the past ten years
- provide a wide range of products used by large businesses
3
Q
what are SMES’s economic contributions? (BIG-E)
A
- employment = SMEs employ around 8 million people, which represents about 70% of total private sector employment
- GDP = SMEs contributed about 50% of Australia’s GDP
- Invention and innovation = Around 40% of SMEs are actively engaged in some form of innovation
- Balance of payments = Over 90% of Australian exporters are SMEs and they earn almost 50% of export revenue.
4
Q
What makes SMEs successful?
A
- Entrepreneurial abilities
Drive and enthusiasm, setting targets and taking big risks
Business owners are often highly motivated and optimistic - Access to information
Easy access to information regarding profitability,the quality of products and services, and the performance of employees. - Flexibility
Fewer levels of management means decisions can be made quickly and therefore adapt quickly to changes in the external environment.
Close contact between owners and their customers allows the establishment of personal relationships. - Focus on market niche
Small businesses can concentrate their efforts on a few key customers or a specific segment of the market.
This provides the opportunity to become more specialised - Reputation
Because the SME is servicing a narrow market niche, it can develop enviable reputation for quality and service
5
Q
What could contribute to business failure?
A
failure to plan
partnership problems
not enough sales
staff difficulties
poor location
