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Factors Influencing Small Business Growth

In entrepreneurship, the growth of small businesses is shaped by diverse factors. Economic conditions, regulatory environment, market dynamics, financial management, and internal factors like leadership and innovation play pivotal roles. Recognizing and navigating these influences are essential for small business owners seeking sustainable growth in a dynamic business landscape.

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Factors Influencing Small Business Growth

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  1. ENTREPRENEURSHIP Factors Influencing Small Business Growth

  2. Learning Objectives: • Define Small Business and its Economic Importance. • Identify External Factors Impacting Small Business Growth. • Examine Market Conditions Affecting Small Businesses. • Evaluate Internal Factors Influencing Small Business Growth. • Identify Challenges and Risks Associated with Small Business Growth.

  3. What is a Small Business? A small business is typically characterized by its size, scale of operations, and number of employees. In various contexts, the definition may vary, but it often includes businesses with fewer employees and lower revenue compared to larger enterprises.

  4. What is the Importance of Small Businesses for the Economy • Job Creation: Small businesses are significant contributors to employment opportunities, often serving as a crucial foundation for job creation within local communities. • Innovation and Entrepreneurship: Small businesses are known for their agility and ability to innovate. They play a pivotal role in introducing new ideas, products, and services to the market. • Economic Diversity: Small businesses contribute to economic diversification, reducing dependence on a few major industries. This diversity enhances the resilience of the overall economy.

  5. Overview of Factors Affecting Small Business Growth:

  6. Overview of Factors Affecting Small Business Growth:

  7. What do you mean by Revenue Growth? • Revenue Growth measures the percentage increase in a company's total revenue over a specified period. • It indicates the business's ability to generate more income. • It is often focused on expansion and sustainability. • Example:A small software company that increases its annual revenue from $500,000 to $750,000 demonstrates a 50% revenue growth.

  8. IT IS: • The profitability of a business can be defined as the business's ability to generate profit. This is a situation where the business's aggregate amount of revenue is greater than its aggregate amount of expenses for an accounting period. • Example: A small manufacturing business that improves operational efficiency to increase net profit margins.

  9. Yeah, About Market Share:

  10. MARKET CONDITIONS: • Market conditions relate to the attractiveness of the overall market in which a business operates. • Market conditions tend to affect all businesses in an industry, although their ability to take advantage, or respond to changes in market conditions will vary.

  11. INDUSTRY TRENDS • Industry or market trends are changes or developments that are happening within a particular field. • They can take many forms-from new technologies to shifts in consumer behavior. And they have the potential to create both opportunities and challenges for businesses. Eg: In the technology industry, the trend toward sustainability has led to increased demand for eco-friendly products.

  12. What Do You Mean By Competitive Landscape? • Competitive landscape refers to the list of options a customer could choose rather than your product. The list includes your competitors’ products and other types of customer solutions. • Eg: A new entrant in the smartphone market analyzing the market share and strategies of established competitors.

  13. Consumer behavior refers to the study of the customers/groups/organization’s behavior and how they behave while buying a product to satisfy their needs and all the activities associated with the purchase, use, and disposal of goods and services, and how the consumer's emotions, attitudes and preferences affect buying behavior. It refers to the actions of the consumers in the marketplace and the underlying motives for those actions. The consumers generally ought to be influenced while buying the goods or products.

  14. Technological Advancements refer to the continuous development and integration of new technologies into business processes. • Technology can drive efficiency, innovation, and competitiveness. • Example: The adoption of artificial intelligence in customer service to enhance responsiveness and personalization.

  15. Adapting to Market Conditions: • Emphasize the need for businesses to incorporate market conditions into their strategic planning. • Encourage flexibility and adaptability in response to dynamic market conditions.

  16. Reference: • https://blog.som.cranfield.ac.uk/bgpblog/factors-affecting-the-growth-of-small-businesses • https://bura.brunel.ac.uk/bitstream/2438/13913/3/FulltextThesis.pdf • https://www.youtube.com/watch?v=Q_1wnNBLwnI • https://www.researchgate.net/publication/341032732_Factors_Affecting_Small_Scale_Home-Based_Business_Performance_A_Literature_Review • https://core.ac.uk/download/pdf/286042662.pdf Links in QR Code

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