Description
Small business is an independently owned commercial entity p that has a simple structure and small impact on the overall market.
Developing A Small Business
i J i in Jamaica
Dr. William W. Lawrence
11
April 11, 2010
Contents
1. Small business issues
2. Managing product life cycle 2. Managing product life cycle
3. Managing turnaround
4 Conclusions 4. Conclusions
April 11, 2010
What is Small Business? What is Small Business?
Small business is an independently owned
commercial entity that has a simple structure y p
and small impact on the overall market
(Bolton Report, UK, 1971)
Small business development is the survival,
prosperity, and growth of entrepreneurial prosperity, and growth of entrepreneurial
ventures from startup through to full maturity
(Lawrence, J SBS, 2007/8)
33
Small Business Startups Small Business Startups
25
20
a
t
e
%
J AMAICA
CHINA
10
15
a
l
e
n
c
e
R
a
2005
2006
2008
USA
Mexico
5
P
r
e
v
a
0
Countries (30)
4
Data Source: GEM J amaica Reports
* Nascent and New Entities
April 11, 2010
Where are Entrepreneurs Investing?
Business Type 2005 2006
2008
Where are Entrepreneurs Investing?
N =2031 N =3554
N =2407
Agriculture, Forestry, Hunting, Fishing 8.1% 10.8%
21.0%
Mining, Construction 1.4% 0.6%
1.4%
Manufacturing 3.5% 7.3%
5.9%
Transport, Utilities, Storage 2.9% 3.7%
3.9%
Wholesale 11 0% 71%
4 5%
Wholesale 11.0% 7.1%
4.5%
Financial Services, Real Estate 1.2% 0.4%
0.3%
Business Services 2.3% 1.9%
2.8%
Retail, Hotels. Restaurants 54.2% 56.2%
52.4
Government, Health, Education, Social 1.2% 1.2%
?
Personal/Consumer Activities 14.1% 11.1%
7.8
Data Source: GEM J amaica Reports 5
/
Critical Issues Critical Issues
1. Necessity driven entrepreneurship has now surpassed
i d i hi opportunity driven entrepreneurship
2 Less startups are transitioning into established businesses 2. Less startups are transitioning into established businesses
3. Only 1.7% of established business owner?managers had y g
expectations that businesses will grow and create job
opportunities within the next five years
4. Losses and financial problems account for 64% of business
closures closures
April 11, 2010 Source: GEM 2008 J amaica Survey
Small Business Maturation Small Business Maturation
45
30
35
40
15
20
25
30
FIRMS
0
5
10
15
0
'1-4 '5-9 '10-14 '15-19 '20+
AGE (Years)
7 Lawrence, J SBS, 2007/8
April 11, 2010
Managing Product Life Cycle Managing Product Life Cycle
STAGE PRICE OUTPUT EXAMPLE KEY FACTOR
Startup Trial Uncertain Wellness Learning Startup Trial Uncertain Wellness Learning
Growth Rises Rises Telecom Supply
Maturity Falls Rises Beverage Demand
Decline Falls Falls Tobacco Appeal Decline Falls Falls Tobacco Appeal
April 11, 2010
Managing Turnaround g g
10
20
FIRM A
-20
-10
0
10
PROFIT
-40
-30
74 78 82 86 90
YEAR
FIRM B
YEAR
1. Assess decline severity
2 Boost net cash flow 2. Boost net cash flow
3. Compete on quality
99
4. Eliminate waste
5. Grow sales within sustainable limits
April 11, 2010
Conclusions Conclusions
1. Government policies on taxation and interest rates
should urge investment in real sectors of the economy should urge investment in real sectors of the economy
2. To transition from startup, entrepreneurs should manage
small businesses based on stage of product life cycle
3. For small firms to grow and create jobs, Government
policies should go beyond venture creation and growth
to provide turnaround help for mature and declining to provide turnaround help for mature and declining
businesses
4. Small business turnaround happens by focusing on cash pp y g
flow, quality and productivity
5. More business schools should include a course on
t rnaro nd management turnaround management
April 11, 2010
doc_631790398.pdf
Small business is an independently owned commercial entity p that has a simple structure and small impact on the overall market.
