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Hub You - ISO 9001 and Total Quality Management
Q: I'm thinking about starting a business since that seems to be how most rich people get rich. I don't have any business experience or much money, but I'm a fast learner and have lots of energy. Any free advice? Peter J.A: I'm full of free advice, Pete, and here's your dose of complimentary wisdom: don't quit your day job. No offense my energetic friend, but to consider starting a business with no experience and no money is a little like playing football with no playbook or pads. Your various body parts will be pounded into the ground by better-equipped players and you will lose the game.Now let's address your other point concerning rich people who got that way in business. Anyone who thinks that going into business is the key to riches needs to hear the story of the boy who asked the rich old man how he made his money.The old millionaire fingered his Rolex watch and said, "Well, son, it was 1932: the depth of the Great Depression. I was down to my last nickel. I invested that nickel in an apple. I spent the entire day polishing the apple and, at the end of
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big busines
Many people have great ideas for inventions. These thinkers amongst us may have a new innovation, better mousetrap, or a totally new concept. Perhaps you have an idea you would like to see come to life and receive the royalties for it and live happily ever after. Unfortunately many folks who have such ideas spend their life savings going after a dream of their own invention. They fall in love with their idea and want to see it come to fruition and mass marketed to the world.It is wonderful to see so many garage inventors coming up with so many nifty gadgets. But it is also important before you risk you hard earned dollars to be very careful with what you wish for. Bringing even the simplest product to market is not cheap and very few actually succeed. In this case study we will analyze the reality of a seed to weed concept and look into the formation of a small business to make, market, and sell this product. The fictitious product or widget as they call them in MBA school is called a JoggingLight. It is a relatively simple invention, a light, which is powered by the human motion
Total Quality Management, or TQM, has become one of the most frequently discussed topics in current business literature. Because of the competitive pressures created by Japanese companies, quality became a competitive weapon in the 1980s in most industries. Its role in economic life seems to be attaining a new level in the 1990s; in some industries, such as the automotive industry, quality no longer seems to be a competitive weapon, but rather a prerequisite to survival.
Competitive pressures of the 1980s and 1990s have been felt most strongly in the major industries that are dominated by very large firms. Large U.S. corporations were the first to feel the impact of international competition and suffer its devastating effects. Thus, it is natural that almost all discussions of quality and related issues have focused on large corporations. Small firms seem all but forgotten. This article attempts to attract attention to this neglect and propose a conceptual framework for implementing TQM in the small business environment. Specifically, its emphasis is on small firms in the United States.
The main assumption is that quality is as important for small businesses as it is for large corporations. One reason is that some small companies have been competing directly with foreign firms for a long time; some have suffered the same consequences as large companies, while others have prospered in the competition. A second reason is that many large firms rely on a number of small companies for parts and services they use in producing their products. Quality-conscious corporations are demanding continuously higher quality in the goods and services they buy from small businesses; at the same time, they are reducing considerably the number of vendors. Criteria used in deciding which company to keep as a vendor are based almost entirely on cost and quality. Third, competition in the American economy seems to be intensifying, and new conditions emerge to which small firms have to adapt. Quality and productivity seem to be the indispensable main ingredients in a small firm's struggle for survival in these new conditions.
SMALL BUSINESS DEFINED
A challenging issue one must deal with when writing about small business--an issue that has not yet been settled in a generally accepted manner--is to define what small business is and distinguish it from big business. Most of the attempts at defining small business have to rely on some quantifiable characteristic, such as the number of employees, sales volume, or worth of assets. One classification scheme defines a small business as a firm with fewer than 500 employees. A more detailed classification divides this range further into subcategories: very small (1-19); small (20-99); and medium (100-499). Any company with more than 500 employees is considered to be a big business.
But there are other, qualitative approaches that offer valuable insight into understanding small business. According to The Small Business Act of 1953, a small business is independently owned and operated and not dominant in its field of operation. The Committee for Economic Development, as reported in Broom and Longenecker (1993), proposed identifying a small business as a firm that is characterized by at least two of the following:
Management is independent; usually the manager is also the owner.
Capital is supplied and ownership is held by an individual or a small group.
The area of operations is mainly local; workers and owners tend to be in one home community, although the markets need not be.
The business is small compared to the biggest units in its field.
Clearly, these are all useful definitions of small business, with some more appropriate for certain purposes than others. The classification that divides small businesses into three sub-categories (very small, small, and medium) with respect to the number of employees will be used in the rest of the discussion in this paper--not as rigid groups that are clearly distinguishable from others, but as reference points along a continuum of small businesses of different sizes.
