Chapter 3 Size of businesses
Measuring business size: customers may prefer to deal only with law firms assuming that they are more stable and less likely to sees production of smaller ones
Different measures of size:
1) Number of employees’: simplest measure easy to understand for example it is obvious to everyone that shops for just the owner or the family are small.it is also clear that a firm employing many staff is likely to be longer but there are problems how about a business that needs to employee only a few people such has a highly automated chip maker with expensive capital equipment.
2) Sales turnover: total value of sales made by a business in a giving time period. Is ...view middle of the document...
Small business are often run by dynamic entrepreneurs with new ideas for consumer goods and services this helps to create variety on the market and consumers.
Close to the link to this is the competition that small firms can create without this competition larger firms could exploit consumers with high prices and poor service. Small firms often supply special goods and services to important industries in a country. For example, very large car manufactures may depend on small specialist suppliers of wheels, audio equipment, training and cleaning services. All great business were small at one time body shops began on one small rented store in 1976 imp ackers garage many small businesses get involved in government assistance for example: reduce rate of profits, this will allow a company a chance to obtain more profit in the business for expansion next theirs a long guarantee this is the government funded scam which guarantees the repayment of a certain percentage of a bank loan should the business fail. In very economical deprived areas such as city with high unemployment, government establish small workshops, which the rent of small firms at reasonable rents.
Advantages of small businesses:
1)can be managed and controlled by the owner.
Often able to adapt quickly to a customer’s needs.
Offers personal services to customers.
Find it easier to know each worker.
Disadvantages of small business: they have limited access to sources of finance
May find the owner carries a...