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Business Entry Methods

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Introduction
Small businesses are major contributors of the growth in the economy. Their different business processes, build up to the cash flow in the nation, and they provide employment for a big number of people. One of the greatest challenges in running a small business is competition from the big companies and their counterparts in their respective industries. This challenge calls for strategic planning in the small businesses to ensure that the companies have a competitive advantage in their industries. The initial challenge in developing SMEs is the high start-up costs and the uncertainties that surround the different business industries. Entrepreneurs have a difficult time planning their entry modes and time into different business …show more content…

Small businesses are prone to stiff competition from the larger companies and the established SMEs in the same industry. It is important for the entrepreneurs to identify the nature of the competition before they decide to enter into the business industry(Enright, Ffowcs-Williams & Nolan, 2001). This allows the entrepreneurs to develop strategies to survive in the competitive environment. The information gathered also provides the entrepreneurs with a chance to develop innovative products that give them a competitive advantage. The best entry method for SMEs in foreign markets is always through partnerships with other local companies in the target market. This approach provides the entrepreneurs with a chance to evade business risks in the foreign market through the guidance of the partners. Partnerships are safer for entrepreneurs venturing into an industry for the first time because the experience partners give them leads on how to survive in the new market(Enright, Ffowcs-Williams & Nolan, 2001). The partners also provide a strategic business plan because they reduce the start-up costs. When new entrepreneurs use their partners to start up their businesses, they save up enough funds to cushion the risks(Enright, Ffowcs-Williams & Nolan, …show more content…

Most of the SMEs venture into business with limited investment in technology, and this makes them susceptible to stiff competition from larger companies and the already established SMEs in their selected business industries. Most small businesses fail on start-up because they underestimate the expenses required to develop a working business. This leads to under-capitalization, and the businesspersons end up using their finances for the wrong processes. The start-up state is viewed as one of the critical stages in entrepreneurship. Being cash poor, but asset rich is also a big challenge for SMEs. Most entrepreneurs use up their capital to purchase equipment and other resources required for business and they forget to save up some money to cushion their companies from unforeseen business risks in their business industries. When entrepreneurs fail to follow up on the growth of their small businesses, they lack the ability to erect the required interventions to foster growth or to evade business risks. The information gathered also provides the entrepreneurs with a chance to develop innovative products that give them a competitive advantage. The best entry method for SMEs in foreign markets is always through partnerships with other local companies in the target

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