1. BAEB501 : ENTREPRENEURSHIP
CHAPTER 6:
Management a Small Business
© 2010 Cosmopoint

2. Chapter 6: Management a Small Business
Topic Outlines
6.1 Introduction
6.2 Definition
6.3 Characteristics of a Small Business
6.4 Management Functions
6.5 Business Input
6.6 Business Vision, Mission, Goals & Objective
6.7 Planning
6.8 Organizing
6.9 Leading
6.10 Controlling
6.11 Organization
6.12 Organizational Principles
6.13 Organizational Structure
6.14 Personnel Planning
6.15 Recruitment Process
6.16 Retaining Employees
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3. Chapter 6: Management a Small Business
Learning Outcomes
 After completing this chapter, student should be able to:
 Explain the elements to manage a small business
 Understand the elements in managing a small business.
 Manage your own business.
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4. Chapter 6: Management a Small Business
6.1 Introduction
 The importance of small and
medium-sized businesses in
helping the economic
development of our nation
cannot be refuted.
 Creating a job opportunities
 SMEs play a crucial role in
contributing to the prosperity
of big and multinational
corporations.
© 2010 Cosmopoint Slide 4 of [11] Topics

5. Chapter 6: Management a Small Business
6.2 Definition
 A small sized business is:
“A business establishment with an annual sales turnover of not more
than RM10 million and which employs not more than 50 full time
workers”.
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6. Chapter 6: Management a Small Business
6.3 Characteristics of a Small Business
 Ownership – Privately owned by individual or
partners, typically registered as a sole
proprietorship, partnership or private limited
company.
 Management – The business is managed ad
operated by the owner (s).
 Resources - A small business often has
limited resources.
 Organizational Structure – For a small
business, the structure is often flat and
informal.
 Flexibility of Change – more flexibility to
adapt to changes, vulnerable to development
in the business environment.
© 2010 Cosmopoint Slide 6 of [11] Topics

7. Chapter 6: Management a Small Business
6.4 Management Functions
 Management functions refer
to the activities of planning ,
organizing, leading and
controlling of business input.
 What is business input?
 Business input refers to
the resources required to
operate a business
activity. These include
capital, manpower,
technology, and raw
materials.
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8. Chapter 6: Management a Small Business
6.5 Business Input
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9. Chapter 6: Management a Small Business
6.6 Business Vision, Mission, Goals & Objective
 Business Vision. The vision is the long term goal of the business. It is often
stated in terms of a value statement announcing where the business wants
to go or what it aspires to be.
 Business Mission. A mission is a statement of purpose or the reason for
existence. It establishes the identity of the business and what it does. It
defines long-term goals of the company but in a specified time frame.
 Business Goals/Objectives. Business goals or objectives support the
achievement of a business mission and vision. They are more specific,
stated in a shorter term and have a definite time frame. A good business
objective should be specific, measurable, achievable, realistic and have a
time frame.
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10. Chapter 6: Management a Small Business
6.7 Planning
 Planning covers the activity of
formulating company’s policy and
procedure to ensure the
attainment of business mission
and objectives through the most
effective and efficient means.
 To determine his business
mission and objectives and
device a workable strategy to
achieve them .
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11. Chapter 6: Management a Small Business
6.8 Organizing
 The word organize means
“to properly arrange”.
 Refers to the activities of
designing and
organizational structure,
dividing and assigning jobs
and tasks among
departments, sections, or
units besides handling the
infrastructure and operation
methods.
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12. Chapter 6: Management a Small Business
6.9 Leading
 The act of getting the job done
through other people is referred
to in managerial functions as
leading.
 Leading involves:
 Assigning of jobs and
responsibilities
 Motivating employees
 Providing and receiving
feedback
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13. Chapter 6: Management a Small Business
6.10 Controlling
 Controlling is monitoring function
to ensure that activities carried out
are on the right track in achieving
the goals set out by the business.
 Should not be viewed as
restricting personnel activities,
initiative or creativity.
 Ongoing function that should not
be put off towards the end of the
project.
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14. Chapter 6: Management a Small Business
6.11 Organization
 What is organization?
 An organization is a social unit which comprises people
performing different tasks in a coordinated manner in order to
achieve organizational goals.
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15. Chapter 6: Management a Small Business
6.12 Organizational Principles
 Organizational principles consists of the following:
 Division of Work
 Authority and Responsibility
 Unity of Command
 Span of Control
 Delegation of Authority and Responsibility
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16. Chapter 6: Management a Small Business
6.13 Organizational Structure
 An organizational structure is essential so that every individual in an
organization can be assigned a specific task and responsibility.
 Most effective and commonly used organizational structure in a small
business is the line structure.
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17. Chapter 6: Management a Small Business
6.13 Organizational Structure
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18. Chapter 6: Management a Small Business
6.13 Organizational Structure
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19. Chapter 6: Management a Small Business
6.14 Personnel Planning
 There are 3 basics things prepared
by a manager:
 Job Analysis
 A systematic process to
identify tasks and determine
skills and knowledge
required to perform a job.
 Job Description
 A written statement outlining
a given job
 Job Specification
 Detailed in the form of job
description
© 2010 Cosmopoint Slide 19 of [11] Topics

20. Chapter 6: Management a Small Business
6.15 Recruitment Process
 There are 3 tasks involve in selection process:
 Job Application Form
 Job Interview
 Selection Tests
© 2010 Cosmopoint Slide 20 of [11] Topics

21. Chapter 6: Management a Small Business
6.16 Retaining Employees
 How to retain your employees?
 There are several ways to retain your
employees:
 Compensation
 Salary
 Wages
 Sales Commission
 Contribution to the Employees
Provident Fund (EPF)
 Contribution to the Social
Security Organization (SOCSO)
 Allowances
© 2010 Cosmopoint Slide 21 of [11] Topics