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big busines
Every company registered at companies house in the UK is now facing a new threat to their business in the form of 'Company Hi-Jacking'. This is when a company's identity is stolen by fraudsters. These criminals simply submit a forged form to Companies House, changing a company's registered address to a new location.Using the selected company's name and the new address, they are then able to carry out fraudulent activities, obtaining credit to purchase goods and services. This form of fraud is estimated to cost ?50 million a year to industry.As company hi-jacking is on the increase, the Metropolitan Police Service and companies house are urgently advising companies to take simple preventative measures to minimise their company's identity from being hi-jacked, including:1. IMMEDIATELY check your company's registered details are correct and that they have not been fraudulently changed - Search for FREE now at creditgate.com.2. IMMEDIATELY subscribe to an online monitoring service that will alert you by email if any changes are made to your company's details at c
The main assumption is that quality is as important for small businesses as it is for large corporations. One reason is that some small companies have been competing directly with foreign firms for a long time; some have suffered the same consequences as large companies, while others have prospered in the competition. A second reason is that many large firms rely on a number of small companies for parts and services they use in producing their products. Quality-conscious corporations are demanding continuously higher quality in the goods and services they buy from small businesses; at the same time, they are reducing considerably the number of vendors. Criteria used in deciding which company to keep as a vendor are based almost entirely on cost and quality. Third, competition in the American economy seems to be intensifying, and new conditions emerge to which small firms have to adapt. Quality and productivity seem to be the indispensable main ingredients in a small firm's struggle for survival in these new conditions.
SMALL BUSINESS DEFINED
A challenging issue one must deal with when writing about small business--an issue that has not yet been settled in a generally accepted manner--is to define what small business is and distinguish it from big business. Most of the attempts at defining small business have to rely on some quantifiable characteristic, such as the number of employees, sales volume, or worth of assets. One classification scheme defines a small business as a firm with fewer than 500 employees. A more detailed classification divides this range further into subcategories: very small (1-19); small (20-99); and medium (100-499). Any company with more than 500 employees is considered to be a big business.
But there are other, qualitative approaches that offer valuable insight into understanding small business. According to The Small Business Act of 1953, a small business is independently owned and operated and not dominant in its field of operation. The Committee for Economic Development, as reported in Broom and Longenecker (1993), proposed identifying a small business as a firm that is characterized by at least two of the following:
Management is independent; usually the manager is also the owner.
Capital is supplied and ownership is held by an individual or a small group.
The area of operations is mainly local; workers and owners tend to be in one home community, although the markets need not be.
The business is small compared to the biggest units in its field.
Clearly, these are all useful definitions of small business, with some more appropriate for certain purposes than others. The classification that divides small businesses into three sub-categories (very small, small, and medium) with respect to the number of employees will be used in the rest of the discussion in this paper--not as rigid groups that are clearly distinguishable from others, but as reference points along a continuum of small businesses of different sizes.
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big busines
Many entrepreneurs launch a new business without carefully analyzing their financial prospects in advance. They think all they need to do is sell enough of a wonderful product to create a profitable business, but this is rarely the case.A budget, when done correctly, is a powerful tool that will help you make better decisions, and give you a picture of what you what you money is necessary in order to be a successful business in the next 6 months, 12 months and longer. Understanding and having a close control over the money needs of your small business is the key to that success and learning how to prepare an accurate budget is one of the first steps.WHAT SHOULD BE INCLUDED IS A BUSINESS BUDGET?• Projected Sales & Revenue• Costs of achieving that level of sales & revenue• Profit or loss of combing projected sales and their costs• Ongoing cumulative monthly cash flowDEVELOPING A SALES AND REVENUE PROJECTIONIt can be the quick downfall of any small business to overestimate your sales and revenue. It is wonder
SMALL BUSINESS DEFINED
A challenging issue one must deal with when writing about small business--an issue that has not yet been settled in a generally accepted manner--is to define what small business is and distinguish it from big business. Most of the attempts at defining small business have to rely on some quantifiable characteristic, such as the number of employees, sales volume, or worth of assets. One classification scheme defines a small business as a firm with fewer than 500 employees. A more detailed classification divides this range further into subcategories: very small (1-19); small (20-99); and medium (100-499). Any company with more than 500 employees is considered to be a big business.
But there are other, qualitative approaches that offer valuable insight into understanding small business. According to The Small Business Act of 1953, a small business is independently owned and operated and not dominant in its field of operation. The Committee for Economic Development, as reported in Broom and Longenecker (1993), proposed identifying a small business as a firm that is characterized by at least two of the following:
Management is independent; usually the manager is also the owner.
Capital is supplied and ownership is held by an individual or a small group.
The area of operations is mainly local; workers and owners tend to be in one home community, although the markets need not be.
The business is small compared to the biggest units in its field.
Clearly, these are all useful definitions of small business, with some more appropriate for certain purposes than others. The classification that divides small businesses into three sub-categories (very small, small, and medium) with respect to the number of employees will be used in the rest of the discussion in this paper--not as rigid groups that are clearly distinguishable from others, but as reference points along a continuum of small businesses of different sizes.
