...African Journal of Business Management Vol.6 (44), pp. 10994-11002, 7 November 2012 Available online at http://www.academicjournals.org/AJBM DOI: 10.5897/AJBM12.342 ISSN 1993-8233 ©2012 Academic Journals Full Length Research Paper Common causes of small businesses failure in the townships of West Rand district municipality in the Gauteng Province of South Africa Solly Matshonisa Seeletse Department of Statistics and Operations Research, University of Limpopo (Medunsa Campus), P.O. Box 107, Medunsa, 0207, Pretoria City, South Africa, solly. E-mail: seeletse@ul.ac.za. Tel: +27 12 521 4291. Accepted 17 October 2012 The study examined the high failure rate of the small business in the West Rand region of the Gauteng Province, South Africa. The purpose was to investigate reasons for lack of sustainability of the small businesses of this region. The study was qualitative, characterised by exploratory and descriptive modes. Fifteen small businesses were interviewed using an interview guide (at Appendix). The reasons for their failure showed that these businesses mostly lacked in business understanding. They showed shortfalls in business and management. Recommendations covered suggestions for these businesses to improve understanding and practice of the modern business mechanisms, to approach local business colleges for working relationships and training, as well as to involve management consultants to revive them to start generating the needed revenue and minimum profits...
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...1.0 introduction A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. The legal definition of "small" varies by country and by industry, ranging from fewer than 15 employees under the Australian Fair Work Act 2009, 50 employees in the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs. Small businesses can also be classified according to other methods such as sales, assets, or net profits. 1.1characteristics of a small business Not every small business eventually grows to the size of large corporation. Some businesses are ideally suited to operate on a small scale for years, often serving a local community and generating just enough profit to take care of company owners. Small-scale businesses display a distinct set of identifying characteristics that set them apart from their larger competitors. Revenue and Profitability Small-scale business revenue is generally lower than companies that operate on a larger scale. The Small Business Administration classifies small businesses as companies that bring in less than a specific amount of revenue, depending on the business type. Employees Small-scale businesses employ smaller teams of employees than companies that operate on larger scales. The smallest businesses are run entirely by single...
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...MZUMBE UNIVERSITY (CHUO KIKUU MZUMBE) FACULTY OF COMMERCE PROGRAMME: MBA (CORPORATE MANAGEMENT) TASK: TERM PAPER SUBJECT CODE: BUS 5112 SUBJECT NAME: INTERNATIONAL BUSINESS MANAGEMENT NAME: MARIAM LIANA Introduction This paper explores the impact of pharmaceutical patent laws on Anti-AIDS drug, substantial controversy which has been generated around the globe on ethical grounds. Pharmaceutical patents on Anti-AIDS drug availability in the third world countries, focusing on an ethics of the Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement. It highlights the value of essential drugs and generic production in developing countries, using India, Cipla as a case study. It also explores global ways to deal with unethical grounds to TRIPs. History of Cipla, Indian Pharmaceutical Company Cipla is one of the world's largest producers of generic medicines.Cipla is one of India's top five pharmaceutical manufacturers. Although Cipla's primary market is India, the company sells its products worldwide. Cipla's lines of more than 400 drugs include anti-asthmatic, anti-cancer, anti-inflammatory, anti-depressant and anti-AIDS medications. Over the years, the company has developed strong research and marketing capabilities. In recent times, Cipla has attracted considerable media attention because of its efforts to offer AIDS drugs globally at very...
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...Introduction Management Information System (MIS) enables small business organization to focus on solving business problems and creating new opportunity with technology. In his article titled “The impact of Management Information System effectiveness on task productivity”, Trivellas explains that “management information system (MIS) is the basic tool to support planning and controlling functions of the managers in small business organization” (2013). He states that MIS touches almost all areas of business, such as manufacturing, accounting & finance, human resource and marketing. Trivellas conducted a survey to investigate the impact of MIS in small business sector such as banking. According to his survey, MIS provides necessary information for managers so that they can able to monitor the organization’s activities and make important decisions accordingly. On the other hand, many other authors state that while MIS provides several benefits to the organization, Trivellas fails to mention the issues and the challenges associated with implementing the MIS technology. The authors find that installing MIS can be expensive for small business organization. The organization should create a separate budget to ensure that the system is current. Trivellas ignore the fact that maintenance of the system is another issue that comes along with installing MIS. Companies should hire someone to keep the system operating effectively. This increases labor cost. Moreover, MIS...
