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C3: ENTERPRISE, BUSINESS GROWTH & SIZE - Coggle Diagram
C3: ENTERPRISE, BUSINESS GROWTH & SIZE
DEFINATIONS
ENTREPRENEUR
BEING AN ENTREPRENEUR
ADVANTAGES
INCOME MIGHT BE HIGHER THAN WORKING EMPLOYEE
MAKE USE OF PERSONAL INTEREST & SKILLS
INDEPENDENCE
DISADVANTAGES
LACK OF CAPITAL
OPPORTUNITY COST
(lost income from not being an employee)
RISK
BUSINESS PLAN
PRODUCTS THEY ARE SELLING
OBJECTIVES
THE MARKET
THE BUSINESS OPPURTUNITY
FINANCIAL FORECASTS
CAREFUL PLANNING REDUCES RISK
TO HELP GAIN FINANCE
GIVES BUSINESS A SENSE OF PURPOSE & DIRECTION ; BUSINESS CAN MONITOR PROGRESS
WAYS OF MEASURING SIZE OF BUSINESS ( & LIMITATIONS)
NUMBER OF EMPLOYEES
NOT ALWAYS HIGH OUTPUT
VALUE OF OUTPUT
HIGH OUTPUT LEVEL DOESN'T MEAN LARGE BUSINESS
CAPITAL EMPLOYED
IF BUSINESS USES LABOUR INTENSIVE METHOD
MARKET SHARE
CAN'T COMPARE WITH OTHER INDUSTRIES
METHOD
LIMITATION
WHY SOME BUSINESSES REMAIN SMALL?
MARKET SIZE
SMALL CONSUMER BASE
TYPE OF INDUSTRY
IF TOO BIG, HARD TO CATER DEMAND (SPECIALISED SERVICES)
OWNER'S OBJECTIVE
AVOID STRESS
KNOW THEIR CUSTOMER/STAFF
BETTER CONTROL
PROBLEMS OF BUSINESS GROWTH ( & HOW TO OVERCOME)
POOR COMMUNICATION
USE LATEST IT
EXPANSION COST SO MUCH BUSINESS SHORT OF FINANCE
EXPAND SLOWLY & MAKE SURE ENOUGH LONG TERM FINANCE
DIFFICULT TO CONTROL; INEFFICIENCY
OPERATE IN SMALL UNIT (DECENTRALIZATION)
CHALLENGES OF INTEGRATING
INTRODUCE GOOD COMMUNICATION / MANAGEMENT STYLE
DISECONOMIES OF SCALE
GOVERNMENT SUPPORTING BUSINESS START-UPS
WHY?
GREATER CONSUMER CHOICE IN MARKET
COMPETITION → LOWER PRICES
JOB CREATION
COUNTRY WILL BENEFIT FROM AD. THAT LARGE COMPANIES BRING TO THE ECONOMY
HOW?
INFO / ADVICE FROM SPECIALIST AGENTS
FREE / SUBSIDED EMPLOYEE TRAINING SCHEMES
LOWER TAXATION FEE IN EARLY YEARS
RENT FREE PREMISES FOR A CERTAIN PERIOD OF TIME
INTEREST FREE / LOW INTEREST LOANS
WHY SOME BUSINESSES FAIL?
RISK OF NEW BUSINESS STARTUP
POOR (FINANCIAL) MANAGEMENT
OVER EXPANSION
POOR CHOICE OF LOCATION
WHY ARE NEW BUSINESSES AT A GREATER RISK OF FAILING?
WELL-ESTABLISHED FIRMS MIGHT HAVE FINANCE TO CONTINUE EVEN IF THEY ARE MAKING A LOSS
LIQUIDITY PROBLEMS
DIFFERENT WAYS A BUSINESS CAN GROW
INTERNAL GROWTH
DEVELOP NEW PRODUCTS
FIND NEW MARKETS FOR IT'S PRODUCTS
INCREASE NUMBER OF GOODS IT CAN PRODUCE ( MORE/BETTER MACHINERY)
EXTERNAL GROWTH
REFER TO CLASS NOTES