ZeePedia

Post Operative Problems of a New Enterprise:Environmental Causes

<< ASSESSMENT OF PERSONAL REQUIREMENTS AND ORGANIZATIONAL CAPABILITIES:Analysis of Competition
HOW TO APPROACH LENDERS:Bank’s Lending Criteria, Specific Purpose, Be Well Prepared >>
img
SME Management (MGT-601)
VU
Lesson 19
Chapter deals with post and field this problems faced by a new concern.
1.
Acquisition of machinery and its installation;
2.
Preliminary work about the sources of supply of raw materials, labour and managerial inputs;
3.
Prospecting about marketing;
4.
Preliminary work regarding sources of working capital;
5.
Coordination problem connected with the acquisition of different kinds of assets or completion of jobs;
Unless care is taken to ensure proper sequencing of different activities, the project would have cost
over-run and/or time over run. Here in some kind of PERT analysis could be quite helpful.
Post Operative Problems of a New Enterprise
Several problems to starting any enterprise-whether small or large. They need not always arise but an
awareness regarding them could enable their timely avoidance or prevention. Below are given some of
the post-operative problems.
·  Lack or absence of profits.
·  Experience factor:
o  Unfamiliarity or lack of experience in product or services line.
o  Lack of experience in management. There is a vast difference between being a
machinist and being able to manage a machine shop.
o  Over-concentration of experience e.g. focusing only on the area of interest say, sales,
finance, production etc and neglecting others.
o  Incompetence of management.
·  Sale Causes:
o  Weak competitive position;
o  Lack of proper inventory control
o  Low sales volume;
o  Poor location
o  Decline in demand due to recessionary trends in the particular industry;
o  Inappropriate marketing strategy;
o  High production costs and consequent high pricing;
·  Expense Causes i.e. failure to control operating expenses that reduce profits and pose a threat
to survival of the firm. For instance, borrowing too heavily may force business to close if debts
cannot be timely paid;
·  Neglect Causes
Common cases of neglect are: poor health, laziness, and family or marriage problems.
Entrepreneurs need to establish priorities for themselves relative to their involvement in the
firm. They must concentrate on the objectives of the firm.
·  Capital Causes
o  Low or over estimation of capital needs;
o  Fund management;
o  Cash losses;
o  Poor debt collection or unfavorable credit terms.
·  Customer Causes: i.e. extension of credit on liberal terms.
·  Personal Causes
o  High rate of absenteeism &/or labour turnover;
o  Unhealthy industrial relations;
o  Frequent strikes and lockouts;
o  Low productivity;
o  Militant trade unions.
·  Natural calamities such as burglaries, earthquakes, fire etc.
·  Government Regulations
56
img
SME Management (MGT-601)
VU
o  Difficulty of compliance due to excessive cost burden;
o  Interference and dilatory tactics adopted by government authorities
·
Unmindful expansion so that sufficient business is not generated to sustain expanded capacity.
·
Environmental Causes:
o  Changes in government policy;
o  Changes in social or political conditions;
o  Inflationary pressures leading to increases in the input cost.
