Factors That Affects Asset Management in Small Business

There are distinctive aspects of management in a small business compared with a large business. This is because the resources utilized by either firms are influenced both by different environmental factors.

Some basic influences to the asset management of a small business include:

• Small management team
• Total Management with multi-functional roles for managers
• No specialist personnel or support functions
• Informal control systems
• Scope for autocratic leadership style by owner manager
• Closeness of working group
• Limited control environment
• Limited resources to research the environment
• Limited market and usually small market share
• Limited product range although flexibility within it
• Technology limited in terms of scale
• Limited leverage in obtaining financial resources.

From the above list it can be deduced that some of these influences relates to the lack of specialist in managing the resources or asset of small business. The application of asset management in business (small and large) tends to provide efficiency for the organization.

One of the aspects of business operation, which allow the abasement of its performance, is “Efficiency” this simply means the “best use of resources to achieve production of goods or services”. Consequently, a business, which is able to use fewer resources-money, machines, materials and men, etc than its market competitors can be properly described as an efficient business.

For a firm to gain competitive advantage over its rivals, it must be able to succinctly to look at the important external factors, analyze them for possible opportunities and then base organizational decisions and actions on the result of the analysis. Also, the internal resources must be controlled and managed very well so as to be able to sustain efficiency and growth competitively.