Why Small Business Must Focus on Production ?

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Why Small Business Must Focus on Production ?

Small businesses are businesses that have a workforce of less than 10 people, usually carried out by fellow friends or family. Small businesses are often carried out by people as a side job.

ADVANTAGES OF SMALL BUSINESS

Small businesses have the following advantages:

1. Speed ​​of innovation
The strength in running a small business business is that there is no hierarchy and controls that are too rigid like most large companies which make their workers have wider movements and can contribute their ideas. Businesses with small scale and more freedom than big business make their workers freely channel creative and innovative ideas. Not only that, new products and ideas can be designed, worked on and launched almost immediately.

2. Creating jobs
Owners are not the only people who benefit from building small businesses. The government and the community also benefited a lot from this business. Because with the large number of small businesses growing, more jobs are created and also an increase in domestic income.

3. Focus in one area
Small businesses are not obliged to always keep up with market demand like a large company that always follows the current growth era. This business can focus on one particular business field. To develop its business, owners can present innovations or creative ideas that can be applied to products sold. For example, a home-based craft business can focus on working on a particular model or type of craft and sufficiently serve certain consumer demands to achieve profits.

4. Freedom to determine prices
Small businesses have more power in determining the price of goods and production of services compared to large businesses. This is because small business owners themselves hold assets and sources of wealth as well as production products so that they are more flexible in determining the prices of goods they sell to the market.

5. Operational flexibility
Small businesses are usually managed by small teams, each of which has the authority to determine decisions. This is what makes the movement in the small business business more flexible and makes the employees who work have more space to grow. In addition, the speed of reaction of this business to all changes such as product trends or consumer tastes is quite high, so that these small-scale businesses are more competitive.

6. Low operational costs
Most small businesses work from their respective domiciles without having a fixed office space. Even so, this can also be an advantage in small businesses. Because the operational costs incurred by the company are not too large.

DISADVANTAGE OF SMALL BUSINESS

But on other side, there are also disadvantages of small businesses, such as:

1. The minimum budget and financing
Small-scale businesses usually have smaller budgets than large companies in running their businesses. This is because the source of capital budget is usually only sourced from business owners. The source of funds of the business owner itself can be various such as personal savings or loans. Therefore, small business entrepreneurs must manage the budget as efficiently as possible for the smooth operation of the business.

2. Short time to complete needs
Because there are few decision makers in small businesses, entrepreneurs are forced to desperately try to meet their basic business needs such as production, sales and marketing. This can lead to considerable pressure and make the entrepreneurs become unfocused in solving problems one by one.

3. External pressure
Not only pressure from within the company itself, but the pressure experienced by small and medium businesses from outside is also a lot of blocking, usually this pressure comes from competitors. Examples such as if the business receives orders in large quantities without any production power that compensates for or the possibility of a larger company launching an unfair attack to get rid of its potential competitors.

4. Lack of experts
Small businesses are mostly unable to pay for the services of experts to do certain jobs due to limited funds. This is the biggest weakness for small businesses when compared to large business institutions that are able to hire people who are experts in their fields. As a result, the ability to compete in small-scale businesses in a broad market is very small.

That’s way small businesses must focus on production. Focus on production so that the goods produced are more unique and different from the others. The goods produced must have advantages that are different from the others. With advantages that are different from others, buyers or consumers will be more interested in these items. With many buyers interested, small business sales can increase. With increasing income, small businesses can grow again.

In small businesses, marketing off course playing as important role, but if the small business owner has limited resources, marketing should be left to the party or person who is really focussed in marketing.


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