People at some points do start up a business venture based on how it played out. It is germane for the owner manager to sincerely acknowledge under which classification his/her business falls per time e.g. Start –up, Micro Business, Small Business, Medium Sized Business etc.
Though, classification of available business ventures has severally being done by various governments of different African countries basically because of their interest in taxation grouping and policy plans. Many governments till date do have a difficulty in defining and classifying small business, maybe because of lack of real time research. Their different definition has ended up confusing the generality of the citizens. It may be because of the inability of the governments to properly define small business that has caused small business to suffer financial assistance, policy assistance and not getting the required enabling environment precisely in Nigeria.
Every entrepreneur or owner manager is expected to be sure of where their business falls per time. This little knowledge will assist the owner to consciously move his/her business forward at the right pace. Little or no knowledge by most entrepreneurs is responsible for most small businesses dying in their first 3 years.
The definition of small business should be based on the size of your employee, annual turnover, working capital, Assets; Revenue e.t.c. The truth is that most of the small businesses don’t actually have employees. They provide income to their owners, but by definition are not job creators. Many of these businesses exist largely to support a family and are not principally focused on expansion. Other yardstick that may be used to define it is the location of the enterprise and also its ownership type. A small business is typically owned by an individual and it operates privately. It could be based at the owner’s home or at a location that does not occupy so much space.
However, a business may be small in the context of the economic environment it operates from. Some businesses are small because their products and services impacts only on a small pool of customers either within their community or scattered around one state and the other.
Another way to know is when the small business does not even have any existing major source of funding. Unfortunately, it has to depend on crude survival strategy to remain in the industry it belongs. Majority of the firms and business organizations that exists in Nigeria are individuals seeking to earn a living through entrepreneurial endeavor. In clear terms, a small business is not expected to run unnecessary expenses as if it has the capacity of a medium sized business.
What your business may lack that makes it a Small Business:
Knowledge / Information
Advice and counseling
Basic and targeted business planning
Kunle Adebunmi has helped few organizations run and manage their businesses successfully at managerial capacity level. He has impeccable credentials and untapped expertise that enables him multitask as a Small Business Advisor, Technology Enthusiast, Entrepreneur, Consultant, SB Analyst and Nation Builder. He is the founder of Mooregriz Global. Visit his website for more information HERE.
The opinions expressed in this article are solely those of the author.