MAINTAINING GOOD

GOVERNMENT RELATIONS AND

BUSINESS ETHICS
 Government Help for Small Businesses
Many examples of assistance to small businesses have been given
throughout this text. Because most such help is provided by the SBA.

Small Business Administration

The SBA provides many types of direct and guaranteed loans for small firms. The SBA also provides help for
small firms through publications such as its series of Management Aids, local workshops, small business
development centers, and small business institutes.
 

In addition, the SBA sponsors the Service Corps of Retired Executives (SCORE). SCORE (www.score.org) is made
up of volunteer members who specialize in helping people develop their business ideas .
 

Another way the SBA helps is by encouraging small business owners to try to perform more effectively. It does
this by making state and national awards for the "Small Business Persons of the Year."
OCIALLY AND ETHICALLY RESPONSIBLE BEHAVIO

The role of small business in civic responsibility includes much

more than charitable donations.
 1. Social responsibility
is a business’s obligation to follow desirable courses of action in terms of society’s values
and objectives.
 2. Consumerism
is the organized efforts of independent, government, and business groups to protect
consumers from undesirable effects of poorly designed and produced products
 3. Enlightened employee relations
is showing interest in and concern for employees’ rights.
 Business ethics
are the standards used to judge the rightness or
wrongness of a business’s relations to others.

Small business people are expected to deal ethically with employees, customers, competitors, and others. Ethical
behavior is expected in decisions concerning cases of bribery, industrial theft and spying, collusion, tax escaping,
false and/or misleading advertising, and conflicts of interest.
 
One reason, organizations pay so much attention to ethics is the increasing awareness of how much a violation
can cost them. Ethical violations can result in a worsening reputation that loses a business both customers and
employees. 
CREATE, BUY, OR
FRANCHISE A SMALL
BUSINESS
HOW TO DETERMINE IF THERE'S A MARKET FOR YOUR
BUSINESS IDEA ?
Industry information.
In researching the industry, look for the latest trends. Compare the statistics and
growth in the industry. What areas of the industry appear to be expanding, and
what areas are declining? Is the industry catering to new types of customers?
What technological developments are affecting the industry? How can you use
them to your advantage? A thriving, stable industry is key; you don’t want to
start a new business in a field that's on the decline.
Consumer close-up.
On the consumer side, your market research should begin with a market
survey. A thorough market survey will help you make a reasonable sales
forecast for your new business. To do a market survey, you first need to
determine the market limits or physical boundaries of the area to which
your business sells. Next, study the spending characteristics of the
Competition close-up.
Based on a combination of industry research and consumer research, a clearer
picture of your competition will emerge. Don't underestimate the number of
competitors out there. Keep an eye out for potential future competitors as well as
current ones.
START A NEW BUSINESS
Many successful small business owners
start a new business because they want
others to recognize that the success is all
theirs.
 Reasons for Starting a New Business

Some reasons for starting a new business lie

in the owner’s freedom to
Define the nature of the business
Create the preferred type of physical
facilities.
Obtain fresh inventory
Have a free hand in selecting and developing
personnel
Take advantage of the latest technology, equipment, materials, and tools to cover
a void in acceptable products available.
Select a competitive environment
Reasons for Not Starting a New Business
Problems in finding the right business
Problems associated with assembling the resources, including the location,
building, equipment, materials, and workforce.
Lack of an established product line
Production problems associated with starting
a new business
Lack of an established market and channels
of distribution
Problems in establishing basic management
systems and controls
The risk of failure is higher in small business
start-ups than in acquiring a franchise or even
buying an existing business.
 TO BUY AN EXISTING BUSINESS?

BUYING A BUSINESS CAN MEAN DIFFERENT THINGS TO DIFFERENT PEOPLE. IT MAY MEAN
ACQUIRING THE TOTAL OWNERSHIP OF AN ENTIRE BUSINESS, OR IT MAY MEAN ACQUIRING ONLY A
FIRM’S ASSETS, ITS NAME, OR CERTAIN PARTS OF IT.
Reasons FOR Buying an Existing Business
And For Not buying it
 Personnel are already working.

But may have a poor production record or attitude

The facilities are already available.

But facilities may be old or obsolete

A product is already being produced for an
existing market.

But the inventory may be obsolete or of

poor quality
The location may be desirable.

But the location may be Bad.

Relationships have been established with banks and trade creditors.

But the financial condition and relations

with financial institutions may be poor.
Revenues and profits are being generated,
and goodwill exists.

