Risks of Small Business Ownership
While small businesses may not generate as much money as large corporations, they are a critical component of and major contributor to the strength of local economies.
Small businesses present new employment opportunities and serve as the building blocks of the United States’ largest corporations. 4. Define outsourcing, and describe its impact on small business. d. Outsourcing is any segment of a business in which its owner does not have special skills can be put up for sale, eliminated, or sent out for someone else to do. The effect it has on small business is twofold.First, many people who lose their jobs with large businesses start small businesses of their own.
Risks of Small Business Ownership Essay Example
Second, these new businesses often do the work that large businesses no longer perform themselves – temporary employment, cleaning services, and independent contracting, for example. 5. Why are small businesses more likely than large businesses to be innovative? e. The research and development departments of most large businesses tend to concentrate on the improvement of the products their companies already make. This practice makes sense for the companies trying to profit from their large investment in plant and equipment.If a company tried to invent something that would be different from what they are good at could cause problems. 6.
Explain the term creative destructions. f. The replacement of existing products, processes, ideas and businesses with new and better ones. 7. How can being close to your customers give you a competitive advantage? g. Being close allows them to provide individualized service and gives them firsthand knowledge of customer wants and needs. 8.
How would you show that small business is becoming more important part of the economy? h. Increased employment rates. 9.The text compares the failure rate for small businesses with the divorce rate in marriage and the student failure rate in college. Are these fair comparisons? i. NO. only about 18 percent of all new businesses are forced to close their doors with a loss to creditors.
The rest either close voluntarily or are still in business. Over the past several decades, the number of new businesses that have opened has approached or exceeded the number that havev closed 10. Describe four cases of small businesses failure. How does the quality of management relate to each of these causes? j. Neglect, inexperience, economic finance, and other. i.Neglect – planning for the future has been a miss for most because it seems to hard and time consuming.
ii. Failure to understand the commitment and hard work required for turning a business into a success. iii. Another mistake that small business owners make, particularly with rapidly growing businesses, is not hiring additional employees soon enough or not using existing employees effectively. iv. Finances are also a failure for companies. Inaccurate estimates of cash flow and capital requirements can swamp business quickly.
11. Describe the techniques that a business with which you are familiar has used to prevent its failure. k.I work for AT;T and even though it is not a small business I have witness their increased focus on customer care and ensuring customer are completely satisfied with service in the store and also with the network. This kind of technique will ensure they keep loyal customer coming back instead of losing them to competitors. 12. How would the computer industry be different today if there were no businesses with fewer than 500 employees? Would personal computers exist? l.
I feel it would be that same. Computers are used for everything now days. Without computers companies would struggle to stay alive. 13. Predict the future of small business.In what industries will it be most involved? What trends do you foresee? Will the failure rate go up or down? Will the importance of small business increase or decrease by the year 2020? m. I feel small business in the future will keeping increasing.
In the past few deacades it has proved to become more successful. Small businesses will get ever more specialized. Customers will increasingly seek customized products and services. The rise of innovations such as cloud computing, a flexible workforce and lower-cost manufacturing options will make it easier for small businesses to seek out product and service niches.