Performance Measurement – Difficulties in Measuring Small Business Performance

Trying to measure performance, in general, is a difficult task for scholars; the difficulties intensify when the subject is the measurement of small business performance. In this article, which is the third in the series, an overview of the major obstacles for measuring small business performance is presented.Time is a substantial factor that needs to be taken into consideration when trying to measure performance in small business, because measuring the profitability of small businesses in their first years of operation can be misleading. Mcdougall, Robinson and denisi (1992) state, that small businesses are usually not expected to generate any profit in their early years of operation. Biggadike (1979) define a milestone of eight years in operation, in average, before new venture is expecting to generate profits.Growth rate is not equal in all businesses; moreover it varies substantially between businesses and across industries. Cooper (1979) has related to the potential influence of rapid growth, and noted that operational losses or poor profits in small businesses with growth orientation can’t be used as an indicator for management failure, if the cause for the result is heavy investments in new markets or products. If at different industries we’re expecting different growth rate, then as Miller and Tolouse (1986) states, the industry in which the business is operating in is affecting the level of business performance in general as well as the small business performance.Accounting measures consider as objective and more accurate then nonobjective measures, but even if such objective measures can be obtain it is very hard to interpret them in small businesses (Covin and Slevin, 1989, 1990). This statement reinforced by Rappaport (1981) and Stewart (1991) findings of weak correlation between accounting measures related to small business performance and the small business value. Dess and Robinson (1984) argue that the reason for the difficulty in interpreting objective data such as accounting measures may be due to different accounting rules for different types of corporation like proprietary limited company and partnership. Covin and Slevin (1990) relate to the small business owners’ salaries as another potential cause for problem, which is unique for small businesses. In many of the small businesses the owner salaries takes substantial share of the business profitability.

Government Grants For Starting a Small Business

Starting a business or expanding a current business can be expensive. There are grants and loans available for individuals allowing business expansion or development. The first though coming to the mind of most is going to a bank for a business loan when in reality; the government is the largest provider of grants to begin a small business.Many big businesses got their start with a small government grant. There are grants available for expanding and improving as well as beginning a business. The Small Business Administration is a government mandated organization designed to assist small businesses with programs offering loan assistance.Through the Small Business Admistration small business can apply for both long and short term loans to assist them with their business needs. There are four basic types of loans offered through them. A business loan guaranty program, the micro loan program, 504 certified development company business loan program and the small business investment company program.Another option is to apply to various large corporations or foundations. Many of these corporations offer financial grants to small business owners. When a corporation provides a grant to a small business owner, they are able to use the money given as a large tax write off.Australia has many private foundation and government grant programs available. When beginning a search for grants, private or government, be prepared for a large list of prospects. It is important to go through the ones appearing to suit your needs to determine their legitimacy. It the available grant appears to be legitimate and one that fits your criteria be prepared to provide a lot of information.There are grants geared towards specific types of small businesses or minority grants such as for women starting a business. The majority of the foundations will want to know why you think you qualify, what type of business you have or want to have, and if there are other loans out for the business.If there is a deadline specified for the grant application, get your information in before it ends. An application received after a deadline will not be reviewed. Any grant that applies to you and your business apply for it. There are grants for small sums of money as well as those for larger sums.If you have not received any feedback for a larger sum, applying to numerous small amount grants could be just as beneficial to your business. Most corporations that offer grants have competition in their field. Find out who their competitors are and send a request even if they do not advertise the availability of a grant.Your business will need marketing to survive. Searching, researching, and more researching grants are not only a way to fund your business, but is also marketing. When you contact a corporation regarding grants, it is a subtle way to promote your business and if you get a small grant in the process, better yet.The best place to start researching is on the internet. Type in free government grants and then begin applying to each and every one of them that fit your business criteria.