Developing a Sustainable Small Business

Developing a Sustainable Small Business
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Developing a Sustainable Small Business
1 The necessity of short-term and long-term forecasting in business plan
Short- and long-term forecasting is necessary for the purposes of setting both small-business objectives and measurement of growth. The forecasting is important for the purposes of envisioning as well as planning for sustainable growth. It helps in revealing opportunities for making key business decisions on the basis of perceived future trends. Long-term forecasts help businesses with projections extending two to five years that acts as the base for creating short-term forecasts. The completion of the forecasting process precedes the activities of budgeting.
2 Importance of developing formal and informal networks when building business opportunities
Different businesses, as well as business owners, operate from elaborate social relationships that range from formal inter-organizational networks to informal networks that encompass family, friends that influence business decisions as well as business performance. Such networks are essential in stimulating business growth through reduction of transaction costs, creation of business opportunities as well as generation of new knowledge (Tidd & Bessant, 2018). The development of cohesiveness in internal networks helps in ensuring existence of a strong culture of trust, inclusiveness as well as openness. This encourages an element of teamwork and collaboration between participants across different positions that ensures they access different types of knowledge as well as expertise. Intra-firm networking enables all the company developers and research scientists to work together for the betterment of the organizations through new innovations. This ensures that the various departments collaborate in conducting multi-faceted analysis as well as finding innovative and non-trivial solutions to current challenges. For instance the use of paper-to-product strategy ensures existence of meetings that enable exchanging of ideas concerning recent scientific innovations, ultimately turning them into products. Such level of networking helps in providing valuable knowledge on projects that are client-oriented; this gives the business access to cutting edge research. This ensures that the business gains competitive advantage within the industry or market (Hannigan, Cano-Kollmann, and Mudambi, 2015).
Secondly, formal and informal networks help in the development of effective communication alongside external relationships that ensure a strong presence within the entrepreneurial ecosystem. Such environment helps start-ups to access different pools of knowledge that enables them benefit from exposure to business opportunities as well as knowledge spillovers. Development of such networks also helps in local and international embeddedness. The aspect of geographic collocation alongside effective inter-firm interactions enables thorough exploitation of location that results in savings as relates to economic activities. Such networking could as well be referred to as clustering and it influences to a larger extent the innovative abilities of the firms owing to information exchange, collaborati...