POB

May 14 , 2019

10 L

Small Business

The concept of ‘small business’ varies from organization to organization and is relative to the type of
business ; therefore it is impossible to give a precise definition. In describing a small business one
must consider

1. Amount of capital invested

2. Number of employees
3. Gross sales / receipts
4. Loud space available

Small business display the following characteristics:

1. Small Capital – Less than $250000

2. Small sales turnover
3. One – twenty employees
4. Simple Technology – usually manual labour
5. Occupying small land space

Advantages of Small Businesses

1. Improved Internal Communication

2. More Personal interactions with clients
3. Less complicated to start
4. Tend to benefit from government assistance

Disadvantages of Small Business

1. Usually involves unlimited liability

2. Seen as high risk making it difficult to access financing
3. Suspecting to economic pressures
4. Unable to complete cost savings in large firms

Roles and Functions of Small Business

1. Provide Personal Service

2. Respond to customers’ requests quickly
3. Act as the middleman and as source of information
4. Form the backbone of the economy
5. Help in the redistribution of income
6. Enhance the skills of the population
7. Increase national income and economic growth