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Why some businesses remain small? (risks (over expansion: more employees …
Why some businesses remain small?
owner's level of control
bigger firm - can't manage alone
hire more workers to support managing
owner's knowledge and skill
depends on industry + market it's in
specialized goods - limited amount of consumers
poor management skills - stress and risk, unwilling to expand
customer relations
owner have more work to focus in - less time to focus on relations
difficult to maintain relations with old staff/customers
owner's workload
workload increase
owners unwilling to work under more stress
risks
locating in area with high cost but low demand
if capital too small to expand, there'll be risk - output smaller than capital => bigger loss
over expansion: more employees need to be hired assist managing the firm. Manager unwilling to trust
remaining small: business able to focus on core business + high quality goods
expand: quality may lower because of other focuses
loss of staff/human resources
risk on business - staff worries
delkay in payroll
market size
small no. of customers
located in rural areas - attract less customers
access and availibility of capital
needs large amount of capital that owner can't afford
market domination
unfamiliar markets
strong competition