Generally Eclectic

Economics
Small Business Development

Imagine. Suppose small businesses could carry out all their functions - start-up planning, marketing, sales, production, labour relations, financing, etc. - just a little bit better. They would be more successful, with better and cheaper products, more sales, lower prices, better trained employees, high profitability, longer survival rates. We would all be better off. Securing these marginal improvements, particularly in Africa and other developing countries, is the goal of this section of GenerallyEclectic.ca.

What are we talking about?

What is business development?

"Business development" is normally defined in terms of:

  1. increasing the number of business starts,
  2. decreasing the number of business disappearances,
  3. increasing the number of business expansions, and
  4. decreasing the number of contractions.

Why is is important?

"Business development" is important because it:

  1. increases the number of jobs and incomes directly in the affected businesses and indirectly in supplier companies,
  2. provides goods and services to consumers and other businesses
  3. generates tax revenue, and
  4. increases a country’s foreign exchange when the goods and services are sold abroad or displace goods and services that are imported.

What is a small business?

Business size metrics are generally number of employees, assets, and sales. Size is relative to the country

Why is small business development important?

Within "business development", there Is a focus on small businesses, because in comparison with larger businesses, small businesses typically:

  1. have a greater need for help,
  2. provide a more effective platform for creative, innovative and entrepreneurial individuals to utilize their talents;
  3. are more flexible and dynamic, and
  4. have greater potential for growth.

Many organizations seek to support the "business development", including government agencies and not-for profit organizations such as business associations and international development organizations.

How do government's encourage small business development?

The standard mechanisms for "small business development" include

  1. providing grant or tax incentives for individuals to start or expand businesses;
  2. influencing the rules and regulations related to small business, either to equalize the regulatory environment between small and large businesses or to make it easier for small businesses to comply with rules and regulations;
  3. creating the market for small business products and services through government procurement policies;
  4. encouraging entrepreneurial networks and mentor relationships;
  5. providing problem-solving services in areas such as technology, finance and marketing;
  6. using real estate developments and zoning to create synergistic clusters of small businesses; and
  7. trying to increase the capacity of entrepreneurs to start and expand their businesses.

What policy and practices should come first?

All mechanisms have their place; however, increasing the entrepreneurial capacity of individuals comes first. Without capacity development, none of the other ways to support the development of small businesses is likely to be effective.

What are types of how to knowledge do small businesses need?

The Governments of Canada and the United States and their agencies have answered this question.

Their websites include sections addressing this question. An amalgamation of their answers is included at North American Business Knowledge Base

This amalgamation has identified approximately 150 brief how-to guides covering all facets of the life cycle of a business - idea conceptualization; business start up; business operations; business growth and expansion; innovation and research; and business exits and continuity planning.

The information in the guides is "generic" knowledge that is relevant to all businesses, regardless of industry and location. Generally, it is not "location-specific" knowledge (e.g. country, region or city) or "industry-specific" knowledge (e.g. manufacturing, retail and agriculture).

Is this information or variants of it available to small businesses in Africa in particular and in other developing countries

No. particularly in Africa

Needs to be adapted and extended. Also, Language, education, literacy, computer access.

A proposal for a project to make essential business how-to knowledge available to entrepreneurs in Tanzania is attached at Project Proposal Tanzania

The core of the proposal is to apply the digital revolution to small business development in Africa. The digital revolution covers the assembly, development, and distribution of the how-to information in a cultural relevant format.

A key observation about the proposal is that it is relatively inexpensive.

Can the proposal be extended to other countries?

The franchise model works, with the franchisor providing central services and guidance, and country franchisees undertaking local components. See World franchise model