business studies find your chair: look at the picture what does this mean to you? be prepared to...

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Business Studies •Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal or non-verbal communication with anyone else in the class.

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Page 1: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Business Studies

• Find your chair:Look at the picture what does this mean to you? Be prepared to

answer if called upon:

This does not require any verbal or non-verbal communication with anyone else in the class.

Page 2: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Business StudiesChapter 3

Page 3: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Chapter Overview

• How the size of a business can be measured.• The significance of small and family businesses for the economy.

Page 4: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Measuring the size of a Business

• The size of a business can be measured by:• The turnover of the business• The number of employees• The market value of the business• Other indicators such as the number of stores or even the number of vehicles

(like a bus company)

Page 5: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Small Businesses

• Most economies the largest group of businesses are small businesses. • However, larger businesses usually employ more people and have

higher values of output.

Page 6: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Why are Small Businesses Important?• Small businesses are extremely important because they:• Create jobs, reducing unemployment• Provide competition for established business to ensure they stay competitive.• Provide new sources of ideas. Usually small businesses are creative and

innovative.

Page 7: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Advantages of a Small Business

• They are relatively easy to set up. • They are flexible because decisions can be made quickly.• They usually are ran by motivated people that want to see the

business work. • Usually very creative and willing to try new things. • Government will possibly try to help you in the form of subsidies or

tax breaks.

Page 8: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Disadvantages of Small Businesses• They lack the power in the market. Usually difficult to get steep

discounts from suppliers. • Lack the experience compared to established firms. • They find it difficult to raise finance because of the high risk involved

because so many small businesses fail.

Page 9: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Family Businesses (Strengths)

• A number of businesses in an economy will be ran by families.• This is more common in some countries such as India and China. • Family members will share the same values this leads to fewer

disagreements. • If the business succeeds then the entire family will benefit. • Family members are usually very supportive of each other. • A number of family members may provide financing for the business.

Page 10: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Family Businesses (Weaknesses)

• Sometimes business decisions are based on emotion instead of business reasons. • Family members may lack the proper experience to run the business. • Maybe difficult to manage your relationships with other family

members if you disagree with them.

Page 11: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Why and How a Business Might Grow Internally. • The size of a business is not fixed – it can change over time. • The most common way is to expand your business. • This is called external growth.

• The other way to expand is internal or organic growth. • This means expanding your current operations.

• A business may try to expand sales of existing customers/markets.• Develop new products for its customers.• Find new markets where it can sell its existing products.

Page 12: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Why Businesses Grow• More power over suppliers and customers which might mean more

profit. • Potential to reach more customers. • The owners will be satisfied that the business is worth something. • The owners can have a sense of achievement because they have

grown the business.

Page 13: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal
Page 14: Business Studies Find your chair: Look at the picture what does this mean to you? Be prepared to answer if called upon: This does not require any verbal

Homework

Case Studies: Small Business Finance

A Family Business

Questions 1-10

DUE MONDAY JUNE 8TH