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...“How we treat small business needs to be reevaluated in light of the accumulating evidence about its role in job creation” (Bee, 2004). Small businesses have generated sixty-four percent of new jobs over the past fifteen years. Over the past twenty-five years, they have generated sixty-seven percent of new jobs. Wherever the small business is located, it provides new job opportunities for the families seeking employment in the area. The creation of these jobs is greatly accepted throughout the entire community. Bee concludes that small businesses have higher survival rates than most people assume: Longitudinal research by the Small Business Administration concludes that two-thirds of small businesses survive for two years and about fifty percent survive for four. As researchers evaluated the longitudinal data, they concluded that these figures overstate the failure rate for small businesses since many closures are due to 1, mergers into larger firms or 2, voluntary closures by the owners who take a new job or otherwise terminate a profitable venture. If one makes adjustments for this cohort, the overall failure rate becomes twenty-four percent after two years and thirty-five percent after four years. Therefore, the jobs are still available for the most part. “The failure rate for small businesses varies with industry” (Bee, 2004). If there is no demand for a certain product or service in a specific area, a small business offering that certain product or service most...
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...efficiency enhancements that result, claiming that “in a free market, large suppliers of nearly everything will drive most small suppliers out of business.” Wal-Mart watch, one of the largest Anti-Wal-Mart organizations, features an academic article claiming that in Iowa, Wal-Mart’s expansion has been responsible for widespread closings of ‘mom and pop’ stores, including 555 grocery stores, 298 hardware stores, 293 building suppliers,161 variety shops, 158 women’s stores, and 116 pharmacies. Perhaps because of its size and success, unlike most other firms, Wal-Mart’s ability to open new stores is decided within the political process. State and local economic development authorities, and state courts, in most cases make the final decisions on whether to allow the entry of a specific new Wal-Mart store. These decisions are often influenced by arguments about the harm done to small businesses. For example, in her comments to a local reporter surrounding the city commission’s vote on allowing a new Wal-Mart store, Aberdeen, South Dakota city commissioner Pat Klabo stated “If this were a moral decision, we would have voted right away in favor of the ‘mom and pop’ stores.” Even President Clinton's former Secretary of Labor, Robert B. Reich, writes in the New York Times that Wal-Mart will turn “main streets into ghost towns by sucking business away from small retailers. These previous estimates of the negative impact of Wal-Mart on other businesses, such as the numbers cited...
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...The Corporations Role in Small Business Success Your Name Here English 122: Composition II Aimee Garten October 14, 2013 The Corporations Role In Small Business Success Devastation. This describes the state I was in when I walked into my favorite coffee shop and was notified by the owners that they would be closing the doors for good at the end of the business day. I had been going to Donut Connection, a small family owned business, for about a year. I had been loyal to Starbucks since my coffee drinking days began, but this place came highly recommended and it was right on my way to work. I was quickly enamored with their amazing customer service, and I have to admit, the coffee was better than Starbucks. As all good things come to an end, the Donut Connection had to close down for financial reasons. This was a shock to most of the regular customers and myself because the establishment was jam-packed every morning. But this poses the question: Are large corporations, such as Starbucks, responsible for the failure of small businesses? Because consumers appreciate great customer service, and small businesses dominate the economy, corporations should be looked at as nothing more than competition as small businesses are responsible for their own success or failure. A major reason why consumers shop small businesses is the family feeling they experience as well as superior customer service. People appreciate going into a business and being greeted by name and also knowing...
