Generally speaking, however, micro, small and medium-scale businesses are categorized as small. Some micro enterprises grow into small, then from small into medium, and so on. This is one of the reasons why the government has made distinctions among them so that its support services and incentives can be focused according to the needs of enterprises, which apparently tend to differ depending on the size category of the business (You will know more about these government services towards the end of this chapter).
Just like any other business, small businesses are found in manufacturing (for example, food processing or garment making), services (auto repair or internet café), agribusiness (farming or fishing), or trading (grocery store, buy-and-sell).
STRENGTHS
You must have heard of the phrase “small is beautiful.” E.F. Schumacher in Small is Beautiful: Economics As If People Mattered praised small business for using low-level or intermediate technology rather than the high technology of large firms. The latter “dehumanizes” the working man or makes a machine out of him, while intermediate technology still allows him to think creatively at work and find fulfillment from its results.
Indeed, in big enterprises, production has been so mechanized that the worker is reduced to setting up the equipment and watching over its operation, intervening only when something unexpected happens. In an assembly line, work is divided into smaller units for the sake of “efficiency,” but the worker gets to do only a few routine steps like cutting, punching, or soldering – work processes that require little thinking or creativity.
In contrast, in most small factories, an individual worker gets to work on a whole or part of an operation. In furniture making, for example, some work processes that require individual attention are carpentry, in-lay making, finishing; in garment manufacturing, cutting, embroidery, sewing the collar or the sleeves, etc. Usually, small enterprises are those engaged in pottery, basket weaving, papiermache making, woodcraft, jewelry making, or other craftwork where skilled artisans can still practice their traditional craft.
Small businesses also often use materials and methods that are friendly to the natural environment constantly in danger of being polluted or depleted of its resources.
Other advantages of a small business include:
v
Small-scale producers are able to make use of
raw materials and by-products in limited volume which otherwise would have been
disposed of as waste in large-scale factories. For example, an enterprising
person can buy wood scraps from large furniture makers and turn these into
racks to hold DVDs, mobile phones, and even magazines.
v
Because authority is centralized around the
owner-manager, decision-making is fast. Communication of information downwards
does not suffer from bureaucratic delays, provided that the owner-manager
practices an open, rather than a secretive, management style.
v
In times of rapid changes in market demand and
preferences, small-scale production units can more readily modify their
manufacturing set-up to make a changeover or to diversify to other products or
product variants. A children’s garment subcontractor can easily shift to
stuffed toys when orders stop coming.
v
The patriarchal, often informal management
style, practiced in many small firms, gives employees a sense of belonging. The
atmosphere in a small business is more like that in an ordinary Filipino family
where the owner-manager is looked up to as the “father” or “mother” or the kuya or
ate of
the employees. In this manner, a sense of belonging flourishes. Thus, the labor
turnover in small businesses is not as high as expected when in fact the
employees receive comparatively low wages.
v
In seasons of economic crisis, like recession
and inflation, small enterprises are often better able to make adjustments in
their production, personnel and other systems. This was demonstrated in the oil
crisis of the 1970s and again in the Asian currency crisis of the 1990s wherein
many large firms were forced to fold up. In contrast, many small firms stayed
afloat and survived.
It might be added that small-scale enterprises are the
beneficiaries of various incentives and support services from government.
Click here for the Table of Contents of Your Guide to Starting a Small Enterprise
======================================================
The information contained in this article is for general information purposes only. We would like to extend our thanks to DTI and the people behind in realizing this guidebook. There efforts are greatly appreciated. Now we have this information FREE for us to use and eventually be one of the best guide in starting your own small enterprise in the Philippines.
Again, if you would like to receive a soft copy of "Your Guide to Starting a Small Enterprise", please send us a private message on our RICHDADph FACEBOOK page. And we will be glad to answer your queries and request. Looking forward to your comments and suggestions.
Again, if you would like to receive a soft copy of "Your Guide to Starting a Small Enterprise", please send us a private message on our RICHDADph FACEBOOK page. And we will be glad to answer your queries and request. Looking forward to your comments and suggestions.
 and the number of people that work for it (employme...)
By — Don Quixote