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3. Size of a business

3. Size of a business. BUSINESS STUDIES 9708 AS Level Saturday 5, October 2013. The Importance of small (micro) businesses. No set definition of ‘small’ firm Characteristics include: Employ only a few people Low sales turnover Low asset values. Importance to the economy.

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3. Size of a business

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  1. 3. Size of a business BUSINESS STUDIES 9708 AS Level Saturday 5, October 2013

  2. The Importance of small (micro) businesses • No set definition of ‘small’ firm • Characteristics include: • Employ only a few people • Low sales turnover • Low asset values

  3. Importance to the economy • All over the world small firms are of importance to the local economy, for the following reasons: • Job creation – since there are many small businesses, they collectively account for a lot of jobs • They create jobs even in remote, rural and less developed areas of the country • Often dynamic and versatile – create new products and services (DHL, Ebony Cosmetics), adding to consumer variety and choice • Sometimes grow into giants – HP, Microsoft, Body Shop • Small firms sometimes enjoy lower average costs than large firms and can pass this advantage on to clients

  4. Government assistance to small businesses • Reduced rates of corporation tax • Loan guarantee schemes • Information, advice and support • Premises at reasonable prices • Governments often assist in other areas where small businesses fact problems: • Lack of specialized management expertise • Difficulties in raising short and long term loans • Marketing risks from limited product range • Help with premises

  5. Advantages & Disadvantages of small and large firms • See tables 3.3 and 3.4 on pages 46 and 47

  6. Business Growth • Internal or Organic growth • Expansion by means opening new branches, shops, factories.

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