Summary Small Business Management - Entrepreneurship (ENTP6212)

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,Table of Contents
THE FAMILY BUSINESS ...................................................................................................................................... 3
LO1: CONCEPTS PERTAINING TO FAMILY BUSINESS ........................................................................................................... 3
LO2: ADVANTAGES AND DISADVANTAGES OF A FAMILY BUSINESS ....................................................................................... 3
LO3: FORCES DRIVING A FAMILY BUSINESS ...................................................................................................................... 4
LO4: ROLES AND RESPONSIBILITIES WITHIN FAMILY BUSINESSES ...................................................................................... 4
LO5: MANAGEMENT PRACTICES FOR GOOD GOVERNANCE ................................................................................................ 5
LO6: SUCCESSION PLANNING PROCESS ........................................................................................................................... 5
THE BUSINESS MODEL AND THE BUSINESS PLAN: VISUALISING THE DREAM .......................................................... 7
LO1: BUSINESS MODELS' IMPACT ON STARTING AND GROWING VENTURES ........................................................................ 7
LO2: LEAN START-UPS AND RISK REDUCTION ................................................................................................................... 7
LO3: PURPOSE AND OBJECTIVE OF A BUSINESS PLAN ....................................................................................................... 7
LO4: REASONS FOR WRITING A BUSINESS PLAN ............................................................................................................... 8
LO5: IMPORTANCE AND DIFFERENCE IN WRITING A BUSINESS PLAN FOR YOUR BUSINESS................................................... 8
LO6: LAYOUT OF A BUSINESS PLAN .................................................................................................................................. 9
LO7: PRACTICAL ADVICE ON WRITING A BUSINESS PLAN ................................................................................................... 9
LO8: PITCHING THE BUSINESS PLAN............................................................................................................................... 10
LO9: RESOURCES FOR BUSINESS PLAN PREPARATION .................................................................................................... 10
THE MARKETING PLAN .................................................................................................................................... 11
LO1: DESCRIBING SMALL BUSINESS MARKETING ............................................................................................................ 11
LO2: ANALYSING KEY COMPONENTS OF A FORMAL MARKETING PLAN .............................................................................. 11
LO3: APPLYING THE MARKETING RESEARCH PROCESS IN A SMALL BUSINESS CONTEXT ................................................... 12
LO4: DISCUSSING VARIOUS TYPES OF MARKETING SEGMENTATION ................................................................................. 12
LO5: EXPLAINING DIFFERENT METHODS OF FORECASTING .............................................................................................. 13
BUILDING CUSTOMER RELATIONS.................................................................................................................. 15
LO1: DEFINING CUSTOMER RELATIONSHIP MANAGEMENT (CRM) .................................................................................... 15
LO2: EXPLORING THE BENEFITS OF CRM FOR SMALL BUSINESSES ................................................................................. 15
LO3: EMPHASISING THE SIGNIFICANCE OF EXTRAORDINARY CUSTOMER SERVICE ............................................................ 15
PRODUCT DEVELOPMENT AND SUPPLY CHAIN MANAGEMENT .................................................................... 17
LO1: RECOGNISING THE CHALLENGES OF SMALL BUSINESS GROWTH.............................................................................. 17
LO2: ASSESSING INNOVATION'S ROLE IN SMALL BUSINESS GROWTH ............................................................................... 17
LO3: ANALYSING THE PRODUCT LIFE CYCLE AND NEW PRODUCT DEVELOPMENT ............................................................. 18
LO4: ANALYSING THE BUILDING OF A BUSINESS'S TOTAL PRODUCT OFFERING .................................................................. 19
LO5: DISCUSSING PRODUCT STRATEGY AND ALTERNATIVES AVAILABLE TO SMALL BUSINESSES ........................................ 19
LO6: DISCUSSING HOW THE LEGAL ENVIRONMENT AFFECTS PRODUCT DECISIONS .......................................................... 20
LO7: EXPLAINING THE IMPORTANCE OF SUPPLY CHAIN MANAGEMENT IN A SMALL BUSINESS ............................................. 21
LO8: DISCUSSING MAJOR CONSIDERATIONS IN STRUCTURING A DISTRIBUTION CHANNEL ................................................. 21
PROFESSIONAL MANAGEMENT ...................................................................................................................... 22
LO1: THE ENTREPRENEUR'S LEADERSHIP ROLE ............................................................................................................. 22
LO3: THE SMALL BUSINESS MANAGEMENT PROCESS ...................................................................................................... 22
LO4: MANAGERIAL TASKS OF ENTREPRENEURS .............................................................................................................. 22
LO5: EFFECTIVE TIME MANAGEMENT ............................................................................................................................. 23
LO6: THE IMPORTANCE OF MENTORS AND NETWORKS .................................................................................................... 23
MANAGING RISK .............................................................................................................................................. 24
LO1: TWO DIMENSIONS OF BUSINESS RISK .................................................................................................................... 24
LO2: ANALYSING PURE RISK .......................................................................................................................................... 24
LO3: APPLYING THE RISK MANAGEMENT PROCESS ......................................................................................................... 25
LO4: RISK MANAGEMENT IN SMALL COMPANIES .............................................................................................................. 26
LO5: EVALUATING INSURANCE PROGRAMMES ................................................................................................................. 26
LO6: COMMON BUSINESS INSURANCE COVERAGE .......................................................................................................... 27




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, The Family Business

LO1: Concepts Pertaining to Family Business
A family business is defined as an organisation where the individuals who established or acquired
the business, or their descendants, significantly influence the strategic decisions and life course of
the business. These businesses can take various forms, including:
• Owner-managed businesses.
• Sibling partnerships.
• Cousin consortiums.
The three-circle model is a helpful tool for understanding the dynamics within a family business.
This model highlights the overlapping areas of family, business, and ownership.
Family concerns often centre around:
• The care and nurturing of family members.
• Employment and advancement within the business.
• Loyalty to the family.
Business concerns, on the other hand, focus on:
• The production and distribution of goods and/or services.
• The need for professional management.
• The effective and efficient operation of the business.



LO2: Advantages and Disadvantages of a Family Business
Family businesses offer several advantages:
• Strong family relationships: These bonds can provide support during challenging periods
of business change.
• Financial sacrifices: Family members are often willing to make financial sacrifices for the
good of the business.
• Unique identity: Operating as a family business can create a distinct identity that sets the
organisation apart from competitors.
• Community focus: Family businesses frequently demonstrate higher levels of concern for
their community and non-family employees.
• Long-term planning: Family businesses often have the capability to plan and prepare for
the long term.
• Emphasis on quality and value: These businesses often prioritize quality and value in their
products and services.
However, family businesses also face disadvantages:
• High franchise costs
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