Small Business Definition and Characteristics

Time was spent with each Council Executive on the Working Committee to identify the target group for this product since many Councils represent large as well as small organizations. It was agreed that focusing on small business with approximately 10 employees would provide the appropriate image of an owner/operator/ entrepreneur that would perform most of the management responsibilities as the organization moves through and operates at various stages of the business cycle. There is a need to differentiate between management skills for this type of business person compared to what is required in medium and large organizations. It is essential that this definition is well understood to define the necessary client characteristics and design the appropriate learning/training vehicles in order to motivate the small business owner/operator to acquire the management skills to increase the chances of success.

Some of these characteristics are identified in Table 1 below and Table 2.

Issues

Why should we recognize the management skill needs of owner/operators as being different from any other management function in medium to larger organizations? Traditional business management programs have focused on providing learning for graduates and individuals that fit into a line function in a publicly held organization where management is separate from ownership. There is a distinctive responsibility and role for management in these organizations. The business school learning approach has also been challenged in its treatment of entrepreneurship as an add-on to the existing management curriculum. Some institutions are recognizing this difference, for example, Concordia University in Montréal now has a separate small business and entrepreneurship group in its management faculty.

Even in smaller privately-held organizations of only 50 employees there can exist four or five management functions operating as a management team. While the size of this organization does not function like Bell Canada it still requires individuals with specialized skills functioning as line managers in the organization. It would be more appropriate for the manager of marketing in an organization of 50 employees to focus on standards for a marketing manager.

Table 1
Key Factors in the Entrepreneur Small Business Learning Process

1. Culture factors which impact on the owner/operator's life - affecting behavoiurs, values and attitudes.

2. The task environment - content of those tasks which an owner/manager will have to undertake to survive

3. The learning environment - the way in which the owner/manager is motivated to learn to get things right.

4. The desire for knowledge on a need to know basis.

5. A concern for knowing "how to" do things.

6. The with who factor - the owner manager learns to see his/her business through the eyes of the custumer, supplier, employer, banker... the network.

A major step for all those involved in the development of management competencies, skills sets and standards is to recognize these differences to develop appropriate training products and learning strategies. The more specific the definition of small business the better able we are to identify the characteristics that drive the business. Some of those characteristics that would impact on product development are listed in Table 2 below.

Table 2
Small Business Characteristics
Implications for Teachers and Trainers

• Limited time
• Limited resources
• Limited functional support
• Limited environmental scanning
• Personalized network
• Short planning horizon
• Learning by doing
• Does not read
• Problem solving/opportunity grasping approach
• Business development oriented
• Ego - business
• Holistic management
• Importance of personal ambition
• Informal appropriate systems
• Suspicous of bureaucracy

• Problem solving/opportunity grasping approach
• Business development oriented
• Appropriate technology (right level)
• Action orientation
• Personalized approach/service
• Tailor made
• Endorsed by/involving peers
• Peer group learning
• "How to' and "Who with" (not what)
• Local access
• Psychological benefits/Catered for
• Time effective approaches

For the purpose of this project the characteristics that define the needs of a small business owner/operator are substantially different than managers in large organizations. With this premise there is value in developing a management skills framework for the owner/operator of a micro business.