1. Small business management and Entrepreneurship
David Stokes
Nicholas Wilson
Small Business Management and Entrepreneurship
Fifth Edition

2. Lecture outline Successful small business strategies
What is a strategy?
New venture strategy
Survival strategy
Growth strategy
A composite model

3. Strategy
Strategy can be described as either being a plan, pattern, perspective that brings together an organization’s major objectives, policies, and activities into a cohesive whole.
Objectives represent what is to be achieved
Policies are rules or guidelines with define limits
Activities are detailed actions necessary to achieve objectives

4. Deliberate strategy
Strategy may be formulated as a deliberate plan of stated, or unstated, intensions. Some entrepreneurs produce a business plan before startup, which sets out their intended course of action

5. Emergent strategy
Some strategies are not conceived in advance but emerge as a consistent pattern during the course of events.
Marketing approaches which are often on a reactive basis until a pattern emerges
Management strategies, especially those involving people, often emerge as unplanned reactions to factors previously unknown.

6. Realized strategy
Strategies which are usually a mixture of deliberate and emergent strategies.

7. New venture strategy
Entrepreneurs and small business founders face several problems when starting a new venture most important being the shortage of resources. This forces the founder to exploit a particular strategy which has been termed asset parsimony. The so called “parsimonious path to profit” can be categorized in the following ways:
Never buy new what can be bought second hand
Never buy what can be rented
Never rent what can be borrowed
Never borrow what can be begged
Never borrow what can be salvaged

8. Opportunity recognition
Competitive advantage or profitability

9. Survival strategy Critical factors in closure of small businesses
Insufficient turnover
Poor management and supervision
Lack of proper accounting
Competition
Not enough capital
Bad debts
Excessive remuneration to the owners

10. We can also categorize the causes in terms of:
External influences
Internal factors

11. Management, marketing and money
Factors which are controllable by the owner-manager
Management – concerned with the effective and efficient use of resources
Marketing – represents relationship of the enterprise with the customers
Money – enables the whole system to work

12. Strategies beyond survival
The strategies will depend on the objectives of the enterprise.
Motives can point to one strategy which is opposed by money or management
Management considerations may indicate a strategy which is opposed by the motives of the owner
Marketing strategies may run counter to motives
Money influences may be diminished by personal motives.