Entrepreneurship and small

4/30/2020
businesses
Case study solving

Prepared by : Ahmed Al Hashami 18901296

PREPARED TO : MAJAN COLLEGE
Word Count: 1650
1.0 Introduction:
The SME sector is one of the most important sectors of the Sultanate, as it has an important role
in raising the efficiency of the Omani individuals, raising Omani economic growth and reducing
unemployment. Oman’s government seeks to create encouragement programs like Intilaaqah
Project, Sanad Incubators, and Sanad Program. The aim of these programs is to develop
entrepreneur’s skills and to invest their energies in economic promotion. But, d espite the support
programs provided by the government, entrepreneurs still face many difficulties that lead to the failure of
their projects such as, strong competition and the absence of strong marketing activities due to the
lack of the financial budget (Badriya,2017).

It takes a special kind of people who can come up with crazy business idea and put this idea into
practice, as they have certain characteristics that lead them to success (Steffen, 2010). The case
study presented many of the characteristics that Sultan and Majid possess as entrepreneurs, but they have
a lot of permanent opportunities to develop other characteristics. The competitive pressures
experienced by the enterprises in Oman are increasing in order to sustain their market share, so
the need to bring new ideas that keep pace with development has increased, the report discusses
the main major business techniques that help generate ideas.

2.0 Understanding SMEs:

The concept of a small and medium business enterprises has many different views depending
upon the perspective of the writer, which creates difficulty to have a unified comprehensive
definition. Several countries have a different definition upon on the size of the company, the
returns earned and the number of employees employed (Belghitar, 2006; Parker, 2006). David
(2006) discussed that the difference in the definition of small and medium-sized enterprises has
caused a lot of confusion amongst the authors to know it properly and this can be observed due
to the fact that small businesses in European countries can be considered larger business than
medium-sized enterprises in African and Asian countries. Universally, the EU countries are the
only countries that have made more efforts to find a common definition for SMEs ( Korunka,
Frank & Lueger, 2007). According to the European Union, any company that has fewer than 250
employees and has assets of 50 million euros is called a small or medium-sized enterprise
(Kozak, 2011).
According to the policies of the Ministry of Commerce and Industry in Oman, the number of
workers is determined according to the records of the Ministry of Manpower and the sales of the
facility are determined according to the latest results and to preliminary estimates conducted by
the administration in new institutions.

Micro Small Medium

No.workers: No.workers: ( 6- No.workers: ( 26-
( 1-5 ) 25 ) 99 )
Capital : < 25,000 RO
Capital : 25,000 - Capital : 250,000 -
250,000 RO 1,500,000 RO

Figure 1 - Source: Ministry of commerce and Industry website

3.0 Main Reasons a Small Business Fails in Oman

According to Al Qassabi (2019), Although the government provides Al-Rafd Fund, which is
responsible for supporting SMEs financially, some enterprises do not find their opportunity to
get financial support from government’s sector. Therefore, owners of SMEs turn to private sector
companies and banks in order to obtain loans, these banks do not support small and medium
companies except in a few cases witch complicated conditions.

SMEs Omani owners suffer from banking procedures related to opening an account and
requesting credit services (Al-Lamki, 2000). Al-Lamki stated that some banks require a copy of
the office lease contract be presented before opening the account, while the owner of the building
requires postponed cheques for a year, at which time the owner of the enterprise is obliged to
submit deferred checks from his personal account in order to complete the lease procedures and
then replace with another from the company after opening the account.

The Omani women entrepreneur also faces challenges preventing them from entering the field of
entrepreneurship like the negative view of society on the work of women in this sector, followed
by fear of failure and bearing the financial consequences ( Shamsa, 2019). Shamsa (2019) adds
in her research that about 80% of female entrepreneurs believe that the lack of exchange of
experiences between large and medium enterprises and owners of small enterprises is one of the
obstacles for women to enter entrepreneurship. And 75% of women entrepreneurs say: The
difficulty to have manpower is one of the main obstacles they face.

