Description of small and medium scale business
Business enterprise can be classified in various ways using different parameters. Some of the known parameters used in classifying businesses include: their sizes, their nature and modes of operation, their location and area of coverage, their asset base, as well as their capital base. These attributes have resulted in businesses being classified as small, medium and large scale. The Small and Medium scale Enterprise (SMEs) make up a vital part of our business systems today and employs more people than the government and large enterprises.
In Nigeria, the small and medium enterprises provide the most important vehicle for both the government and large scale enterprises to thrive. The SMEs are more commonly involved in trading, provision of services and craft -production activities. The SMEs in Nigeria contribute significantly to the national economy and growth by the volume of employment they provide to the citizenry and by the amount of tax revenue it remits to the national coffers.
Small and medium enterprises (SMEs) also called small or medium – sized businesses (SMBs) are companies whose personnel numbers fall below certain limits.
There are three broad parameters which define SMEs:
- Micro –entities are companies with up to 10 employees
- Small companies employ up to 50 workers
- Medium-sized enterprises have up to 250 employees
Competencies required in setting up a small and medium scale business
Competencies are personal and professional skills that cannot easily be measured. Some examples of these skills include accountability, ethics, and competitiveness. Some of the most important competencies required in setting up a small and medium scale business are as follows:
- Focus
In setting up a small and medium scale business an entrepreneur must focus on his/her long- and short-term goals and tasks must align with the business’s mission and vision. Mastering this core competency means being able to effectively visualize, develop, and communicate your mission and goals with your entire team. Establish your primary focus and make sure that your entire team understands how each of their roles aligns with the end-goals of your company.
- Entrepreneurial Empowerment
Startups are filled with entrepreneurial individuals who believe in their work and want to make a significant contribution to their company and community. Take advantage of their talent and vision by empowering them to make a difference in your company. Allow them to set their own goals that are consistent with company goals, and give them the freedom to do their jobs and resolve issues according to their own work style. Help employees feel confident in their ability to be successful in their jobs, make decisions, lead others, and give them ownership of their responsibilities. In a startup where many employees are busy with multiple responsibilities, the ability to work independently and effectively is essential.
- Communication
Make sure that all of your employees are well informed by putting multiple strategic communication channels in place (email, newsletters, etc.). Invest time in communicating information regularly and consistently. If your startup is based virtually, invest in project management software. If your startup is office-based, have meeting rooms and inspire a culture of open collaboration across the floor. Ensure that everyone is kept informed about new developments, even if they are on other teams, and that all information shared is professional and appropriate.
- Opportunity Recognition
Employees in a startup should be adept at recognizing and seizing profitable business opportunities, such as potential new clients, suppliers, and partners. And they should be able to take calculated risks to pursue the kind of valuable opportunities that will lead to achieving business goals.
- Innovation
Startups need to be agile and innovative. The capacity and desire to develop and support something new is one of their great strengths. In order to be innovative, startups need employees who are personally invested in developing new products, services, methods, or approaches. They should actively propose new ideas and technologies to better accomplish your goals. This kind of non-technical competency also involves working well with others in order to innovate.
- Stress Management
Startups are often high-stress environments, especially since one employee is likely to be in charge of multiple jobs. Startup employees need to have diverse skills and be able to handle many projects, clients, and tasks at once. This means that being able to efficiently function when under duress is important for startup work. In addition to being able to remain calm under stress, employees should also maintain self-control, even when being provoked. Finally, having this type of non-measurable competency also entails an understanding of self; employees should know their limits and manage their own behaviors to avoid or reduce stress.
- Flexibility
In order to succeed in a startup environment, employees need to be flexible in terms of their willingness to try new and different tasks and approaches. They must be open to others’ perspectives and be able to switch between strategies and methods when needed.
Skills required in setting up a small and medium scale businesses
Without beating about the bush, below are five important skills required in setting up a small and medium scale enterprise:
- Personal Skills
The first skill you must develop in setting up a small and medium scale business is your personal skill. Personal skills are simply those skills that are attached to your personality, more like habits. They are the characters possessed by successful entrepreneurs. For instance; if you are a professional proofreader, then it’s important you develop a keen eye for spotting errors. You have to be in the right mindset before ever starting a business. Being in the right mindset entails you have abandoned the get rich quick mentality and above all, you must have integrity.
The most important thing in your business relationships is your reputation for honesty. If you can genuinely and sincerely fake honesty, you will be a success. Never doubt it. If you carefully study the lives of successful entrepreneurs, you will observe they are courageous, passionate about their entrepreneurial calling and most of all, they think outside the box.
- Communication skill
The next important entrepreneurial skill you need to develop is communication skill. A famous speaker once said that the fact that you are talking doesn’t mean someone is listening. To be a successful business owner, you must be a powerful communicator.
- Negotiation skill
In the course of building a business, you are bound to negotiate deals. You negotiate with customers and suppliers over goods and services offered. You negotiate with bankers over bank loans terms and conditions, just as you negotiate with investors over equity and stakes. If you cannot negotiate, you will end up getting good deals at exorbitant prices or worse still, you will get nothing. So if you cannot negotiate, if you lack persuasion skills; building a business may just be a dream to you. Negotiation or persuasion is an art that can be learned, all you have to do is to devote your time to learning it and you will become a master at it.
- Leadership skill
In business, leadership skill is not an option. It’s a necessity. Business is all about your relationship with people. It entails uniting people with different backgrounds, beliefs and skills to a common cause. It entails forging people with different skills and ideologies into a business team. Good leadership consists of showing average people how to do the work of superior people. Building a successful business therefore requires you become an excellent business leader.
Business is not just doing deals; business is having great products, doing great engineering and providing tremendous service to customers. Finally, business is a cobweb of human relationship. Successful entrepreneurs were not born business leaders; they were made. They became business great leaders because they desired it; they humbled themselves and learned the art and science of leadership. Today, they are leaders in their game with a huge number of followers.
- Sales skill
A man’s success in business today turns upon his power of getting people to believe he has something they want. Success in business is also all about selling; you must first sell yourself to your investors, next to your suppliers, your business team and employees and then to your customers. The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.
References
Akpokerere, O.E (2009): Small and Medium Scale Business Enterprise:Vehicle for Economic Development in Nigeria , International Journal of Business and Common Market Studies, vol.6 No. 1&2.
Ekezie, E.E (1995): Small Scale Business in Nigeria: The Financial Solution”. The Nigerian Accountant, Vol.28 No 3.
Iromala, R.U (2006): Small and Medium Scale Business Development, Lagos; Cedar Trust Venture Ltd.
Izedomi F. (2006) Sourcing Finance for Start-up and Existing Business in Nigeria: Prospects and Challenges. ICAN Student Journal, Vol. 10, No 2.
Jamodu, K. (2001): Small Business Enterprises, Lagos, Elfoda Ventures.
