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Measuring Business Size: Understanding the World's Largest Companies and Small Business Significance

This research explores the measurement of company size and identifies the largest company globally based on various criteria, such as employee count, sales turnover, and market capitalization. It emphasizes the importance of small businesses in the economy, including their job creation and innovation role. The analysis includes advantages and disadvantages of small businesses, methods of measurement, and government support. Students preparing to launch their own small business can use this information for a viable plan showcasing their unique benefits and competitive edge.

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Measuring Business Size: Understanding the World's Largest Companies and Small Business Significance

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Presentation Transcript

  1. Its a question of size! • Research: • Whatisthebiggestcompany in theWorld? • (youneedtojustifyyouranswer).

  2. Its a question of size! • How can wemeasurethesize of companies? • Againsteachcriteriathatyou come up with;findthecompanythatisthebiggest in theWorld.

  3. Size of business Measurement of business size Significance of small businesses Internal growth

  4. Measurement of business size Learning objectives • Identification of different ways to measure the size of a business

  5. Measuring business size • Methods (more useful when comparing firms in same industry): • Number of employees • Problem: highly automated firms • Sales turnover • Problem: high-value production vs low-value production • Capital employed – long-term investment • Problem: Firms in different industries have very different capital equipment needs • Market capitalisation = • Problem: share price changes everyday • Market share = • Problem: more than one way to measure this.

  6. Other forms of measurement • Number of outlets • Total floor sales space – supermarkets • Number of guest rooms • Number of students • No best measure – depends on the need • Good to compare on at least two criteria

  7. Significance of small businesses Learning objectives • Be able to identify the advantages and disadvantages of being a small business • Know the strengths and weaknesses of family businesses • Understand the importance of small businesses and their role in the economy • Know the role of small businesses within the economy

  8. Significance of small businesses • UK: • Turnover less than £2m a year • Assets less than £950,000 • Employees less than 50 • They are very important to all economies

  9. Significance of small businesses • Create many jobs • Create new product ideas – greater choice for consumers • Compete with larger firms – eg. the cost of air travel has been reduced significantly due to small airlines • Possibility to grow into large companies – eg. The Body Shop, Hewlett-Packard, Tesco, Microsoft • Lower average costs allow small businesses to offer lower prices to the consumer

  10. How do governments assist small businesses • Reduced rate of income tax • Loan guarantee scheme • Providing information • Subsidised rent in some areas

  11. What problems do small businesses have • Lack of specialist management expertise • Problems raising finance • Limited product range • Finding suitable and reasonably priced premises

  12. Student activity You are setting up your own small business in Lima with some friends. Prepare a verbal description for the rest of the class explaining • What your business does. • The advantages that you will have as a small business.

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