Small buisness's 9 threats you make sure u know before starting one.

Last night i made an assingment for my managment course Enterprenership and suddenly i had the idea to share it on my blog aswell so this one really didn't take much of my time.I hope my teacher does not minds putting my assingment here. Aniways it is very informative and i hope shall be helpful to much of you.

"I never perfected an invention that I did not think about in terms of the service it might give others... I find out what the world needs, then I proceed to invent."
- Thomas Edison

Introduction:

Small businesses: the term is normally referred as privately owned organizations. Which consist of,

• Corporations
• Partnerships
• Sole proprietorships.

And the term “small” varies on the country and industry with respect to their government support and tax policies. Small businesses range from country to country as in following,

• In Australian Fair Work Act 2009 range is from under 15 employees.
• In European Union definition under 50 employees.
• In U.S Small Business Administration fewer than 500 employees in an organization can qualify for the term
  Small Business Program.

Although a small business cannot be just classified like above it can also be classified according to other methods such as their sales,assets or even net profits.

SWOT Analysis is today a key method to classify or describe a business's medical report.

• Threats
• Opportunities
• Strength
• Weakness

However we are interested in closer analysis on the threats to a small business, and we will generally discuss the most observed and obvious threat according to us, to a business which is a small business to be precise.

1. Management of Demand and Supply:
   We have seen the production lines of humungous corporations like Apple Inc. ( is an American multinational corporation, that designs, develops, and sells consumer electronics, computer software and personal computers.) No matter how much the demand of product rises they always rely on their efficient and cost effective automated computerized production lines that help them continuing to satisfy the demands of their customers and still maintain their customer satisfaction but what about the small businesses where there are no computerized system involved, how would they handle a huge demand of customers. And in business the customers can do anything but cannot wait for you to produce a product and then they pay you for that until and unless it's a limited edition of in your favorite color Ferrari by Ferrari Inc. So for a small business it is very much important to analyze and implement the demand of its customers in addition to maintaining their standards and quality checks. If the supply is more than demand automatically the shelf time of the product would exceed and the product would become a liability to the business and if the supply is less that the demand then the business will loose its most precious thing its heart which pumps the blood(money) inside business which is said to be as its “customers” and will later help in uprising of competitors and that is some serious loss for a business. So an entrepreneur has to really think of this first threat to its small business before the implementation of his or her idea.

2. Lawsuits:
   A non-professionally business can get you to the steps of court, and this is an another uncommon thing

       in Pakistan but in countries where the government is really concerned about the rules and their implementation this is a          very common thing in practice, Consumer courts are build to let the consumers strive for their legal rights plus so that the corporation do not compromise on their customer satisfaction and quality.A small buisness if get's into a lawsuit then it is really into a huge trouble because either they have to shutdown and pledge their assets and give heavy fines in order to start off again. This is what actually happened when BUTT sweets and bakers, were given an order of ice-cream at a wedding and somehow due to traffic problems as stated by the owner the ice- cream delivered was late and was melted then the owner sued the bakery and they had to shut down most of their branches in order to give fine for their mistake. So for a small business even a minor law suit can be a lot of an problem and even if they have to persecute their case they would have to get a lawyer which is a a bit problem for small business which are not financially strong at the moment as they are considered as small buisness.

3. Protection of assets :
   A small business's which already has cannot provide incentives for its employees in comparison to large business due to financial problems it is seen that they face most of the protection problems of their assets as they face the problem,which is a problem well explained in organizational behavior the threats are internal and external and interestingly the internal threats are more lethal in many of the cases that the employees go against the business and cause problems.

4. Market Competition:
   It's more easier it is to get on the top but the more challenging is to maintain the position. When a entrepreneur floats its innovative idea into the market in term of its business’s implementation. That’s is the start of the competition because it is quite easy to get some others idea and to spend most of the time on the betterment of its flaws and for the perfection in it. Then to start from scratch and build your idea and then implement it. The market is full of competitor especially if see around for small business’s around thirty years back their was one of the first pharmacies introduced in Pakistan was Fazal Din's as son as new pharmacies like Clinix and Health Care showed up Fazal din's really lost most of their sales in their branches and only the main branches are in working today. So this tell us how much the market competition as one of the threats is dangerous for a small business.

5. Logistics and Geographical :

Sometimes only the logistics problems are threatening enough to close down a business. As the logistics can be expensive or inefficient that the consumer is not ready to buy the product or cannot wait for the product to be delivered so the business at the end is going in loss or is real problems. Same is with the geographical problems of the location as the Gold Miners go out in the forest and search for gold but the inhabitable condition over their due to height and low level of oxygen,conditions don’t let them do there business effectively. Hence the these are some important threats to a small business.

6. Negative Cash flow and Over trading:
   when the cash flow is mostly negative in a business and the liabilities side of the balance get more zeros into it the business collapses down into a mess for the owner or the partners soon the partnerships are broken down and the assets get pledged by the banks in order to return cash to the vendors or creditors. So this is also a major threat for a small scale business.

7. Social and Religious issues:
   social and religious can also turn down a small business as due to ethical and media trials. Like the Lahore Broast food chain was alleged of using ha-ram chicken in there menu and was also trialed for there unhygienic kitchens that even today there are very few branches left and are still not a fine place to eat food for the public as due to picture given many years ago of such allegations by media and society.

8. Cyber threats:
   Small business means small investment, due to which they do not have enough resources to spend upon their internet security measures. Due to which they becomes an easy prey for cyber criminals. Cybercriminals are always in a search of such an easy insecure target. The cost of a single data theft can be a devastating reason for a small business. If you store your customer records and other details on computer then you should have to secure your security because if it comes in cybercriminals hand then any one can claim anything, that thing effects small businesses a lot and turns a profitable businesses to loss.

9. Natural Disasters:

the possibility of natural disaster like flood, earthquakes and snow storms is always there in any part of the world according to its geographical and environmental conditions. As the earth quake of intensity of 7.8 hit Pakistanis northern areas. The small scale business like the wool and handicrafts business was all gone with there owners and employees which was a very serious issues in October 2008.So natural disasters have always been a major threat to small scale business as due to the lack of finance and assets the business have been straightaway washed away with there employees and caretakers.