TheCable

BY KUNLE ADEBUNMI

People, at some points, start up a business venture, but it is germane for the owner to understand which classification his/her business falls under -start –up, micro business, small business, medium sized business etc.

While classification of businesses has been done by various governments of different African countries basically for taxation and policy plans, many governments till date find it difficult to define and classify small businesses, possibly as a result of real time research. The inability to come up with a definition may be the reason small businesses do not get financial assistance and the enabling environment to operate successfully in Nigeria.

Every entrepreneur is expected to be sure of where their business falls per time. This little knowledge will assist the owner consciously move his/her business forward at the right pace. Little or no knowledge by most entrepreneurs is responsible for most small businesses dying in their first three years.

The definition of small business should be based on the size of your employee, annual turnover, working capital, assets, revenue e.t.c. The truth is that most of the small businesses don’t actually have employees. They provide income to their owners, but by definition are not job creators. Many of these businesses exist largely to support a family and are not principally focused on expansion. Other yardstick that may be used to define it is the location of the enterprise and also its ownership type. A small business is typically owned by an individual and it operates privately. It could be based at the owner’s home or at a location that does not occupy so much space.

A business may also be small in the context of the economic environment it operates from. Some businesses are small because their products and services impacts only on a small pool of customers either within their community or scattered around one state and the other.

Another way to know is when the small business does not even have any existing major source of funding. Unfortunately, it has to depend on crude survival strategy to remain in the industry it belongs. Majority of the firms and business organisations that exists in Nigeria are individuals seeking to earn a living through entrepreneurial endeavour. In clear terms, a small business is not expected to run unnecessary expenses as if it has the capacity of a medium sized business.

What your business may lack that makes it a small business: Knowledge / information, advice and counseling, networking, branding, referrals, advisory partners, basic and targeted business planning, training, mentoring, funding, leverage, management, strategic planning e.t.c

Adebunmi has helped a few organisations run and manage their businesses at managerial capacity level. He works as a small business advisor, technology enthusiast, entrepreneur, consultant, SB analyst.

He is the founder of Mooregriz Global. You can find specific information on small business citadel and other involvements at http://www.kunleadebunmi.com