"Small enterprise" means a person employing between one to ten persons (including the employer) who owns or operates plant and machinery or equipment, the net value of which does not exceed the sum of Lm80, 000 and whose annual turnover does not exceed the sum of Lm250, 000 or such other number of persons, net value of plant, machinery or equipment, or any other amount of annual turnover as the Minister may by notice in the Gazette prescribe. CHAPTER 325 - BUSINESS PROMOTION ACT - To encourage the establishment of new businesses and the expansion of existing ones, and to make ancillary arrangements in relation thereto (5th July, 1988).
"Enterprise" means any individual or body of persons who or which carries on or exercises a trade, business, profession or vocation. According to European Commission: The European Commission defines a "small enterprise" as a business that employs between one to fifty persons who operates plant and machinery or equipment, the net value of which does not exceed the sum of ten million euros and whose annual turnover does not exceed the sum of ten million euros. Definition of Family Business
The term "family business" is usually defined as a business owned and managed mostly by people who are related by blood and/or by marriage, that is family members often create new firms together. Entrepreneurs are more likely to pass their firms to their families than to go public as an exit strategy. Under which category does Family Business fall? A Family Business must solve the same problems of other small or large businesses, such as meeting the challenges of strategy, competitive advantage and operational excellence.
This means that family business can either be large or small enterprises. Scope of Presentation The scope of this presentation is to analyse the task of family businesses in the local structure of entrepreneurial and economic culture. While there is a need for developed entrepreneurial activities, the local structure often penalises this entrepreneurial effort. The main difficulties of local entrepreneurs are unnecessary bureaucracy and lack of understanding of the daily realities of business management.
This means that SMEs are suffering most from the burden and complexity of regulation. SMEs also meet with more difficulties when looking for finance, for information, when trying to find appropriate skilled workforce, to access technologies, etc. SMEs & Family Businesses Current Situation There are almost 20 million enterprises in the European Union, the EEA countries and Switzerland providing work for 117 million people. Almost 100% of these employ less than 10 persons, and are thus classified as micro-enterprises.
About half of these enterprises are operated by only one self-employed person. On average, a European enterprise provides employment for 6 people. This varies according to the European region. In the EU Member States the average enterprise size amounts to 6 occupied persons, while in the EEA and Switzerland an enterprise on average provides employment to 8 persons. Family businesses are mostly micro and small enterprises. Every year, they create 60 to 80 per cent of all new jobs in the European Union and two thirds of private employment in Europe.
Therefore, they are considered the backbone of economic activity of the member states. This is because they are the main source of business dynamism in Europe and they have a key role in innovation. They contribute to Europe's competitiveness and growth. The Lisbon objectives depend on dynamic small businesses. The following figure illustrates the breakdown of main indicators in the EU's business economy by enterprise size class, 2000 % share of total (please note that the percentages do not add up to 100 due to rounding effects):
Source: Structural Business Statistics (theme 4/SBS/sizclass), Eurostat (estimates based on incomplete country data) Strengths and Challenges of SMEs and Family Businesses The SMEs and Family Businesses are well known for their dynamism, their strong entrepreneurial spirit, and their flexibility and capability to survive and boom in usually unfavourable economic and regulatory environments.
In order for SMEs and Family Businesses to make profits and expand their operations, and not simply surviving in the market, the challenge of the member states' governments is how to understand their needs and how to make simple their working environment. SMEs in a Globalised Environment The EU Commissioner for Enterprise and Information Society, Erkki Liikanen says that it is a though test for the people taking action with new measures and practical assistance to SMEs because the world economy is rapidly changing.
This is also a challenge for the entrepreneurs themselves and for those who work in small enterprises. New Entrepreneurs In meeting the challenge of a globalised environment, new entrepreneurs need to be well prepared before they create a business, have good business ideas, develop good business plans, secure access to capital, be trained in business management and be supported when dealing with bureaucratic processes. Support Services to SMEs and Family Businesses
The globalised market environment has made SMEs and Family Business operations challenging. In identifying what support services are needed to assist SMEs and family businesses, the Australian Federal Chamber of Commerce & DG Enterprise & Institute for Small Business Research (IFGH) have jointly made a research study on the present sustain that SMEs and Family Businesses have. This research has reached the following conclusions.