MODULE 7A

SMALL BUSINESS
MANAGEMENT
Adopted from:
Noor Malinjasari binti Ali
PM Norsidah ahmad
PM Dr. Farok Zakaria
SMALL BUSINESS MANAGEMENT
Learning Outcome
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
DEFINITION OF SMI
Definition of Smal & 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-
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-
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-
CHARACTERISTIC OF A SMALL
BUSINESS
 Owner-manager
 Limited resources

 Agile/Vulnerable to changes

 Labor intensive that capital intensive

 More time spent on operation than on planning

DEFINITION OF A BUSINESS
ORGANIZATION
A business organization comprises of human beings carry
out specific tasks or activities in a coordinated manner
for the purpose of achieving the objectives of the
organization
VISION, MISSION & OBJECTIVE
 Vision – it is a 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

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
MANAGEMENT FUNCTIONS
 Planning
 Organizing

 Directing / Leading

 Controlling
ORGANIZATIONAL INPUTS
 Money or capital
 Personnel or labor

 Technology or plant, machinery and equipment

 Raw materials or inventory

 Information
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 & reponsibility
 Span of control
TYPES OF ORGANIZATIONAL
STRUCTURE
 Functional
 Finance, Marketing, Operation, etc
 Divisional
 By product
 By geographical location
 By customer

 Others
 By shift
 By number of employees
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
MANPOWER PLANNING
 Perform job analysis
 What task to perform in what order?
 How critical/difficult is the task?
 How many workers needed?

 Develop job description

 Task and responsibilities of each job designation
 Develop job specification
 Minimum qualification needed to effectively perform a job
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)
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
 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

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

CONCLUSION
Entrepreneurship and small business management is inter
related in the context of Malaysian business