A Brief Note On Uk And Eu Small Business Policy

The year 2014 holds signs of economic recovery and growth for small businesses. On average there has been an increase in employment per business which

The role of entrepreneurship in the economy of a country is to inspire new business ventures that support wealth

The Bolton Committee (1971) sought to define small enterprise by the following criteria: they own a small market share, are managed by owners or co owners and operate independently of any large firm (as cited in Bach, 2007, p.15). Bach (2007) concluded that, in an effort to survive against the influence of larger businesses with their expanded budgets and reach, these small businesses must rely on their ability to innovate and segment the market. These enterprises are critical for employing workers across the job market and further spurning competitiveness (Bach, 2007). Gruber (2004) noted that, in addition to limited financial resources, small and new businesses are often restricted by the uncertainty of market predictability and marketing planning. Doyle’s research surmised that due to these externalities the process of building credibility and establishing competitive advantage - regarded as one of the most important determinants in early success - could most effectively be achieved through unconventional means (as cited in Gruber, 2004, p.188). This entirely different approach, in which large ad budgets don’t exist, has numerous benefits.

Studies before anticipated that SMEs and NGOs would be disproportionately negatively impacted by the reform as compared to other firms, mainly because of their size (lack of resources

To prosper, small enterprises need comfortable business environment and regulations, adequate basic infrastructure services, access to short and long-term financing at reasonable rates, equity and venture capital, advisory support, and knowledge about market opportunities (Lukács, 2005). They typically suffer from weak entrepreneurial skills as well as deficiencies in accounting, production management, and business planning. As small enterprises develop, they increasingly need connectivity to export markets and the world economy (Lukács, 2005).

All these SME’s were never involved in returns of this category. Remaining 15 percent had sometimes to mostly returns for reasons of ‘End of useful life’. On further filtering the data these returns were observed mostly in SME’s in food and chemical related businesses. These could be for consumer safety, maintaining good business relationships with customers or due to statutory reasons.

Government may use our study as a point of reference when setting policies concerning the SMEs sector.

In Kenya, SME’s are vital as they employ more than 87% of the labor force that contribute 18.4% of the National Gross Domestic product (GDP). (GOK, 2009).However, their existence in the Kenyan economy has not been without fair challenges that inhibit their growth, potential and offer them an average lifespan of five or less years in existence.

In the context of small to medium enterprises, statistics show that about half of new businesses fail within five years (Anderson 2014). The reasons for why new businesses fail have been a number of reasons. Some of them are due to high interest rates, taxes, and lack of bank lending (Anderson 2014). In the UK sector, it has been noted that the chances of a new business from flourishing is even harder than before the financial crisis (Anderson 2014). With the countless amount of reasons for why SMEs do not prosper

Currently, SME’s in Kenya employ more than 87% of the labor force that contribute 18.4% of the National Gross Domestic product (GDP), (GOK, 2009).However, their existence in the Kenyan economy has not been without fair challenges that inhibit their growth, potential and offer them an average lifespan of 5 or less years in existence. (Bowen, Morara, & Mureithi, 2009)

SME is an acronym of Small – Medium Enterprises. An enterprises size is defined, in EU Law, by its number of employees and either the turnover or balance sheet total. A small enterprise has 50 employees or fewer and a turnover of € 10 million or less or a balance sheet total of € 10 m or less. A medium organisation has 250 employees or less and a turnover of € 50 million or less with a balance sheet total of

SME is a small business, which is differs with big companies. The definition of SME in one country may be different between other countries. Each country has its own consideration to classify a business as SME. Gilaninia, Danesh, Amiri, Mousavian and Eskandarpour (2011) mentioned that the criteria of business that can be categorized as SME,

The purpose of this report is to introduce an overview about SMEs. A critical evaluation and analysis of two small and medium enterprises, Icosium and NotontheHighStreet.com will be presented in this report and also will include the following steps: the business concept and sources of competitive advantage, the current demand and the competitive environment, the growth and development of the business to date, the challenges of managing and running the business, an estimate of the current valuation of the business, the SMEs current growth and development strategy and future recommendation. Furthermore in work will include a conclusion and recommendation.

The European Commission states that “the criterion of the number of staff as the main criterion, however, introducing a financial criterion is nonetheless a necessary adjunct in order to grasp the real scale and performance of an enterprise and its position compared to its competitors” (European Commission: 2003, item 4). Figure 1.0 below is an illustration of SMEs definition by the European Commission.

The importance of small and Micro Enterprises (SMEs) in the economy of any country cannot be overlooked. In fact for nearly 15 years, most researchers dealing with economic planning have highlighted the significance of these enterprises stating that they are a key player in realizing any country’s economic goals. As such, governments as well as other organizations with interest in development are laying plans and strategies to promote the establishment of Small and Micro Enterprises. This is seen as a move to ensure that there is full participation of SMEs in the country’s economy. The Small and Micro Enterprises have been known to contribute to a large extend as a source of innovation, entrepreneurial skills as well as source of employment. For example, statistics in 25countries of the European Union show that 99% of the jobs provided to its citizens come from the micro, small and medium-sized enterprises. Rowe (2008) points out that the British economy relies heavily on the participation of SMEs. On the other hand, 99% of the UK’s economy is composed of small and micro enterprises.