But the accounts receivable may be past

due or uncollectible
FRANCHISING
• Franchising is a marketing system based on a legal arrangement that permits
one party—the franchisee—to conduct business as an individual owner while
abiding by the terms and conditions set by the second party—the franchiser..
• Franchise is an agreement whereby an independent businessperson is given
exclusive rights to sell a specified good or service.
• Franchiser owns the franchise’s name and distinctive elements and licenses
others to sell its products.
• Franchisee is an independent businessperson who agrees to sell the product
according to the franchiser’s requirements.
Selected Benefits to the Franchiser

1. Faster expansion and penetration

2. Franchisee motivation
3. Franchisee attention to detail
4. Lower operating costs
Selected Benefits to the Franchisee

1. Brand recognition
2. Management training and/or assistance
3. Economies of large-scale buying
4. Financial assistance
5. Share in local or national promotion
 TO BUY A FRANCHISE?
QUESTIONS TO ASK BEFORE BUYING AN EXISTING BUSINESS
Why is the business available for purchase?
What are the intentions of the present owners?
Are environmental factors changing?
Are physical facilities suitable for present
and future operations?
Is the business operating efficiently?
What is the financial condition of the firm?
How much investment is needed?
What is the estimated return on investment?
Do you have the necessary managerial ability?
Is the price right?
Reasons FOR Buying a Franchise
Franchise agreements normally spell out what both the franchiser and
franchisee are responsible for and must do. Each party usually desires the
success of the other. The franchiser brings proven and successful methods of
operation and business images to aid the franchisee. If you decide to become
a business owner, you can obtain guidance from experienced people by
obtaining a franchise.
Reasons for NOT Buying a Franchise
Buying a successful franchise is probably beyond the means of the ordinary entrepreneur,
as the best ones are quite costly. Expenses include initial investments and fees, as well as
royalty payments. According to Jeff Elgin, franchises tend to fail for reasons:
1. Not having enough money to cover all needs (including personal funds).
2. marketing.
3. Is Unsuccess flushes affecting the franchisee understanding their role in the
responsibilities of operating the franchise
4. Innovation challenges
5. Less control over managers.
METHODS USED TO STUDY THE MARKET
THERE ARE TWO THINGS YOU NEED TO DO WHEN
ESTIMATING YOUR SALES AND MARKET SHARE.
Estimating the Size of the Market
Before launching a business, you should find out, by asking questions similar to the following,
whether the market for it is large enough to
accommodate a newcomer:

 How large is the industry?

 Where is the market for the company, and how large is it?
 Are sales to be made to a selected age group, and, if so, how large is that group?
 What are the size and distribution of income within the population?
 Is the sales volume for this kind of business growing, remaining stable, or declining?
 What are the number and size of competitors?
 What is the success rate for competing businesses?
 What are the technical aspects (state of the art) of the industry?
Estimating the Competition

In studying the market area, the number of similar businesses that

have gone out of business or merged with a competitor
should be determined. A high number of these activities usually
signals market weakness. Analysis of competitors’ activities may also
indicate how effectively a new company can compete. Is the market
large enough for another firm? What features—such as lower price,
better product, or more promotion—will attract business? Can these
features be developed for the new firm?
TIPS TO KEEP YOUR CUSTOMERS RETURNING
Know your customers

By knowing who your customers are you will generate a clearer picture of how your business can continue to
meet their needs. It’s important to know who is already buying from you and who you can potentially target for
future sales.
Important questions to ask yourself:
 What’s your customer’s budget?
 What is the average age of your customers?
 Are you predominantly attracting one gender?
 What do they value in your competitors?
 Listen to your
customers

Understanding your customers' needs and wants is vital to the success of any business and a sure-fire way to keep
your customers happy! A great way to understand your customer’s needs and wants is to seek feedback.
Implementing the feedback, you receive will improve customer satisfaction, which results in return business and the
referral to others.
Here are some ways you can acquire feedback:
 Surveys or feedback forms
 Links on webpages that allow customers to provide instant feedback
 Analytics software that allows you to see how individuals shop and what they value on your website
 Mystery shoppers that can report back to you on their experience
 Giving away free samples in return for product reviews.
 Provide good customer service

Providing top notch customer service is important before, during and after a purchase. This is
often the only contact the customer has with your business and can dictate whether the
customer returns and the kind of reputation your business receives.
Customers want more than just competitive prices, and one of the best ways to connect is to
give them a unique and engaging experience.
Customers will come back to a business that makes them feel good! Look for ways to be
different and turn the normal customer experience on its head.
 Look after your loyal customers

Rewarding your loyal customers shows them that you value their business and will
encourage them to return.
Incentives for repeat purchases could include:
 loyalty cards
 special customer events
 discounts
 just going above and beyond for your customers when they require assistance.
 Show your appreciation

Everyone wants to feel appreciated, including your customers. Showing that you appreciate
them generates a good feeling about your business and will encourage them to return.
How to show your customers you appreciate them:
 remember their name and preferences
 support their business! If they own a small business try to support them personally or refer
others to their business
 say ‘please’ and ‘thankyou’ while this might seem obvious, this small gesture is a quick and
effective way to let your customer’s know they are appreciated.
Thank You ,,,