New Venture Creation: Problems, Strategies, and Contributions

This essay delves into the challenges and contributions of small businesses, particularly within the Pacific Island context. It analyzes the various problems faced by small and medium enterprises (SMEs) in Fiji, such as leadership issues, debtor management, licensing difficulties, and adapting to market changes. The essay explores strategies to overcome these challenges, including effective leadership, improved debtor management systems, and government support for licensing. Furthermore, it examines the significant economic contributions of SMEs to Pacific Island economies, including job creation, innovation, and fostering economic growth. The essay highlights the importance of SMEs in driving economic efficiency, promoting balanced regional growth, and improving the standard of living for local populations. The essay uses examples from Fiji to illustrate the points, emphasizing the crucial role SMEs play in the socio-economic development of the Pacific Island nations and the need for policies and programs that support their growth and development.

New Venture Creation
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Contents
ESSAY 1..........................................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Critically discuss the different types of problems small businesses are facing today in the
Pacific. What strategies can be used to overcome these problems? Give examples from Pacific
Island countries to illustrate your answer....................................................................................3
CONCLUSION................................................................................................................................5
ESSAY 2..........................................................................................................................................5
INTRODUCTION...........................................................................................................................5
MAIN BODY..................................................................................................................................6
Small and medium enterprises have long been the engine of growth for economies around the
world. Critically discuss the various economic contributions that small businesses contribute
to the economy of any Pacific Island Country. Give examples from Pacific Island countries to
illustrate your answer...................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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ESSAY 1
INTRODUCTION
Small businesses are facing many challenges in today’s business environment due to various
reasons like high competition in market, vulnerability of external shocks like COVID-19
pandemic, limited natural resources, lack of economies of scale etc. All these factors impact on
performance and profitability of business (Shepherd and Hamanaka, 2015). This essay is based
on the challenges faced by small businesses of Fiji and the strategies to overcome those.
MAIN BODY
Critically discuss the different types of problems small businesses are facing today in the Pacific.
What strategies can be used to overcome these problems? Give examples from Pacific
Island countries to illustrate your answer
In Fiji, the small enterprise sector is still in developing stage. By the utilisation of
extensive marketing strategies, this sector has the growth potential. There are some issues and
challenges which small businesses in Fiji face. In the development and growth of sustainable
economy, the small businesses have been recognised as a crucial tool. The major challenges that
small businesses in Fiji face includes fixed cost associated with business, pricing of goods and
competition from bigger businesses (Problems and development issues of SMEs in Fiji, 2020).
Across the regions of Pacific Island, there is great diversity from Fiji. The remoteness of
countries of Pacific has administered some initial protection from the global pandemic, that is
covid-19. Due to this COVID-19 pandemic, some challenges are created in front of small
businesses including large distances from main markets, limited natural resources, Vulnerability
to external shocks, narrowly based economies etc. which all influence the growth of small
businesses and led to high extent of economic volatility.
One of the biggest challenge that small businesses face includes leadership. Creation of
adequate strategies of leadership for a business is a challenging job for managers of small
businesses. Effective leadership in company helps in improving productivity and performance by
inclusiveness of leadership and innovation (Thakur, 2016). The perform productivity and
profitability of organisation is highly impacted by the leaders. Today, the small businesses face
the challenges associated with reviewing own leadership, abilities and strength of managers and
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encourage team members to engage in leadership development activities. For overcoming this
challenge, it is very necessary for leader to adopt appropriate leadership style and engage
employees in decision making process so that they feel valued within the company and work
more effectively towards attainment of organizational goal. The leader also requires to be
deceptive an emphasis on developing people skills. This assist in developing an effective
environment in which the members of team willingly work together for supporting the vision and
mission of company (Soedarmono and Tarazi, 2016).
Apart from this challenge, the another challenge that management of small companies face
includes debtors’ management. They are not able to manage their debtors effectively. In order to
overcome this issue, it is necessary for the management of small businesses to execute debtor’s
management strategy so as to reduce investment of business in debtors by declining days
outstanding of debtors. Firm can also tie up large amount of money in ledger of debtors. The
cash flow position of business can significantly be enhanced by an effective system of debtors’
management. For instance, if a company with credit sales of 2 million Fijian dollars per year
enacted a system of debtors’ management, which helps in declining the days outstanding of
debtors by 10 days. This will support in improving the cash through position of business.