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...Assignment #5 - Business Succession Planning Dr. Kerry Lanza Entrepreneurship & Innovation – BUS521 12/11/2011 1. Discuss the current small business start up success and failure rate in the U.S. market. As of 2009, according to the U.S. Small Business Administration Office of Advocacy there were 627,200 in successful start-ups, 595,600 in business closures and another 43,546 in bankruptcies. According to the Small Business Administration, over seventy five percent of jobs are created by small companies; and according to the Bureau of Labor Statistics' (BLS) job-growth projections for small businesses in the next ten years are on the rise for the following categories: IT, employment services, management, home health care, childcare, and entertainment. However, the business closures and bankruptcies are staggering. The recent failure rates in the US are due to a variety of reasons; the greatest at this point is the global economic recession. 2. Discuss the red flags for a small business related to business failure and bankruptcy. Approximately fifty percent of company start-ups shut their doors in approximately four years. This is due business owners not recognizing red flags such as insufficient planning, meager cash-flow managing, undercapitalizing, and too much debt. Many businesses fail to due the appropriate market research which would have justified whether there was a demand for their service or product. A major red flag, yet one time and again overlooked...
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...Minorities Businesses Ownership in USA: Successes and Failures Dr. Habtalem Kenea, PhD OM 250 4/24/16 Minorities in business have increased rapidly in the last decade. Businesses that range from domestic to technological are often owned by minorities from all walks of life. Minorities aren’t always African American; there’s a wide spectrum of businessmen and women alike, from race to gender. Wikipedia defines minority business enterprise as “an American term which is defined as a business which is at least 51% owned, operated and controlled on a daily basis by one or more (in combination) American citizens of the following ethnic minority and/or gender (e.g. woman-owned) and/or military veteran classifications.” In 2007, more than one-fifth of the nation’s 27.1 million firms were minority-owned. Minority owned business owners in America have seen its fair share of successes, failures and potential for the future. “The U.S. Department of Commerce 1997 survey of Minority –Owned Business Enterprise reported that there were nearly 2.9 million minority – owned businesses in 1997, generating a projected 564 billion in revenue by 1999 and employing nearly 4.3 million workers.” (Fraser, 110) The rapid growth in the minority business enterprise has been beyond impressive. The activity in the minority sector show a varying and rather impressive percentage of growth among the diverse group of business owners. Hispanic –owned businesses were the most successful overall minority...
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...Summary: When you're starting a new business, the last thing you want to focus on is failure. But if you address the common reasons for failure up front, you'll be much less likely to fall victim to them yourself. Here are the top 7 reasons why businesses fail and tips for avoiding them. According to statistics published by the Small Business Administration (SBA), seven out of ten new employer establishments survive at least two years and 51 percent survive at least five years. This is a far cry from the previous long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years. Better success rates notwithstanding, a significant percentage of new businesses do fail. Expert opinions abound about what a business owner should and shouldn't do to keep a new business afloat in the perilous waters of the entrepreneurial sea. There are, however, key factors that -- if not avoided -- will be certain to weigh down a business and possibly sink it forevermore. 1. You start your business for the wrong reasons. Would the sole reason you would be starting your own business be that you would want to make a lot of money? Do you think that if you had your own business that you'd have more time with your family? Or maybe that you wouldn't have to answer to anyone else? If so, you'd better think again. On the other hand, if you start your business for these reasons, you'll have a better chance at entrepreneurial success: * You have a passion...
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...LESSON 5.4 - The Advantages of Computers in Business ✓ Innovations in computer technology have revived and revolutionized business both in local markets and worldwide. ✓ The advantages computers provide to small businesses and major corporations alike are many. ✓ Computers have made it possible for small companies to expand into larger markets. ✓ Computer use can provide a business: Multitask Capability ✓ The computer's use as a multimedia tool allows businesses to be more independent. ✓ Computers link various technologies such as interactive video, CD-ROM, audio, graphics, printing and faxing capability, and various programs that can handle highly complex tasks. ✓ This can eliminate the need for outsourcing by allowing staff to handle jobs that would have previously been given to external parties. ✓ This keeps the majority of company operations in-house and empowers the business to be more self-sufficient and less vulnerable to failure due to mistake by outside parties. Cost Effective ✓ Emerging innovations make for a more affordable technology that can be used by companies to cut costs both for office equipment and staff payroll. ✓ Potentially profitable corporations can be started with little overhead cost. ✓ Email decreases heavy postage costs, videoconferencing may reduce the cost of travel and for many businesses, and software eliminates the cost of employing costly accounting departments. ✓ All of this trickles down to the consumer...
