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Enterprise, Business Growth and Size - Coggle Diagram

- - - - Independence
      - Able to put own ideas into practice
      - May become famous and successful
      - May be profitable --- income higher than employee wage
      - Personal interests and skills
    - - Risk
      - Lack of capital to start
      - Lack of knowledge
      - Not having a steady wage --- wage is dependent on business profits
    - - Hard Working
      - Risk Taker
      - Creative
      - Self-Confident
      - Innovative
      - Independent
      - Effective Communicator
    - - Questions
        
        What products/services am I making?
        
        Who am I making this for?
        
        What are my main costs?
        
        Will I sell enough products to pay for costs?
        
        Where will I place my business?
        
        What machinery is needed?
        
        How many people are needed for my business?
      - Contents
        
        Description of business: Summary, History, Objectives
        
        Products and Services: What business is selling/delivering, strategy for developing more products, product details, manufacture and distribution
        
        The Market
        
        Total Market Size
        
        Predicted Market Growth
        
        Target Market
        
        Analysis of Competitors
        
        Predicted changes in market
        
        Forecast sales revenue
        
        Marketing Strategy
        
        Organization Structure and Management: Organization Structure, Management, Details of Employees, Number of skills and skill level required for employees
        
        Financial Information
        
        Projected future accounting statements for next few years
        
        Sources of capital
        
        Predicted costs
        
        Forecast cash flow and variable costs
        
        Projections of profitability and liquidity ratios
        
        Business Strategy: Customer Satisfaction techniques, Brand Loyalty building, Summary
    - - Why support
        
        To reduce unemployment
        
        Increase competiton
        
        Increase output
        
        Benefit society
        
        To allow it to grow further
      - How to support
        
        Organizing training for entrepreneurs
        
        Enterprise Zones
        
        Loans for small businesses at low interest rates, grants if business is in bad economical area
        
        Grants to train employees to increase productivity
        
        Allowing universities to allocate research centers
- - - - Some businesses may use more capital than employees
    - - high level of output doesn't mean that a business is large when using other methods of measurement.
    - - Cannot be used for comparing businesses with different products
    - - Some businesses may use more employees than capital
  - - - Higher profits
      - More status and prestige
      - Lower average costs due to Economies of Scale
      - Larger share of Market
    - - Difficult to control
      - Larger business leads to poor communication
      - Expansion may be too costly
        
        Expansion must be slow, and finances must be calculated in advance
      - Integrating with another business is more difficult than expected
        
        Good communication with the other workforce
    - - Internal Growth: Business expands its existing operations
      - External Growth: When a business takes over or merges with another business
        
        Takeover vs Merger
        
        Takeover: One business buys out the owners of another business, which soon becomes a part of that business
        
        Merger: When the owners of two businesses agree to join their businesses together to make one business
        
        Horizontal Integration
        
        When one business merges with another one in the same industry at the same stage of production
        
        Advantages
        
        Reduced competition
        
        Opportunities for economies of scale
        
        Bigger share of total market
        
        Vertical Integration
        
        One business merges with another in the same industry but different stage of production
        
        Vertical Backward: Business merges with another in a lower stage of production
        
        Advantages
        
        Assured supply for product
        
        Profit margin absorbed
        
        Cannot supply for competition
        
        Cost of supply controlled
        
        Vertical Forward: Business merges with one in higher stage of production
        
        Advantages
        
        Assured outlet for product
        
        Profit margin absorbed
        
        Cannot sell for competion
        
        Information about customer preference and wants gained directly
        
        Conglomerate Integration
        
        When a business merges with another in a different industry
        
        Advantages
        
        Spread of risk
        
        Sharing of ideas
    - - Industry is incompatible for growth
      - Small Market Size
      - Owner's Objectives
    - - Lack of management skills
      - Changes in the business environment
      - Liquidity Problems
      - Over-Expansion