Developing A Small Business
i J i in Jamaica
Dr. William W. Lawrence
11
April 11, 2010
Contents
1. Small business issues
2. Managing product life cycle 2. Managing product life cycle
3. Managing turnaround
4 Conclusions 4. Conclusions
April 11, 2010
What is Small Business? What is Small Business?
Small business is an independently owned
commercial entity that has a simple structure y p
and small impact on the overall market
(Bolton Report, UK, 1971)
Small business development is the survival,
prosperity, and growth of entrepreneurial prosperity, and growth of entrepreneurial
ventures from startup through to full maturity
(Lawrence, J SBS, 2007/8)
33
Small Business Startups Small Business Startups
25
20
a
t
e
%
J AMAICA
CHINA
10
15
a
l
e
n
c
e
R
a
2005
2006
2008
USA
Mexico
5
P
r
e
v
a
0
Countries (30)
4
Data Source: GEM J amaica Reports
* Nascent and New Entities
April 11, 2010
Where are Entrepreneurs Investing?
Business Type 2005 2006
2008
Where are Entrepreneurs Investing?
N =2031 N =3554
N =2407
Agriculture, Forestry, Hunting, Fishing 8.1% 10.8%
21.0%
Mining, Construction 1.4% 0.6%
1.4%
Manufacturing 3.5% 7.3%
5.9%
Transport, Utilities, Storage 2.9% 3.7%
3.9%
Wholesale 11 0% 71%
4 5%
Wholesale 11.0% 7.1%
4.5%
Financial Services, Real Estate 1.2% 0.4%
0.3%
Business Services 2.3% 1.9%
2.8%
Retail, Hotels. Restaurants 54.2% 56.2%
52.4
Government, Health, Education, Social 1.2% 1.2%
?
Personal/Consumer Activities 14.1% 11.1%
7.8
Data Source: GEM J amaica Reports 5
/
Critical Issues Critical Issues
1. Necessity driven entrepreneurship has now surpassed
i d i hi opportunity driven entrepreneurship
2 Less startups are transitioning into established businesses 2. Less startups are transitioning into established businesses
3. Only 1.7% of established business owner?managers had y g
expectations that businesses will grow and create job
opportunities within the next five years
4. Losses and financial problems account for 64% of business
closures closures
April 11, 2010 Source: GEM 2008 J amaica Survey
Small Business Maturation Small Business Maturation
45
30
35
40
15
20
25
30
FIRMS
0
5
10
15
0
'1-4 '5-9 '10-14 '15-19 '20+
AGE (Years)
7 Lawrence, J SBS, 2007/8
April 11, 2010
Managing Product Life Cycle Managing Product Life Cycle
STAGE PRICE OUTPUT EXAMPLE KEY FACTOR
Startup Trial Uncertain Wellness Learning Startup Trial Uncertain Wellness Learning
Growth Rises Rises Telecom Supply
Maturity Falls Rises Beverage Demand
Decline Falls Falls Tobacco Appeal Decline Falls Falls Tobacco Appeal
April 11, 2010
Managing Turnaround g g
10
20
FIRM A
-20
-10
0
10
PROFIT
-40
-30
74 78 82 86 90
YEAR
FIRM B
YEAR
1. Assess decline severity
2 Boost net cash flow 2. Boost net cash flow
3. Compete on quality
99
4. Eliminate waste
5. Grow sales within sustainable limits
April 11, 2010
Conclusions Conclusions
1. Government policies on taxation and interest rates
should urge investment in real sectors of the economy should urge investment in real sectors of the economy
2. To transition from startup, entrepreneurs should manage
small businesses based on stage of product life cycle
3. For small firms to grow and create jobs, Government
policies should go beyond venture creation and growth
to provide turnaround help for mature and declining to provide turnaround help for mature and declining
businesses
4. Small business turnaround happens by focusing on cash pp y g
flow, quality and productivity
5. More business schools should include a course on
t rnaro nd management turnaround management
April 11, 2010
doc_631790398.pdf