The paper "Characteristics of Small Businesses and Their Owners" is an outstanding example of business coursework. Small businesses are generally defined as businesses that are practised in small scale, and their main characteristics include; few employees, low sales volume and low market share. Small businesses make up a large percentage of the economy’ s businesses. This paper looks into the characteristics of small businesses and also looks into the characteristics of the small business owners since not all people have personal traits and abilities to venture into the small business field. Characteristics of Small businesses and small business owners A small business can be defined as a small scale enterprise which is run by its owners.
The owners are the ones who fund it, manage it and operate it and it is considered to be an independent firm. (Solomon, 2011) The number of staff employed by the small business owners to run the business is in limited numbers since there are not many positions to fill in in a small business. The assets owned by small businesses are not many and the financial resources available for the business are limited since most of the financial resources come from the owner of the business.
(Longenecker et al, 2005). Examples of small businesses include sole proprietorships, privately owned corporations and partnerships. Characteristics of small businesses Small businesses have certain characteristics that are easily distinguishable from large businesses. Barnes (2007) looks into some of the characteristics of small businesses: When it comes to the market and the customers in the small business industry, communication that exists is very fast and highly responsive. This is because the owners of the business come into the first-hand contact with the market and its customers. When it comes to the human resource perspective of the business, there are few numbers of employees.
This means that the relationship that exists between the staff and even the owners is that of a close-knit nature since there is a lot of interaction that goes on between them. On the culture that exists in the work environment, there exists a unified sort of culture. This makes it very easy to implement some change in the business. However, there can be the existence of dictatorship since the owners of the business are the ones with the power to make decisions and they hardly make any consultation with the staff members of the business. When it comes to the organizational structure, there is quick decision making since the owners are the ones who make decisions for themselves and the decisions that are arrived at are quickly implemented (Armstrong, Forgarty & Dingsdag, 2007). There are plenty of other characteristics of small businesses that exist that are discussed by Schaper (2004) and they include: Small businesses usually have one or two owners and these owners are most likely to be family members since most small businesses are family-based with a high number of them being a home-based sort of business. Financial resources are provided by the owners of the business.
This usually results in the existence of limited financial resources and also limited assets for the business. Time frame. Small businesses usually have a short term time frame. This means that they have a short life span since they are mostly based on one idea and once it is accomplished, the business has met its goals. Low net profit.
Small businesses are known to reflect low levels of net profit since they are mostly based on a small scale proportion. They also have limited products and services to offer to the market and so they tend to have a low market share. Goals and objectives of a small business are usually personalized. Moreover, the personal interests of the owners directly affect the business. Managerial skills. The managerial skills are informal in nature since the very few of the owners who run the business will actually have any formal training on how to run the business.