Marketing the product or service provided by SMEs in Oman is very week, because of the lack
of knowledge of the value of marketing to increase the customer base (Alaamri and Christina,
2014). Regarding this, Hill (2018) states that there are many SMEs in Oman, which lack
marketing and need to consider specific factors to improve marketing activities. Another
challenge is Omani SMEs facing is competition in the market from large companies (Alqassabi,
2020). It is not easy to manage multiple aspects of competition related to operational challenges
and costs of operations. There is an increase in competition as well as globalization with the
requirement to produce products of good quality with specific standards and at reasonable prices
(Al Maqbali and Bilal, 2015).

4.0 Major characteristics of successful entrepreneurs

Many authors have identified a wide-ranging specific traits or characteristics that entrepreneurs
should have in order to be successful in a more analytical manner (Man, Lau etal 2002, Rauch
and Frese 2007). These characteristics also can be things like skills, knowledge, and personality
traits which are affected by businessman’s demographic foundation.

One of the most important characteristic of successful entrepreneurs is that they are proactive
when they are doing things (Barkham,1994). Successful Entrepreneurs are always ready to work
and get results that exceed expectations, more than those who do not prepare or plan, and act
without thinking about the consequences of the results and the events (Brockhaus, 1980).
Persistence is another characteristic that successful entrepreneurs possess. SMEs founders need
to possess persistence because the whole thing always takes longer than planned and is expected,
often more than three times longer (Chandler & Hanks, 1994). SMEs owners face the difficulty
of continuing, especially when they are not getting profitability in the first months or years, only
business owners who are persevering will succeed. Another characteristic that owners of SMEs
should have is innovation. Innovation can be in the form of a new product or service that has not
been offered in the market before (Kelper &Shane,2007). It can be a form of operation a
procedure, i.e. doing the same business but in a more efficient and cost-effective way.

Taking-risk is the trait that distinguishes a successful entrepreneur from others (frees &Gielink,
2014). some people think that the risk is related to money only, and this is not true, it is possible
that the risk is related to dedicating the entire time to the project, or the risk of introducing a new
idea. Taking the step by the entrepreneur into the implementation of his idea is a risk in itself, as
well as when continuing his/her project with no clear hope for his success. It is clear in the case
study that Sultan and Majid are well aware of the risks involved in the project and that helps
them in that activity and enthusiasm they possess, Since Sultan he is the one who brought the
idea of investing in new information technology equipment, he must convince his business
partner and explain to him how risky it is to use the idea of a new production system.

5.0 Idea generating techniques

Gibson and Skarzynski (2008) stated that, Idea generation techniques are defined as very useful
tools for generating ideas to come up with new product or service or to solve a problem, and
there are many ideas generating tools that are used today. Mindmapping is one of them, it is
innovative method for expressing ideas through a chart that is drawn using writing, symbols and
images, and thus helps to read information with the entire brain (left and right lobes), and helps
to flow information and connect different meanings with each other with arrows and lines (Flynn
et al., 2003). Baregheh (2009) stated that by using Mindmapping, decision makers can identify
any topic and understand its structure quickly and easily.

Another technique for generating ideas is the reverse thinking tool, through it, it is possible to
obtain new ideas, through which the idea or goal that it wants to be achieved is reverse thinking.
(Flynn et al., 2003). The process of reverse thinking does not necessarily give always the right
and acceptable ideas, but it will always give new ideas, because normal thinking will only be in
one direction, and the reverse thinking will lead to thinking in two directions and thus obtain new
and different results.

According to Gharib (2018), the most popular technique used to generate ideas is brainstorming.
The technique of brainstorming has long been used to generate ideas and solve difficulties, the
concept of brainstorming was developed by Alex Osborne in 1953 in his book Applied
Imagination (Mosert , 2018 ; M. Ritter, 2018). Gharib (2018) indicated that, the goal of
brainstorming is to stimulate the generation of a big number of ideas or solutions and throughout
the process ideas should not be assessed. People can speak their thoughts freely without fear of
criticizing their ideas even if the ideas are strange and crazy.

