Small Business

Management
MEDEC UiTM

ETR 300 medec 1

 Small Business Management
SESSION OBJECTIVES

At the end of the session, students should be

able to:
 Differentiate between small and medium-sized
business and its characteristics
 Understand the importance of management
functions in small and medium-sized business
 Prepare the organization plan for their
proposed business/project
ETR 300 medec 2
 Definition of SMI
 Definition of Small & Medium Sized
Business
 SME is defined as a business that
employs not more than 150 full
time workers and annual sales not
exceeding RM25 million

-SMIDEC-

ETR 300 medec 3

 Definition of Small-Sized
Business
 Small-sized business is defined as
a business that employs not more
than 50 full-time workers and
annual sales not exceeding RM10
million

-SMIDEC-

ETR 300 medec 4

 Definition of Medium-
Sized Business
 A medium-sized business is
defined as a business that employs
more than 50 but less than 150
full- time workers and annual sales
volume between RM10 to RM25
million

-SMIDEC-

ETR 300 medec 5

 Characteristics of a Small
Business
 Owner-manager
 Limited resources
 Agile/Vulnerable to changes
 Labor intensive than capital
intensive
 More time spent on operation than
on planning

ETR 300 medec 6

 Definition of a Business
Organization
 A business organization
comprises of human beings that
carry out specific tasks or activities
in a coordinated manner for the
purpose of achieving the objectives
of the organization

ETR 300 medec 7

 Vision, Mission &
Objective
 Vision – It is the long-term goal of
the organization
 Mission – It is a statement of
purpose of the organization came
into being
 Objective – It is the short-term goal
of the organization

ETR 300 medec 8

 Objective – The SMART
Concept
 A good objective should be based
on the SMART concept:
 S – Specific
 M – Measurable

 A – Achievable

 R – Realistic

 T – Time-frame

ETR 300 medec 9

 Management Functions
 Planning
 Organizing
 Directing/Leading
 Controlling

ETR 300 medec 10

 Organizational Inputs
 Money or capital
 Personnel or labor
 Technology or plant, machinery
and equipment
 Raw materials or inventory
 Information

ETR 300 medec 11

 Planning
 Planning involves all activities of
formulating company policies and
procedures for the purpose of
achieving the stated goals in an
effective manner
 Long term plan – strategic to the
company
 Short term plan – more on
operational issues
ETR 300 medec 12
 Organizing

 Organizing involves activities of

dividing and coordinating the tasks
and responsibilities into
departments, sections or units.
 It also involves establishing
managerial authority.

ETR 300 medec 13

 Directing
 Directing is a process whereby
specific instructions are given to
the subordinates to execute the
tasks assigned to them
 Important issues – unity of
command, clarity of instructions,
span of control

ETR 300 medec 14

 Controlling
 Controlling involves all activities of
measuring and monitoring the
actual to the planned performance
and taking corrective actions to
rectify the discrepancies if needed

ETR 300 medec 15

 Relationship Between
Business Inputs, Functions
and Objectives

Business
Inputs

Management
Functions

Organizational
Objectives
ETR 300 medec 16
 Organizational Structure
 Each organization has to be
structured according to the
purpose and function of the
specific organization
 The structure should explain the
following:
 The hierarchy
 Division of task & responsibility

 Span of control

ETR 300 medec 17

 Types of Organizational
Structure
 Functional
 Finance, Marketing, Operation etc.
 Divisional
 By product
 By geographical location

 By customer

 Others
 By shift
 By number of employees

ETR 300 medec 18

 Organizational Chart
 It is a schematic representation of
the organizational structure
 It shows:
 The hierarchy
 Span of control

 Intra-relationship

 Division of jobs and responsibilities

ETR 300 medec 19

 Manpower Planning
 Perform job analysis
 What task to perform in what order?
 How critical/difficult is the task?
 How many workers needed?
 Job designation?
 Develop job description
 Task and responsibilities of each job
designation
 Develop job specification
 Minimum qualification needed to effectively
perform a job

ETR 300 medec 20

 Manpower Planning
 Recruitment procedures &
remuneration schedule
 Specify the recruitment procedures
 Hiring

 Selection

 Retention

 Identify sources of personnel

 Determine the remuneration scheme

(basic salary, EPF, SOCSO,

allowances, commission, etc)
 Fringe benefits (holidays, medical,

ETR 300
insurance,medec
bonus, maternity, etc) 21
 Office Planning
 Premise - Buy or rent?
 Buy – What is the cost?
 Rent – Rental per month/deposit

 Cost of renovation
 List of office equipments &
furniture
 Quantity and cost per unit
 Identify the source

ETR 300 medec 22

 Office Planning
 Administrative overheads
 Salary of administrative personnel
 Utilities – telephone, electricity &
water, rental of equipment
 Other expenditures
 Office stationeries
 Business registration fees

 Misc. expenditures

 Office layout plan

ETR 300 medec 23

 Administrative Budget
 Cost of premise
 Buy/Build – cost of premise
 Rent – monthly rentals

 Renovation cost
 Total cost of furniture and
equipments
 Monthly administrative overheads
 Other expenditures
 Rental & utilities deposits
ETR 300 medec 24