At first glance, it seems desperate to systematize the problems and growth models of small businesses beneficial to entrepreneurs. The size and growth potential of small businesses vary widely. They are characterized by independent functioning, diverse structures of organization, and diverse management methods. However, on closer inspection, it is clear that they face common issues at same development stages. The similarities might be organized into the framework for deepening the understanding of a nature, characteristics, and problems of business, from a corner cleaner with two or three minimum wages to a computer software company with annual revenues of $ 20 million, the growth rate is 40%.
For small entrepreneurs and managers, this understanding can help assess current challenges; for example the need to upgrade existing computer systems or to hire and train secondary managers to continue planned growth. It can help anticipate key requirements in a variety of aspects, such as excessive investment in start-up and owner time, and a need to relocate and change management roles as a company becomes more complex. The framework also provides a basis for assessing the impact of current and proposed government regulations and policies on individual companies. A good example is the abolition of double taxation dividends. This can be useful for profitable, mature, and stable companies like Profit Hall, but not useful for fast-growing high-tech startups.
Finally, the framework can help accountants and consultants find problems and give solutions to small businesses. A proposal for a 30-year-old production company with only 100 people rarely solves the problems of a 6-year-old company with only 20 employees. For the former, cash flow planning is essential. Ultimately, strategic planning and budgeting to ensure coordination and operational management are essential.
The coronavirus pandemic has several ways to affect the economic supply and demand, especially SMEs. On the supply side, because employees get sick or have to take care of children or additional dependents when schools are closed and people’s mobility is limited, the company’s supply has declined. Disease control measures by locking and isolating caused further or even worse reductions in capacity use. Besides, the supply chain was disrupted, causing a shortage of parts and intermediates. On a side of demand, the sudden and sudden loss of SME revenue and earnings significantly affected their feasibility and/or caused severe shortages of liquids. Besides, consumers are losing income, worried about infection, and increased uncertainty, which will decrease consumption and spending. The impacts exacerbate a fact that employees are laid off and firms cannot pay wages. In particular, it has affected some sectors, such as tourism and transport, which has also led to a decline in business and consumer confidence. In general, SMEs are much vulnerable to social exclusion as compared to other firms. The effects of virus could potentially spill over into financial markets, further hampering confidence, and diminishing credit information. The different effects affect large and small companies. However, the impact on SMEs is particularly acute, especially due to the high level of vulnerability and low resistance.