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...Preliminary Business Studies Assessment Task 3 Notification SCEGGS Darlinghurst Preliminary Business Studies Assessment Task 3 Notification BUSINESS STUDIES PRELIMINARY ASSESSMENT TASK Assessment Task 3 Notification Assessment Task 3: A BUSINESS REPORT Date Issued: Wednesday 6th May, 2013. Subject: Preliminary Business Studies, Topics: 1-3 Title of Task: Business Report on an SME Weighting: 30% Due Date: Part 1 - This should be presented to your teacher by Friday 17th May (Wk 3). It may be presented as either one page of notes or a one page mind map. Part 2 - Tuesday 11 June 2013 (in your lesson), 2013 Term 2, Week 7 (PF- P4, MW-P3) Component: Inquiry & research, Communication of business information, ideas & issues in appropriate forms, Knowledge and understanding of course content Outcomes: P1 discusses the nature of the business, its role in society and its legal structure P2 explains internal and external influences on business P3 describes factors contributing to the success or failure of small to medium business enterprises P4 assesses the processes and interdependence of key business functions P6 analyses the responsibilities of business to internal and external stakeholders P7 plans and conducts investigations into contemporary business issues P8 evaluates information for actual business situations ...
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...Right Business for You If you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: start a venture you know intimately. Know the ins and outs of the business Don’t fall into the trap of starting a particular business just because someone tells you, “It’s a sure thing.” Potential customers will part with their hard-earned money only if you convince them that they’re getting their money’s worth, so you’ll need to know what you’re doing, no matter what the task. Choosing a business you know Starting a business in which you already have experience has many advantages. You can use your knowledge about the industry, your training and skills, and your network of contacts, who might help you find financing, suppliers and customers. Example For ten years Steve worked for several different construction companies — first as a journeyman carpenter and then as a project manager. When he got the itch to start his own business, it made perfect sense for him to start a small contracting business specializing in home-improvement. He knew the industry well, including the best places to buy supplies and what he could charge for services, and he had the required skills, such as how to estimate and bid jobs — and it didn’t hurt that he knew how to pound nails as well. The contacts he had developed over the years were glad to talk to him about running a small contracting...
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...not as a set aside for small business concerns. Prior to July 7 deadline Information Ventures submitted protest on June that the contract officer failed to perform adequate market research prior to deciding to solicit on an unrestricted basis. 3. Issues: Twenty business concerns requested a copy of the solicitation by the June 4 deadline, six were small business. By the July 7 deadline, four firms submitted capability statements, three were small businesses and one was a large business. The contract officer only reviewed the GSA Advantage online database and consulted the contracting technical representative. The GSA database pulled five contractors (three small and two large) all responded they could not perform the requirements requested by MMS. The technical representative suggested contacting Action for Healthy Kids volunteer coalition. The coalition responded they could not perform the requirement requested by MMS, either. The contracting officer deemed these sources as sufficient market research and felt no more than two or more small businesses could perform the requirements being asked, only due to other commitments and not due to lack of ability. The contracting officer moved forward with issuing solicitation on an unrestricted basis and not set aside for small businesses. 4. Decisions (Holdings): Protest is sustained by General Counsel, Anthony H. Gamboa, recommend the solicitation be cancelled and re-issued as a set-aside for small businesses after conducting...
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...Tuesday, June 19th Response & Resumption Potential Damage There are many threat that we us a small business has to be aware of and understand because if we don’t we will surely be a main target for potential catastrophic events such as, natural disasters, fires, floods, power outages, or even acts of terrorism. These kinds of catastrophic events need to be prevented or minimize so that it would not hurt our physical or digital assets. Even though many small businesses have some type of plans to minimize the physical damages when these type of even occurs; however, many of small companies usually overlooked or fail to safeguards the digitals damages. Managing the Business Risk Small company like us would require having some type of contingency plans and insurance polices so that we could deal with catastrophic events that might affect our business. In addition, to minimize the risk of unforeseen events when it occurs we would surely required to take out the insurance policies that we have to protect and minimize the assets that were lost, should we unable to cover the lost. Also, determining the cost of the protection plan is very important because if the plan cost more, than the plan is a failure and we should come up with a better plan. Digital and Physical Protection Plans The plans that are made for the company should be effective so to ensure that the protection plan works effectively we would need to come up with good strategy like: Consulting...
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