business studies find your chair: look at the picture what does this mean to you? be prepared to...
TRANSCRIPT
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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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Business StudiesChapter 3
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Chapter Overview
• How the size of a business can be measured.• The significance of small and family businesses for the economy.
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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)
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Homework
Case Studies: Small Business Finance
A Family Business
Questions 1-10
DUE MONDAY JUNE 8TH