Business size
The simplest way to measure a businesses size
Number of emplyees
Amount employees in a small business
5-19 employees
Define family owned business
Actively owned and managed by at least two family members, they have complete ownership and are usually small
Define increased profits
Expanding the business and achieveing higher sales to be more profitable
Amount of ways to measure a businesses size
five(5)
Define emplyoment creation
When a new business is established in an area that opens more job oppurtunities
Name 2 strengths
1. Commitment
4. Reliability and Pride
3. Knowledge continuity
*Any of the three above
Define increased market share
The demand in the market which will give a higher market profile and greater barganing power
The total value of a company's issued shares
Market share
Name 2 benefits
1. Less risk of losing control.
2. Offer personal service to customers to build customers loyalty.
3. Business culture is informal, employees are well-motivated and family members perform multiple roles
4. Able to adapt quickly, to meet changing customer needs.
5. Easy to know each worker
6. Usually starter up with low capital investment
*Any of the six above
Name 2 Weaknesses
1. Succession/continuity problem
2. Informality
3.Tradition
4.Conflict
*Any of the four above
Reduced risk of being a takeover target
A large business may become too large of a target for a potential predatory company
total sales of business/total sales of industry
OR
total no. units sold of company/total sales of market
Name 2 risks
1. Limited access to source of finance
2.Owner carries responsibilities & unable to afford specialist managers
3. If owner/important worker(s) absent, other employees may not have the necessary skills to operate business.
4. Greater risk of external change having negative impact.
5. Few opportunities for economics of scale, average costs could be high.
*Any of the two above
Describe 'reliability and pride' in strength of family business
Define increased power and status of owners and directors
Opportunity to gain publicity or influence government
The total value of all long-term finance invested in the business
Capital employed
Significance of small business
1. Create employment
2. New ideas for consumer goods and services
3. Create competition for larger business
4. Important suppliers to larger businesses
5. All great businesses were small at one time
6. Lower average costs than larger ones
Define 'informality' in weaknesses of family business
When the members have little interest in setting clear boundaries/rules & formal business procedures & practices due to the status of family. Leading to inefficiencies & internal conflicts.
When you put less inputs and more outputs to fulfill demand