In Fiji, licensing is a challenge to develop small businesses. This is one of the major barrier
for growth of business. Small businesses are not able to easily get license to run their operations
and activities of business in the country. This restricts their growth and development and creates
a challenge in front of businesses (Small business challenges Fiji Times Online, 2015). To
overcome this challenge, the government request to work on this system so that it can be
improved and the issues associated with licensing can be removed so that small businesses can
get license to grow and develop their business easily and contributes in growth of economy.
The another challenges that small businesses face in Fiji includes ability to adapt with
rapidly changing demand of market, creativity and innovation, technological change, increase
competition capacity constraints associated with knowledge. There are some factors due to
which small businesses often not completely realized their potential. These factors include lack
of economy of scale, inability to complete in opposition to larger companies in terms of
innovation and research and development expenditure, lack of resources, higher transaction cost,
increase market competition, lack of entrepreneur capacity, know-how and zeal, subject to
instability and churning, lack of networks which can contribute to lack of experience of
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international and domestic market, information and know how. Apart from this, many of the
small companies find out their geographical isolation which puts them into competitive
disadvantage.
Most of the small businesses in Fiji face difficulties in assessing adequate amount of funds
either from capital market or banks. The banks more preferred to provide funds to large
enterprises in comparison to small one. The main reason behind that is large organizations have
low risk of default as well as their financial statements also clear. However, providing funds to
small businesses are seen as riskier mainly from the viewpoint of lenders and the don't have
clearer information of accounting. In order to overcome this issue, it is necessary that small
businesses to have clearer accounting of information. Apart from this, they should maintain
adequate amount of funds and ensure that all their financial statements provide clearer
information to others so that it becomes easy for banks to provide them with funds in order to
grow and develop their business in competitive environment. Overcoming all these challenges
will help small businesses in running their business operations smoothly and effectively in the
market.
CONCLUSION
As per the above discussion, it has been concluded that are various challenges faced by
small businesses in Fiji including lacks of access of funds, licensing, debtor’s management, high
transaction cost etc. For overcoming the challenges, businesses require to adopt appropriate
strategies that will help in their growth and development.
ESSAY 2
INTRODUCTION
Small and medium enterprises are serve as an engine for economic growth around the world.
It highly contributes to economy of Fiji. It contributes in improving living standard of people by
providing them with job opportunities which contributes in economic growth.
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MAIN BODY
Small and medium enterprises have long been the engine of growth for economies around the
world. Critically discuss the various economic contributions that small businesses
contribute to the economy of any Pacific Island Country. Give examples from Pacific
Island countries to illustrate your answer
A small business is who have less than 500 employees. Small businesses are accountable for
creating 64% jobs. Small businesses bring innovation to every field. Small businesses are kind of
more direct with consumers and with general population. Small businesses also often try to new
ideas in less span of time. All this innovations benefits businesses since they begin from home
out. Concepts, processes, new products and etc., starts from the community they come from.
Small businesses are more adaptable because of the direct link between companies and
customers which makes it environment friendly and more adaptable changing economic climates
(Kumar, Kumar, and Patel, 2015). When consumer demand shifts, micro businesses find
themselves in front line of creating adjustments to keep the clients happy in such a way that big
companies cannot. Result of this, customer loyalty becomes much stronger. In times of downturn
economy, many consumers try to continue their support for their local favourite rather than to
larger companies. Micro companies generally work quite hard to keep the business local as much
as they can. Means working supporting and working with fellow small businesses, utilising as
many local products as possible. The focus helps in stimulate local economy. Also benefits
community altogether. When local business success it means more local money, which helps in
improving many local services like schools. But money spent at big companies barely stays in
community. Sample businesses grows with time. Many big brands of today started as home-
grown endeavour, small. When small businesses start, they also provide employment to the
people of their community.
As the company grows, it benefits the community in several ways and they also provide
great opportunities and jobs. The viability of micro companies is much greater than large firms.
They not only bring prosperity to people but it also plays an important role in economy. Small
businesses also create opportunities in geographical backward areas. Their effort makes the
market even more competitive. For instance, a local farmer may be capable to give products at a
cheaper rate because he doesn’t have enough money to spend on shipping. Local business prefers
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local person. Big companies move into another places with the team already in their place. Small
businesses have more flexible behaviour (Lee, Hampton and Jeyacheya, 2015). Anyone can start
anytime a new business, which makes them diverse in culture, function and it increases their
potential again large firms. The greater the diversity, the easier it becomes for the country to
stand through tough conditions. Another advantage of small business is that they can arrange
time according to their family schedule. Small businesses are kind of more labour intensive than
the big factories which are more capital intensive. Small businesses provide employment in
larger amount which makes people of Fiji earn which ultimately increase the economy of
country. When more people earn, economy will prosper. The more money they make, the
more standard of living of the local people increases.
