Internal And External Factors Of Small Business

The CEO of this company began to take steps into making the company better. Both external and internal driving forces drove this change. The definition of these two terms needs to be looked at in order to understand what they were. External factors are the factors that occur outside the scope of the company or organization, for example, the economy. These factors are outside the influence of the company (Lindbald, 2014). On the other hand, internal factors are factors that occur within the scope of the organization and are within the control of the company.

The assessment of internal factors analyze inside the physical confines of the organization. These factors are within the control of the organization. The internal assessment considers plan implementation, structure, culture, innovation, diversity, ethics, processes and technology. All of the factors can have a grave impact on the success of an organization. This is why the planning function of management is so important. Technology is rapidly changing, and for a business to succeed it must change with the time to adapt to

Internal Factors: Internal factors are the factors within the company, which affects the success and operation of business. The company can control these factors. Effective internal management is the key to the successful business.

The internal factors are inclusive of the marketing mix of the organization and the organizational goals. The product itself is a huge

The purpose of this paper is to analyze the culture, the internal, and the external factors in an organization. Our job is to examine the entirety of the organization. That would include the structural and environmental elements that effect the operation of the business. We will also take an in depth look at the perspectives of employees, managers, owners, and clientele.

In the Academy Marketing Studies Journal, it states,“Since 2008 the number of small businesses using social media has doubles as their leader seek to create visibility and awareness, to identify and attract new customers, and to reinforce or change their companies respective perceived brand images.” Since marketing trends follow social media so closely, financial crisis can occur if businesses are unable to adapt to their target audience’s needs. If the business wishes to thrive and continue to evolve with modern trends, then an awareness of ever changing strategies is critical to success. Small business owners start off with a concept and a goal of meeting a need in their community to the best of their ability, however, recently large corporations have become more prevalent in meeting those same needs at a larger scale. Therefore, small businesses have encountered a higher number of crisis because they could not compete with the larger corporations. The Journal of Entrepreneurship Development states, “A system is considered to be strong when its smallest individual components are strong, self organized and controllable… a well organized small scale industry in the strong quantum for large scale production.” This article highlights a concept that the nations likelihood for experiencing financial crisis is attributed to the strength of its small scale industry. Small size enterprises have been especially hit hard by global crisis due to their size and limited resources, and

Internal factors: These are those that are under the control of the management of a firm, and they may be called factors related with business operations.

Small businesses play a vital role within the economy, for example even though most small businesses don’t have many employees those that do are able to employ millions of people and they are able to create at least 60% of new jobs (Williams, 2013). However in 2013 the report suggests that small firms account for 99.9% of businesses within the UK economy (Gov.uk, 2013). Small businesses are able to provide “33% of private sector turnover” found by Federation of Small Business figures cited in Williams, 2013. Small businesses are also able to create 65% of new jobs (see appendix 1). The great thing about small businesses is the new innovation that it comes with, they are able to provide new products

Markets (customers)-They are extremely useful commodity. Identify most valuable customers and do more trade with them. By using 80/20 rule, it suggests that around 80% of profit is gained from 20% of customers. Fletcher are building, getting and overseeing solid resource positions in centre markets.

In the period of the 1950s and 1960s the prominence given to the role of small business enterprise in the UK economy has been rewarded (Stanworth and Purdy, 2003). IN the economy of the UK 99.9 per

The internal factors included: management, age, and size, leverage, liquidity, number of employees, and so on.

In the modern world, where countries compete extensively, shaping the market towards dynamism, the government began to realise and acknowledge the vital existence of small and medium sized enterprises (SMEs) to maintain a healthy dynamic market economy. In 1911, Joseph Schumpeter, an influential economist, published In the Theory of Economic Development and highlighted that small entrepreneurial firms act as the seedbed of innovation and technology discovery, however in Capitalism, Socailism and Democracy, published by Schumpeter in 1942, contradict the statement and form the current accustomed concept that large corporations are the engine to the progression of economic development and possess the ability to accelerate innovation through the process of creative destruction (Nicholas, 2003). By the 1980s, the economy gradually evolved from production-based into knowledge-based and the government recognises and emphasised the prospective contributions of SMEs on economic performances (Doh and Kim, 2014). Though a consensus agreement that SMEs as a whole can have an impact on a nation’s economy was constructed, the subsequent measurement to support this understanding is difficult to attain. Nevertheless, the contribution and impact of SMEs to the economy cannot be disregarded and government should continue promoting this sector in order to maintain its position in the competitive global market context.

Small and medium sized firms play a prominent role in economic development (Osotimehi, et al. 2012). Hence it has been the underlining background to this study. The importance of SMES cannot be overemphasized in an economy. This is because they contribute to the creation of employment, free competitive market environments, inputs for large scale industries and so on. Drucker (1985) stated that entrepreneurship is not complete without the injection of innovation. In any business venture, the combination of innovation and entrepreneurship by an SME will need a very important spice of creativity to ensure a quick growth and development process in its environment. It is pertinent to understand that ‘creativity and Innovation’ are the engine house of economic growth. Creativity focuses on introducing a new idea/product/service Wyckoff (1991) and on the other hand innovation assist to turn the idea/product/service into a business that records success Heunks and Roos (1992). Entrepreneurship is simply about breaking new boundaries, introducing that which is entirely new or a modification of the existing ones. Entrepreneurs are commonly known as risk takers because of their ability to break frontiers without agitation or fear of loss.

The internal factor of the organisation that laid impact on the success rate of the organisation and the external factors of the organisation consists of various factors from outside of the company doors and you do not have much control on that factor.

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.