One more technique discussed by the authors to generate creative ideas for solving problems is
the scamper technique. This technique is credited to Bob Eberle, an education director and
author. This tool is used by asking a group of questions about current products, using each of the
seven claims shown in the figure (2) below. These questions help to come up with imaginative
ideas for developing exiting products or services or improving a new product.

Replace part of the service, process, or product with another.

Substitute

Combine processes, ideas, or products into one more

Combine efficient output.

Adapt an present idea that might not have worked before to

Adapt
solve a problem

Modify an aspect of the situation or issue.

Modify

Put current procedures or products that were envisioned for

Put to another use a specific purpose to alternative use to solve problems.

Simplify or remove idea to get to improve it, but also to

Eliminate identify its most significant aspect.

Reverse the orientation or way of a procedure or product, do

Reverse things the other way around.
 Figure (2) S.C.A.M.P.E.R

6.0 Conclusion:

SMEs still face many challenges that cause their projects to fail. Therefore, Oman strives to
support SMEs and encourage entrepreneurship because it has a prominent role in the economic
growth of the country, and is keen to find a stimulating environment for institutions and provide
services with high quality and efficiency for SMEs. There are many characteristics that
distinguish some business owners from others, such as patience, persistence, persistence,
resistance, and others. Also, only successful entrepreneurs know how to use methods to generate
ideas in a correct way, whether to solve any problem or if a new product is produced for the
organization.

7.0 References:

 Steffen, Hertog. (2010). Benchmarking SME policies in the gulf countries: a survey of
challenges and opportunities.
 Al balushi, Badryia (2017). Growth strategies of SMEs in Oman – issues and challenges
 Alia, Yousef Ali. (2014). The effectiveness of SMEs adoption as a strategic option to sole
unemployment problem in the Arab world.
 Parker, S. C., & Belghitar, Y. (2006). What happens to nscent entrepreneurs? An
econometric analysis of the PSED. Small Business Economics, 27(1), 81-101.
http://dx.doi.org/10.1007/s11187-006-9003-4
 Audretsch, David & Thurik, Roy & Verheul, Ingrid & Wennekers, Sander. (2006).
Understanding Entrepreneurship Across Countries and Over Time. 10.1007/0-306-
47556-1_1.
 Barkham, R. J. (1994). "Entrepreneurial characteristics and the size of the new firm: a
model and an econometric test." Small Business Economics 6(2): 117-125.
 Chandler, G. N. and S. H. Hanks (1994). "Founder competence, the environment and
venture performance." Entrepreneurship Theory and Practice 18: 77-77.
 Frese, M., & Gielnik, M. M. (2014). The Psychology of Entrepreneurship. Annual Review
of Organizational Psychology and Organizational Behavior, 1, 413-438. doi:
http://dx.doi.org/10.1146/annurev-orgpsych-031413-091326.
 Hines, J. L. (2004). Characteristics of an entrepreneur. Surgical Neurology, 61(4),
407-408. doi: http://dx.doi.org/10.1016/j.surneu.2003.05.004.
 Kepler, E., & Shane, S. (2007). Are Male and Female Entrepreneurs Really That
Different? Small Business Research Summary, 309.
 Flynn, M., Dooley, L., O’Sullivan, D., & Cormican, K. (2003). Idea management for
organisational innovation. International Journal of Innovation Management, 7(4), 417-
442. http://dx.doi.org/10.1142/S1363919603000878.
 Simone M. Ritter & Nel M. Mostert (2018): How to facilitate a brainstorming session:
The effect of idea generation techniques and of group brainstorm after individual
brainstorm, Creative Industries Journal, DOI: 10.1080/17510694.2018.1523662.