In this report, a research shall be undertaken on the various issues that are faced by a SME, and how they manage to over come these issues. The aim of any business is to prosper and grow in size, and the aims that are usually kept in mind for a SME shall also be discussed in this report. A critical analysis of how a SME functions and their distinctive factors have been entailed in order to give the reader a proper understanding of all the functions of a small and medium enterprise. The purpose of this report is to give the reader an insight in a small or medium enterprise, and what are their technicalities and functionality level.
Firstly, an introduction has been given, which then follows in to the detailed elaboration of a small and medium enterprise and their complete functionality and business abilities. All the issues that are faced by a SME are discussed in detail as well.
A SME, or a small and medium enterprise whose head count fall below a certain level. For a small enterprise, the number of employees need to be less than fifty, whereas if the number of employees are less than 250, then the business is classified as a medium enterprise (European Commission , 2003)
A SME is usually run by a sole trader, and all profits go to him. ...
The number of SMEs in any small country would usually surpass that of the large numbers, but their limited profit potential often causes a hindrance for a SME to grow in size and/ or expand.
In this chapter, all the problems and issues that are associated with a small scale business have been discussed, including their aims and objectives and how these businesses function on such a small scale. Their main sources of finance, as well as profit capabilities have been discussed, as well as the ways by which these businesses tend to make money.
A small scale business is extremely important to the economy of a country, and this is because of the total accumulated profits of all such businesses that add up to form a significant part of the GDP and the GNP of a country (Small Business Start up Guide, 2010). Therefore, due to the significance of a small scale business, the government has introduced several laws by which they ensure that small scale businesses remain protected and are not harmed by businesses working on a larger level (Rosewood, 1995)
ii) Research Issues:
A SME functions on a very small level, and the employees that are usually working in a SME are quite illiterate or do not have the desired level of qualification that is needed. Commonly, a small scale business can be functional in several ways. For instance, a small handicraft business would be regarded as a SME. This is because i) the number of profits generated by a business are quite low and not consistent and ii) the number of employees that are working in a SME are lower than 50, which is the actual limitation set by the