Question

According to Small Business Administration research, only half of new businesses survive for the first five years and only one-third of new businesses are able to survive for 10 years. According to Kamo (2016), "Sometimes people start businesses with a dream of making money but don’t have the skill or interest to manage cash flow, taxes, expenses, and other financial issues. Poor accounting practice puts a business on a path straight to failure" (para. 14). For this week’s discussion, search the internet to find an article discussing the importance of fiscal planning in a small business. Include the type of software recommended (if mentioned), competencies leaders should have in the area of finances and any other recommendations. Does the article support the positions by the authors of our textbook? Support your recommendations with course concepts and other outside sources.

Answer 1

Globalization and trade liberalization have ushered new opportunities as well as challenges for SMEs in developing and transition economies. Those nations and economies which are able to manage and face the challanges and finding solutiions to those problems, in those areas the success rate of small business are high. In those nations or economies, who are not able to manage those changes and challanges, most of the firms are going to be closed.

In this regards, it is observed that there are no uniform scales or measures of the firms which were sustained. There are many firms like PATANJALI, which were started like a small unit and later becomes as a national brand. the other brands like CRANE NUTPOWER, TRIPLEX DETERGENT SOAPS, PRIYA PICKLES, SWAGRUHA FOODS etc were established as small units and now they are the market leaders in their segments.

There are many factors to be considered by the entrepreneur of the busienss to make it success. Capturing the need of people and market, adjust your proudct to meet the needs, promote the product, reach the customers and enjoy success. The people who are at poor in estimation of the market, fail to catch the pulse and needs of customer, automatically fails even they produce a great product.

One of the reason why most of the (80%) small units were failed is- the establishers are not having a great vision about the business, do not pick right people, do not prepare right strategies and policies, narrow thinking about all aspects, selfishness and so on.

the article i studied and read for this discusssion is

"Operational and Financial Performance of Andhra Pradesh State Financial Corporation (APSFC): An Overview" by

C. Viswanatha Reddy, http://www.indianjournaloffinance.co.in/index.php/IJF/article/view/72132

if you go through this, you can find more insights.