Importance Of Management In Family Owned SME'S Businesses

Importance Of Management In Family Owned SME'S Businesses

Table of Content

Introduction3

Characteristics of SMEs4

Analysis of Literature Findings10

Communication of Literature Review Findings11

Range of Personal Skills13

Conclusion13

References14

Development of SMEs

Introduction

The main purpose of this paper is to make discussion on the importance of management in the family owned SME businesses. SMEs are small businesses which companies start on small and medium basis. These are normally the family owned businesses, and it does not require much capital to employ. The category of small and medium enterprises (SMEs) is made up of enterprises which employ fewer than 250 people, and have a turnover less than the annual 50 million Euros or a balance sheet total not exceeding 43 million Euros.

Literature Review

This paper is intended, or orientation guide for entrepreneurs of Small and Medium Enterprises, regarding the effectiveness of business management, so that your business can achieve their goals and objectives, in other words, to achieve the success they expect.

Differences between small and large firms have long been recognized. Firm size is as a key factor in strategic literature. In contrast to large firms, SMEs have limited financial and managerial resources, which may impede growth and foreign expansion. It is believed that small businesses and large businesses are different species (Jones, 2003, p. 35). Although there is no generally accepted definition of a SME, entrepreneurship literature most commonly uses the definition provided by the Small Business Administration. The SBA defines SMEs as independent enterprises with less than 500 employees. Use of firms with fewer than 500 employees for classification as a SME is congruent with SME characteristics deemed appropriate by researchers and in accordance with the North-American Industrial Classification System (NAICS) (Harvie, 2002, p. 109). According to an in depth examination of SMEs, the established definition of a SME is a smaller firms employing 500 or less employees, and/or having sales turnover less that $25 million U.S. dollars.

Characteristics of SMEs

The definition of micro, small-sized enterprises-SMEs varies depending on country or region. For example, in Australia as micro enterprise is defined as if you use 1 to 4 people small business if it employs between 5 and 19 employees and medium enterprise if it employs between 20 and 199 people. European Union defines micro, small and medium enterprises - SMEs by making a categorization of these businesses in terms of the number of people working on it and the income earned in the business (Haahti, 1998, p. 160). Some characteristics of micro and small development organizations software is given below:

1.They have a flat organizational structure and have a flexible internal organization.

2.The leadership style encourages entrepreneurship and innovation. They have specialized departments.

3.They have limited financial resources, and the return on investment is short term. Rich in intangible assets and virtually have no tangible assets. Little access to bank financing and usually cannot afford to invest in consultants.

4.The number of employees is small and performs multiple functions. There is specialization of roles. The responsibilities are not well ...