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big busines
The opening up of retail trade for foreign direct investment (FDI) promises to usher in revolutionary changes to the Indian consumer market in the days to come.Recently, in a significant step towards liberalizing India's retail trade, the government had decided to partially open the retail sector by announcing 51 percent FDI in single brand retailing – a move that should pave way for big names like Nike, Versace, Addidas, Marks & Spencer to set up their own stores in India.This means that foreign companies willing to enter the Indian market will now be able to invest up to 51 percent in setting up production facilities, distribution network and retail shops and the rest will come from Indian investors. But at the moment, the entry of retail giants of multiple brands like Wal-Mart is not allowed. The government is yet to announce the guidelines that will make the picture more clear.However, experts are still divided on the problems and prospects of this move. Some say it will shrink employment opportunities, completely alter the retail distributional structure and de
But there are other, qualitative approaches that offer valuable insight into understanding small business. According to The Small Business Act of 1953, a small business is independently owned and operated and not dominant in its field of operation. The Committee for Economic Development, as reported in Broom and Longenecker (1993), proposed identifying a small business as a firm that is characterized by at least two of the following:
Management is independent; usually the manager is also the owner.
Capital is supplied and ownership is held by an individual or a small group.
The area of operations is mainly local; workers and owners tend to be in one home community, although the markets need not be.
The business is small compared to the biggest units in its field.
Clearly, these are all useful definitions of small business, with some more appropriate for certain purposes than others. The classification that divides small businesses into three sub-categories (very small, small, and medium) with respect to the number of employees will be used in the rest of the discussion in this paper--not as rigid groups that are clearly distinguishable from others, but as reference points along a continuum of small businesses of different sizes.
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big busines
Interim management has traditionally been seen as a reactive response to organisational failure. Increasingly, a new breed of interims are emerging – people who regard interim management as a career and have transferable leadership skills to work across sectors. Building in organisational capacity to accommodate career interims ‘as part of the solution’ is discussed.Interim management saw rapid growth in the private sector in the 1990s. It experienced a decline as the downturn bit in 2000 but has shown signs of picking up in the last eighteen months. In the public sector interim management has been slower to take off but has seen rapid growth in the last two to three years, first in London and then throughout the country. As with the private sector, interim management was associated with organisational failure but is now slowly being seen as part of the solution.In both sectors – private and public – many corporate HR specialists, as well as group managers, are only just beginning to see the potential in recruiting interim managers as part of their change programmes. As su
The main reason for this approach is that the number of people a firm employs is usually proportional to the magnitude of its financial and human resources. Consequently, the number of employees is a proxy for the resources a firm may possess. The resources at the disposal of a company play an important role in the implementation of TQM. Therefore, the position of small firms along the size continuum (from 1 to 499 employees) will indicate the level of resources they possess.
THE NATURE OF SMALL BUSINESS
Many believe that a small business is more than just a "scaled-down" version of a big business. What makes it different may be discussed in four categories: (a) ownership, management, and organizational structure; (b) capital and resources; (c) objectives; and (d) markets and customers. In the following paragraphs, characteristics in each category will be described briefly. Later they will be referred to as they relate to applying TQM in the small business environment.
Ownership, Management, and Organizational Structure
Almost all small businesses start small and stay that way. Usually they are started by an entrepreneur who has a bright idea about a service or has developed a new product that fills a niche. A majority of small firms are privately owned; only about 40,000 of them are publicly traded. In most cases the business is owned by the entrepreneur, or jointly by close family members. The management is independent; usually the owner is the manager and reports to no one, or to other members of the family if they are also owners. Absentee ownership is very rare.
Although owners/entrepreneurs are generally experts in the product or service they produce, they usually have neither the education nor the skills required to manage a business. Many small business owners, who do not understand the intricacies of running a business and being proud craftsmen, may think those duties are beneath them. Yet they end up making most of the decisions--at least all the critical ones. Often they do not know how to delegate authority and responsibility, or the organization lacks qualified people to assume some of the authority and responsibility. Consequently, an owner has to make decisions in areas such as inventory or finance that are usually the responsibility of expert professionals in large firms.
Organization structure in a small firm is usually very simple, with few layers. Sometimes management positions are filled by family members, making it a truly family business. Employees usually perform a variety of tasks, often giving the business greater flexibility than larger businesses have. In general, organizational complexity and the number of levels increase as one moves from companies with a few employees to the higher end of the size continuum.
Capital and Resources
Because of the nature of ownership, typical small business firms often suffer from a shortage of capital. Originally, capital is supplied by the owner or the owner's family. Additional capital for growth, or Short-term credit for weathering bad times, is very difficult to raise. The main reason for the difficulty in obtaining long-term financing is that a large proportion of a typical small firm's assets includes short-lived equipment and fixtures, leaving insufficient long-term assets to qualify for long-term loans. Many small businesses do not even have sufficient record keeping to provide the necessary documents for bank loans. Insufficient capital is usually the main reason why most small businesses are service companies.
In addition to sparse. physical resources, small businesses are also severely limited in human resources, and so cannot attract highly qualified and experienced managers or professionals. Again, this weakness disappears as the firm grows in size and sales. Many small companies, however, provide some employees with a rich learning experience because of their focus on craftsmanship and the multitude of tasks required of them.
Objectives
Many small businesses are established as a means of self-employment. As long as the owner receives a satisfactory income, there may be no desire to expand the business. In some cases, the motive for profit may take a back seat to other motives, such as pride and craftsmanship. Some may become small business owners because they prefer a more relaxed and less competitive environment. Some have the objective of
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