Discuss Forms Of Business Unit: Characteristics Of Small Business (Essay Sample)

Forms of Business Unit
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Characteristics of Small Business
There are various characteristics of a small business that differentiate it from another kind of business. Among them are:
A small business is characterized by a small number of customers it serves on a daily basis. Due to a little stock of the business, a few customers are attracted making it to have low customer turnover.
A small scale business has a short lifespan. There is high likely hood of a small business being terminated from the market due to a number of reasons which are not limited to high competition from large scale business, lack of human resources who have skills or running and managing a business, and among others.
Small-scale business is characterized by small revenue and profitability. Low revenue and profitability are because of little activities that such type of business involved on daily basis. Mostly, small business has revenue that can be exempted from taxation
Small business is as well characterized by a number of total employees in the business. The fact remains that, small business has few human resource, and mostly, the business is managed by the owner or family members (Stiffler et al., 2016). This is because the business lack ability to hire experts to carry out its operations
A small business is also seen by the amount of capital invested. Generally, a small business is characterized by small capital both capital assets and liquid assets. Normally, a small business has little capital assets such that, the owner has no capacity of investing into capital assets.
A small business is characterized by selling one single item. When a business is still small, the owner always concentrates on one particular good or service since managing a multiple of such items is strenuous given that, the business has little manpower. Also, because the business has no capacity of employing more man power that can assist on a multiple of items.
A small business is characterized by a small market area. Such kind of business always operates in small market segments. The business has no capacity of hiring a marketing team and also, lack ability to promote and advertise its goods and services (Winterhalter, Zeschky, & Gassmann, 2016).
Differentiating between a small and a larger business
Small Business

Large Business

Has a small capital investment

Has large capital investment

Owned by own one person or a family

Owned by a group of persons or shareholders

A small business is characterized by a small number of customers it serves on a daily basis.

A large business is characterized by big number of customers it serves on a daily basis.

The business has a small market share

The business has a larger market share

Small business has few human resource

Large business has more human resource

A small business is characterized by selling one single item. When a business is still small, the owner always concentrates on one particular good or service since managing a multiple of such items is strenuous given that, the business has little manpower.

A big business is characterized by selling a multiple of items. When a business is large, the owners always deals with more than one goods or services since the business has ability of managing a multiple of items given that, the business has ability to hire more manpower

A small business has little both capital assets and liquid assets

A large business has large both capital assets and liquid assets

Small-scale business is characterized by small revenue and profitability

Large-scale business is characterized by large revenue and profit margin

Small business has small economies of scale

A large business has large economies of scale

Small business has no financial ability to hire human resource expertise to run and manage the business

A large business has financial ability to hire human resource expertise to run and manage the business

A small scale business has a short lifespan. There is high likely hood of a small business being terminated from the market due to a number of reasons which are not limited to high competition from large scale business, lack of human resources

A large business has a long lifespan. There is high likely hood of a large business operating for a long period of time on the market due to having experienced human resource management that will support on a number of technical issues.

Types of Business Units
There are a number of business units. Each business unit has its own formation, management, and operation
1. Sole proprietorships: this type of business unit has no legal forming procedures. The business requires little capital to start and it is owned by one person or managed by a family. This kind of business unit is characterized by selling one single item. When a business is under a sole proprietor, the owner always concentrates on one particular good or service since managing a multiple of such items is st...