Managing Small Business Essay Example

relatives. As the restaurant became profitable, the owner began retaining profits and experiencing business growth. Currently, the owner has no debts and fully owns the business.The restaurant is not registered, as there is no requirement for registration for a sole trader business. Sole traders also have no legal taxation liability. However, due to its high turnover, Albaik restaurant finds it necessary to keep a book of accounts.

Changes in technology and international market competition have resulted in significant shifts in the competitive landscape for small firms. These changes directly impact the strategic options and performance of small businesses. Competing in a sector known for high failure rates, small businesses often lack the resources or capabilities to establish competitive advantages or barriers to imitation.

To foster business development and growth, it becomes essential to cultivate unique bundles of resources that differentiate the business from competitors. Distribution of power within the company can be centralized or decentralized, depending on the top-down decision-making approach used. While the owner makes key decisions related to purchasing, selling, service, price fixing, and employee hiring, there are managers who maintain direct contact with the owner and exchange performance and problem-related information with them at least twice a day.The text highlights the importance of information flow in an organization, with managers acting as intermediaries between different levels. The owner of the business takes action based on feedback received through managers, which can enhance performance and productivity. In an example, the owner replaced outdated restaurant machinery promptly to improve productivity. The text emphasizes the significance of effective human resource management (HRM) in small businesses. It suggests that studying HR processes within small firms could bring valuable

insights to the field. Additionally, it emphasizes the importance of human capital in new ventures for their success. Overall, the text emphasizes that HRM can benefit both large organizations and small businesses alike by examining and implementing effective HR processes.Small businesses often struggle with growth because they lack HR policies, resulting in difficulty with developing and hiring personnel. The lack of human resource management education and knowledge among staff leads to unsatisfactory productivity and negatively impacts the firm's performance. Many small businesses only focus on short-term training for their employees, leading to a lack of motivation and absence of benefits beyond base pay. The owner's limited education and resistance to implementing new HR strategies contribute to these issues.One possible reason for this lack of knowledge about the benefits of human resource management may be due to the low level of education among workers, resulting in a lack of interest or understanding in challenging the current system. Instead, they accept it as the norm, which grants owners the authority to maintain existing policies within the business.

Adapting to the environment and strategically positioning oneself is becoming increasingly necessary for small business owners. They must respond to new trends, changing circumstances, and a dynamic market in order to gain a competitive edge. It is not enough to simply understand their specific sector; they must also have a comprehensive understanding of the entire market and be able to adapt to external changes while also leveraging the opportunities they present.

Strategic adaptation entails making changes to the products and services offered by entrepreneurs based on external factors. This requires entrepreneurs to identify new opportunities and seize them. However, this can only

be accomplished if they have a solid understanding of their industry.

In the restaurant business, there are various services and innovative proposals available. As a result, customers can easily switch from one restaurant to another if they find a more comfortable and welcoming experience. Albaik restaurant has continuously evolved its offers and services since its inception.Despite facing challenges in the beginning, the business owner remained hopeful and sought new ways to attract customers. The owner utilized their entrepreneurial skills and knowledge to benefit the business. According to Cranfield, there are four dominant types of management styles: strategists, heroes, artisans, and meddlers. These styles show the relationship between business founders and their organization. The first element focuses on routine management tasks such as analyzing figures and marketing. The second element examines the level of business skills possessed by key staff members. The owner prioritizes non-manufacturing functions and strategic issues, such as disinvestment, new product development, and acquisition. However, they still engage in management tasks. Most of the management team representatives are untrained and find these tasks unfamiliar. Strategists are considered highly desirable as they develop the team's management skills. Artisans have minimal involvement in routine management tasks.The individual primarily dedicates their time to the production of products or delivery of services, leaving little room for routine tasks such as model reviewing and performance analysis. In contrast to artisans, heroes assume leadership over a specific function in management, such as sales or production, without much involvement in other accounts. Heroes chiefly focus on business management due to lower employee knowledge levels. They are esteemed and treated as heroes for introducing fresh ideas to the company. If the meddler

fails to relinquish routine management tasks, they enhance their management skills through training or recruitment assistance (Barrow, 1998). Applying the Cranfield theory to Albaik restaurant reveals the implementation of an artisan relationship. Most managers prioritize overall progress and assigned work rather than efficiency and productivity. They dedicate attention to reviewing related work and analyzing their own performance. The restaurant owner personally conducts analysis and reviews while providing timely feedback; this denotes their management style. Managers lack authority to make changes without the owner's instructions or without contacting them. Insufficient qualifications hinder their ability to effectively analyze and review performance. Due to a lack of motivation for innovative ideas within the restaurant, there are no heroes or strategists present in the business.Despite this, the owner of the restaurant wishes to continue with the same process as it is beneficial for both him and the establishment. This is because the owner feels a lack of diversity in management styles. Millers are trained to be skilled workers and managers who strive to excel in their work and show progress, with the aim of receiving a promotion to higher positions. As a result, the owner of Albaik restaurant places great importance on management issues, which keeps him occupied with daily business management. He disregards the development or acquisition of new products, but is well-versed in all aspects related to the industry. The burden of management (as he is solely responsible for the business due to insufficiently qualified staff) prevents the owner from focusing on the concept of the restaurant.

When it comes to competitor analysis, there are numerous similar businesses in the restaurant industry that offer excellent service and

catering. However, the main distinction between them and Albaik restaurant is that Albaik solely focuses on providing national cuisine rather than dishes from various cuisines around the world. The restaurant does not engage in importing or exporting its services to other companies or cities. While there may be other restaurants in the area that employ similar manufacturing processes to Albaik, their strategies and marketing techniques differ.

To conclude, because the owner of the restaurant possesses a deep understanding of his business, he efficiently develops his knowledge.Unfortunately, despite its success, the Albaik restaurant lacks the application of comprehensive management theories typically seen in small businesses. This can be attributed to a lack of theoretical knowledge within the establishment, as there are no highly educated individuals involved in the business. As a result, they struggle to implement beneficial theories and further develop them. However, the owner possesses extensive business experience, granting them considerable power. To ensure effective management, it is crucial to hire someone with sufficient knowledge who can be responsible for overseeing operations. Given the restaurant's promising prospects in foreign markets, seizing this opportunity calls for the recruitment of skilled marketers. Ultimately, the restaurant owner should not solely focus on day-to-day operations but also think expansively and remain open to new ideas and strategies.