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Small Business Management: Opportunities and Challenges Essay

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Updated: Jun 3rd, 2020

Small businesses have different opportunities which they can exploit in their target markets. Small business owners need to be able to turn their ideas into practice. Hatten (2011) reveals that they need to identify needs that exist in potential markets and come up with plans on how they can satisfy them (pp. 75-77). Business owners need to find suitable locations suitable for the type of businesses they want to start. The location chosen should allow customers easy access to the business. A business owner should have targets on what he wants his business to achieve after a specific period of time. The business owner needs to identify ignored opportunities in a market and how they can be of benefit to his firm.

It is important to have a plan on how and what needs to be achieved by the business. Small business need know how to make their presence felt within their target markets. They should have a clear understanding of customers’ needs and how they can fulfill them. This approach guides them on the marketing approaches they need to use to reach out to potential customers. Small businesses can rely on word of mouth from satisfied customers to build positive reputations in the market (Moore, 2008, p. 64). They do not need to spend a lot of funds in advertising campaigns which their businesses cannot sustain.

Small business preference programs are offered to businesses seen to be disadvantaged in the market. These programs make small businesses to be given preferential treatment during public procurement procedures in public agencies. Vagstad (1995) argues that these programs are unfair because they go against the principle of free markets forces (pp. 284-286). These programs do not offer a level playing field for businesses offering the same type of goods and services in a market. All firms that seek business opportunities in public agencies need to be considered fairly during procurement processes. All procurement received bids need to be considered without bias for the process to be transparent. Public officials need to be accountable and offer equal opportunities to all businesses to bid for procurement services being sought.

Preferential business treatment for small businesses is unethical and can be manipulated to suit the interests of a few. Public agencies that seek bids from business owners need to advertise in the media to ensure that all interested parties are able to access the information. The information provided needs to define the nature of the procurement, how to deliver the bid and the criteria used to evaluate the received bids. A transparent public procurement process makes taxpayers confident that public funds are well managed. Small business preference programs are unjust and open up possibilities for corrupt practices in public agencies (Hastard, Rothkopf & Fu, 2003, pp. 73-76). Officials of public agencies can use proxies to award themselves lucrative public contracts at inflated prices. The favored business owners may not have the expertise required to meet the specified conditions of a contract.

In conclusion, small businesses need to understand the markets they operate in to devise strategies that can make them competitive. They should be aware of advantages, problems and opportunities that they are likely to encounter while operating. They should make all their operations fair and transparent to ensure that they build a positive image and reputation in the market.

References

Hastard, R., Rothkopf, M., & Fu, Y. (2003). Is subsidizing bidders actually costly? Management Science, 49 (1), 71-84.

Hatten, T.S. (2011). Small business management: Entrepreneurship and beyond (5th ed.). Mason, OH: Cengage Learning.

Moore, C.W. (2008). Managing small business (14th ed.). Mason, OH: Cengage Learning.

Vagstad, S. (1995). Promoting fair competition in public procurement. Journal of Public Economics, 58, 283-307.

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