Small businesses in Fiji are significantly contribute towards improving economic efficiency
and developing a healthy business climate. These businesses play a fundamental role in attaining
different socio-economic objectives of nation like promotion of innovative ideas, creation of
employment opportunities, fostering entrepreneurship etc. There is great diversity all across the
Pacific Island from Fiji. It is one among the largest country. Small businesses are the vital
segment of economy of Fiji, if not the much vital, because of its potential social and economic
issues of nation. Small enterprises are the significant contributor to economic growth, poverty
alleviation, employment creation, improvement in rural economic activities, income generation,
social justice, advancement of communities, empowering youth and women and security and
peace. According to the survey conducted by bureau of statistics in Fiji, it has been found that
around 24% enterprises are registered as small enterprises and 48% as micro enterprises, making
the 72% of total small and medium enterprise sector (Understanding Key Impediments to Small
Businesses In South Pacific Island Nations: A Case of Fiji, 2012).
Small enterprises play a crucial role in economic development of Fiji by contributing
economic growth and national gross domestic product. The requirement of policies and programs
is there to promote growth and development of small businesses in Fiji. The main constraints in
the country are lack of managerial skills, access to resources and markets, access to finance and
requirement of adequate training for the entrepreneurs of small businesses. The small
organisations of Fiji often lack knowledge, resources and information in order to participate in
training programs therefore the business success may rely critically on subsidised training and
education infrastructure administered by governments. Small businesses help in attaining
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balanced regional growth of economy. They lead to develop backward areas as well as increase
living standard of individuals of those areas. Products and services developed by small
businesses find market in abroad. Therefore, these are contributed to foreign exchange earnings
and accounts for around 35% of total exports of country. Apart from this, small businesses are
the platform by which many individuals enter to economic mainstream (How Important Are
Small Businesses to Local Economies? 2018). The ownership of business enable people
involving women and minorities to accomplish financial success and pride on their
achievements. It provides equal opportunities to all the people to own and operate their own
business which ultimately brings equality in society and contributes to the growth and
development of economy.
CONCLUSION
As per the above discussion, it is concluded that small firm highly contributes in growth and
development of economy by providing people with job opportunities, contributes in gross
domestic product etc.
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REFERENCES
Books and Journals
Shepherd, B. and Hamanaka, S., 2015. Overcoming trade logistics challenges: Asia-Pacific
experiences. Asia Pacific Journal of Marketing and Logistics.
Thakur, R. ed., 2016. The South Pacific: problems, issues and prospects. Springer.
Soedarmono, W. and Tarazi, A., 2016. Competition, financial intermediation, and riskiness of
banks: evidence from the Asia-Pacific region. Emerging Markets Finance and
Trade, 52(4), pp.961-974.
Kumar, R.R., Kumar, R.D. and Patel, A., 2015. Accounting for telecommunications contribution
to economic growth: A study of Small Pacific Island States. Telecommunications
Policy, 39(3-4), pp.284-295.
Lee, D., Hampton, M. and Jeyacheya, J., 2015. The political economy of precarious work in the
tourism industry in small island developing states. Review of International Political
Economy, 22(1), pp.194-223.
Online
Small business challenges Fiji Times Online, 2015. [Online]. Available through:
<http://friendfiji.com/wp-content/uploads/2016/04/Small-business-challenges-Fiji-Times-
Online.pdf>
Problems and development issues of SMEs in Fiji, 2020. [Online]. Available through:
<https://www.researchgate.net/publication/274296833_Problems_and_development_issu
es_of_SMEs_in_Fiji>
Understanding Key Impediments to Small Businesses In South Pacific Island Nations: A Case of
Fiji, 2012. [Online]. Available through: <http://www.jgbm.org/page/24%20John
%20Chelliah.pdf>
How Important Are Small Businesses to Local Economies? 2018. [Online]. Available through:
<https://smallbusiness.chron.com/important-small-businesses-local-economies-
5251.html>
THE IMPORTANCE OF SMALL BUSINESSES TO LOCAL ECONOMIES, 2020. [Online].
Available through: <https://pineapplepayments.com/the-importance-of-small-businesses-
to-local-economies/>
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