Podcast
Questions and Answers
What are three key factors that can determine the size of a business?
What are three key factors that can determine the size of a business?
Turnover, number of employees, and total assets invested.
How does turnover help in assessing the relative size of businesses?
How does turnover help in assessing the relative size of businesses?
Turnover indicates the total revenue generated, and comparing it among similar businesses helps gauge their sizes.
What is one advantage of small businesses in terms of customer service?
What is one advantage of small businesses in terms of customer service?
Small businesses can offer personalized service to customers, fostering stronger connections.
What is a disadvantage small businesses face related to funding?
What is a disadvantage small businesses face related to funding?
How do small businesses benefit from their size in decision-making?
How do small businesses benefit from their size in decision-making?
Flashcards
Turnover
Turnover
The total revenue generated by a business from selling goods or services.
Number of Employees
Number of Employees
The size of a workforce, measured by the number of individuals employed by a company.
Total Investment
Total Investment
The total amount of money invested by the owner of a business, including assets and resources.
Balance Sheet
Balance Sheet
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Flexibility
Flexibility
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Study Notes
Business Size
- Business size is determined by factors like turnover, number of employees, total assets invested, and balance sheet information.
- Turnover represents total revenue from sales; comparing turnover of similar businesses reveals relative sizes.
- Employee count measures workforce size; more employees generally indicate a larger business.
- Owner investment reflects business size; greater investment suggests a larger business.
- Balance sheet analysis examines assets and liabilities; it's crucial for evaluating financial health and overall size.
Advantages of Small Businesses
- Flexibility: Small businesses adapt quickly to market changes due to their smaller size and streamlined decision-making.
- Personal Service: Personalized customer service fosters stronger connections and loyalty.
- Lower Costs: Lower wages and smaller scale lead to lower operating costs.
- Effective Communication: Smaller team sizes enable faster and more efficient communication.
- Ability to Take Risks: Calculated risks are possible without the image and reputation concerns of larger businesses.
Disadvantages of Small Businesses
- Higher Costs: The inability to exploit economies of scale (bulk buying and discounts) results in higher costs per unit.
- Difficult Access to Funding: Financial institutions often view small businesses as higher risk, making funding harder to obtain.
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Description
Explore the different factors that determine the size of a business, including turnover, number of employees, total assets, and balance sheet information. Additionally, learn about the advantages that small businesses have, such as flexibility and adaptability in the market. This quiz will deepen your understanding of business classification.
