IntroductionCurrently, many entrepreneurs are striving to outdo the larger organizations in terms of customer satisfaction and profitability. To manage this, it is critical to develop a well defined business plan. This report intends to explore some of the issues involved in planning for a small business. It also gives some of the advantages and disadvantages of engaging in a small business as compared to the larger businesses. Advantages and disadvantages of a small businessA small business may be defined as any autonomously held and run venture, which is not leading in its competitive vicinity and has less than 500 employees.
For instance, a local restaurant that lacks dominance in the relevant industry in the particular region qualifies as a small business. Mostly, a small business is a sole proprietorship, which has its share of advantages and disadvantages. To start with, a small business is easy and least costly to run as compared to large businesses. This is because it requires fewer resources to start up and maintain it. Such a business is also beneficial as it gives the owner complete control and independence of his business.
There is independence in terms of decisions on who to work with, business location, and business time (Stokes, 2010). It has an advantage relating to the income and profits received. Here, the owner does not have to share the profits with anyone and enjoys the benefit of numerous tax deductions. It is also flexible in that it enables the owner to be his own boss, spend enough time with his family, and engage in something that he enjoys. Moreover, small businesses may be beneficial compared to large businesses because they have an ability to customize their products and services in order to satisfy the particular needs and wants of customers.
These firms tend to emphasize on well defined market position; that is specific customers. Furthermore, small businesses are advantageous compared to the large businesses in terms of focus and reputation. In terms of reputation, small businesses, due to their narrow focus, may develop high reputation for service and their quality. Nevertheless, a small business has its pitfalls including insufficient capital for start up, and maintenance of the business.
Small business owners have high levels of stresses regarding employee issues, competition, new equipment, and rent increases among others. They tend to operate alone; hence too much workload. In addition, such businesses have high rates of failure as compared to the large firms. This is because of lack of guarantee of effectiveness. Small firms also face a challenge regarding managerial incompetence or inexperience. They have poor management which result in businesses failures. There is also a disadvantage of inability to manage fast growth. Growth always expects the owner to delegate a certain amount of authority and this is always to do; hence, poor performance (Hatten, 2011).
Purpose of the businessThe intended purpose of the business involves a restaurant offering food and drinks. Some of the foods that the restaurant intends to offer variety various food and drinks, such as beverages and fast foods. The business’s mission is to offer the highest quality restaurant services in the region. The kind of food and drinks offered by the business will greatly boost the customers’ health statuses and improve their lifestyles.
Additionally, I intend to start the business in order to fulfill my dream of owning a business; a restaurant. According to prior market research, it is evident that the business is critical in the region because consumers have a high demand for high quality and affordable restaurant services and products.