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Business Revision Notes: 1AS.3

Size of business
Measurements of business size
Different methods of measuring the size of a business

1. Number of employees

It can be misleading if the capital intensive rather than labor intensive

2. Sales turnover

Sales turnover is the total value of sales made by a…

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Advantages and disadvantages of being small business


Advantages Disadvantages


Easier to manage and control Lack of specialist management skills



Can adapt to external Limited access to sources of
environmental quick finance


Stronger ties, personal
relationships with customers. Limited access to sources of
Customers came back for product finance
[this is…

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The importance of small businesses and their role in
the economy
Even though there is no universally agreed definition of small firms. However, it is
easy to identify them within your own economy. Commonly, small,
microbusinesses employ few people and will have lower sales turnover compared
to other firms.

Small…

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Strength and weakness of family business



Advantages Disadvantages

Unclear, confusing, boundary problems ,
Casual, flexible, entrepreneurial; indecisive, resistant to change, lack of
Infrastructure
innovative management development; no
organization charts
Role confusion, lack of discipline,
Often play multiple roles, flexible,
nepotism [favoritism shown to family
Roles dual relationship and quick decision…

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Business Growth


Why and how a business might grow internally
The owners of many businesses do not want the firm to remain small ­ although
some do for the reasons of remaining in control, avoid risk, heavy workloads.
There are a number of possible reasons:



Increased profits ­ if the…

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