·
Production Causes
o  Technological obsolescence;
o  Low capacity utilization;
o  Inability of labour to correctly understand technology;
o  Non-availability of spares and replacements;
o  Poor machinery maintenance;
l
Book recommended
Entrepreneurship and Small business By C L Bansal
57
Table of Contents:
  1. THE HISTORY:Cottage Industry, CONCEPT OF SMALL BUSINESS
  2. THE RELATIONSHIP BETWEEN SMALL AND BIG BUSINESS:The SME’S in Pakistan
  3. THE ROLE OF ENTREPRENEURSHIPS IN SMEs:Focus and Perseverance Guide the Entrepreneur
  4. THE ROLE OF ENTREPRENEURSHIPS IN SMEs:Kinds of Entrepreneurs
  5. SMALL ENTREPRENEURS IN PAKISTAN:National Approaches
  6. THE DEVELOPMENT OF SMES IN PAKISTAN:The Industrial History of Pakistan
  7. GOVERNMENT’S EFFORT TOWARDS SME DEVELOPMENT:Financing Programs
  8. THIS LECTURE DEFINES THE ROLE OF NGOS AND SMEDA:Mission Statement
  9. ISSUES AND POLICY DEVELOPMENT FOR SME:Monitoring Developments
  10. ISSUES IN SME DEVELOPMENT:Business Environment, Taxation Issues
  11. LABOR ISSUES:Delivery of Assistance and Access to Resources, Finance
  12. HUMAN RESOURCE DEVELOPMENT:Market and Industry Information, Monitoring Developments
  13. MARKET AND INDUSTRY INFORMATION:Measuring Our Success, Gender Development
  14. LONG TERM ISSUES:Law and Order, Intellectual Property Rights, Infrastructure
  15. THE START UP PROCESS OF A SMALL ENTERPRISE:Steps in Innovative Process
  16. TECHNICAL FEASIBILITY:Market Feasibility, Market Testing
  17. FINANCIAL FEASIBILITY:Financial resources and other costs, Cash Flow Analysis
  18. ASSESSMENT OF PERSONAL REQUIREMENTS AND ORGANIZATIONAL CAPABILITIES:Analysis of Competition
  19. Post Operative Problems of a New Enterprise:Environmental Causes
  20. HOW TO APPROACH LENDERS:Bank’s Lending Criteria, Specific Purpose, Be Well Prepared
  21. WHAT A BANK NEEDS TO KNOW ABOUT YOU:General Credentials, Financial Situation
  22. COMMERCIAL INFORMATION:Checklist for Feasibility Study, The Market
  23. GUARANTEES OR COLLATERAL YOU CAN OFFER:Typical Collateral
  24. Aspects of Financial Management:WINNING THE CASH FLOW WAR, The Realization Concept
  25. MEANING OF WORKING CAPITAL:Gross Working Capital, Net Working Capital
  26. RECRUITMENT, SELECTION AND TRAINING:Job Description, Job Specification
  27. SELECTION AND HIRING THE RIGHT CANDIDATE:Application Blank, Orientation
  28. TRAINGING AND DEVELOPMENT:Knowledge, Methods of Training
  29. CONDITIONS THAT STIMULATE LEARNING:Limitations of Performance Appraisal, Discipline
  30. QUALITY CONTROL:Two Aspects of Quality, Manufactured Quality
  31. QUALITY CONTROL:International Quality Standards, MARKETING
  32. MARKETING:Marketing Function, MARKETING PROCESS - STEPS
  33. MARKETING:Controllable Variable, Marketing Uncontrollable, Marketing Mix
  34. MARKETING:Demerits of Product Mix, Development of new product, SMEDA
  35. ROLE OF TECHNOLOGY:Training programmes, Publications
  36. ROLE OF TECHNOLOGY:Measure to Undertake for Promoting Framework.
  37. EXPORT POTENTIAL OF SME IN DEVELOPING COUNTRIES I:Commonly Seen Assistance Programme
  38. EXPORT POTENTIAL OF SME IN DEVELOPING Countries. II:At the national level
  39. WORLD TRADE ORGANIZATION (WTO):WTO Agreements: Salient Features
  40. WTO MINISTERIAL CONFERENCES:PAKISTAN AND WTO
  41. WORLD TRADE ORGANIZATION (WTO) PAKISTAN & WTO. II:International Treaties
  42. WORLD TRADE ORGANIZATION (WTO) PAKISTAN & WTO. III:Agriculture
  43. WORLD TRADE ORGANIZATION (WTO):PAKISTAN & WTO. III
  44. WORLD TRADE ORGANIZATION (WTO):CONCLUSIONS AND RECOMMENDATIONS
  45. SUMMARY & CONCLUSIONS:Financing Tool, Financing Tool