Factors that determine size of a business!

[Mellorando]

A lot of people go into business without considering various factors that could boost or diminish the life of the business that they intend to establish as an entrepreneur or a business man it is your dual responsibility to make a survey or make a research on what exactly could boost the life of a business in terms of making more money and competing with the available competitors below is what I called the factors that an entrepreneur business man need to consider before going into business:
But note that, the size of an average firm varies from country to country. We have, on the one hand, giant concerns in the United States and Germany and tiny businesses in small Indian towns. Why is it so? There are a number of factors which determine the size of a business unit in a country.

1. Entrepreneurial Skill:
The most important factor of comes is the skill, initiative and resourcefulness of the entrepreneur. Everything depends on his judgment and ability. An entrepreneur of outstanding ability will be able to procure as much finance as he may need, hire the requisite labor force and build up a huge business. But an entrepreneur of moderate ability will run business on a moderate scale and a man of limited entrepreneurial skill will be content with a small business

2. Managerial Ability:
For running the routine part of the business, managers are appointed. If a firm is lucky enough to have a manager of great ability, the size of the firm will grow to considerable dimensions. On the other hand, a mediocre manager will have a small-sized firm to manage.

3. Availability of Finance:
It is finance which oils the wheels of business machine. If ample funds are available, it will help the entrepreneur to make his business grow to a big size. This requires a proper development, of the banking system so that savings of the community can be effectively mobilized and utilized in the development of trade and industry.

4. Availability of Labour:
Another factor on which the size of the firm depends is the availability of labour of requisite skill. After all, what can the entrepreneur even with large capital do, if the labour to man the business is not available? What is required is efficient and skilled labour.

5. Nature of Business:
Much also depends on the nature of business. If the business obeys the law of increasing Returns, it will grow to a big size, otherwise, in the case of diminishing returns it will remain stunted, and in the case of constant returns it will remain stagnant.

6. Extent of the Market:
The size of the firm also depends on the extent of the market. If the commodity in which the firm deals or which it-manufactures has a wide market, naturally the business will assume a large scale. But if the demand for the commodity is fitful or limited, the size of the firm will continue to be small. These are some of the factors on which the size of an average firm in a country depends.

 

[Abee111]

The six main factors responsible for determining the size of the firm are as follows:
1. Entrepreneurial Skill 2. Managerial Ability 3. Availability of Finance 4. Availability of Labour 5. Nature of Business 6. Extent of the Market.
The size of an average firm varies from country to country. We have, on the one hand, giant concerns in the United States and Germany and tiny businesses in small Indian towns. Why is it so? There are a number of factors which determine the size of a business.
Entrepreneur skills
The most important factor of comes is the skill, initiative and resourcefulness of the entrepreneur. Everything depends on his judgment and ability. An entrepreneur of outstanding ability will be able to procure as much finance as he may need, hire the requisite labor force and build up a huge business. But an entrepreneur of moderate ability will run business on a moderate scale and a man of limited entrepreneurial skill will be content with a small business
Management ability
For running the routine part of the business, managers are appointed. If a firm is lucky enough to have a manager of great ability, the size of the firm will grow to considerable dimensions. On the other hand, a mediocre manager will have a small-sized firm to manage.
Availability of finance
It is finance which oils the wheels of business machine. If ample funds are available, it will help the entrepreneur to make his business grow to a big size. This requires a proper development, of the banking system so that savings of the community can be effectively mobilized and utilized in the development of trade and industry.
Availability of labour
Another factor on which the size of the firm depends is the availability of labour of requisite skill. After all, what can the entrepreneur even with large capital do, if the labour to man the business is not available? What is required is efficient and skilled labour.
Nature of the business
Much also depends on the nature of business. If the business obeys the law of increasing Returns, it will grow to a big size, otherwise, in the case of diminishing returns it will remain stunted, and in the case of constant returns it will remain stagnant.
Extent of the market
The size of the firm also depends on the extent of the market. If the commodity in which the firm deals or which it-manufactures has a wide market, naturally the business will assume a large scale. But if the demand for the commodity is fitful or limited, the size of the firm will continue to be small. These are some of the factors on which the size of an average firm in a country depends.

 

[Deleted member 28127]

Availability of finance is the most problem faced by companies as they could have lack of solvability or cash during hole the year because most of the clients pay per check.

 

[Kingsley]

When it comes to the business growth and development there are somany factors that determines how well the business will grow. The size of a business organization is not only determined by the financial strength of the business organization. Although finance plays a major role in business expansion, however we have seen somany rich entrepreneurs who have access to more than enough funds to expand their business organization but still the business is not doing so well in terms or growth and development. Even this does not apply solely to busienss ventures but governments in countries, those political leaders are employed to bring about growth and development in an economic settings, and they have access to all the reasosurse that there is in the country but still they have nothing to offer rather than move the economy forward they become even more retrogressive.

So finance might not be the only factor that makes a business to move forward or expand in size, I think the key factor is managerial setup that is put in place to manage the resources that is available to the organization. The organization can never improve more than the hands that are assigned to manage it.

 

[Mataracy]

The factors that determined the expansion of the business is that when there is a good management in the organization there will be a reason to expand the business.

When the workers or employees are really doing well then ; the returns in the company will be great and there will be good returns.

Capital is also important in this aspect because with this one can expand his or her company.

Also when the relationship between the customers and the company then there will be more sales and increase in profit that will be coming in.
The environment where the company located is also matter a lot and it can influence the growth of the business.

 

[Sotherefore]

The availability of labour may not really be put into consideration because there will always be availability of people to employed into your business to help you in one area of your business or the other but to me I believe the most important things that determines the level of success in most businesses is just the availability of capital.

When there is required capital that is needed to start up the business to a stage of employing many people into the business then the business is likely to be larger in size compared to people who do not have the needed capital.


Then another important thing that also determine the level and the size of a business is just the location because if a business is being established in the rural settlement then there may be no need for you to establish the business to its full potential since the business may not really be profitable in such a location,

Availability of raw materials for production will also determine the size of a business and all these things we were taught is secondary school when we were dealing with business and marketing.. it's just so nice I can be able to remember some of them.

 

[eldavis]

The amount of capital invested in the business also plays a major role on the size of the business. Though there have been cases where people who started small where able to grow the business to something big through lots of hard work and consistency, meaning the starting point is usually not the main issue but how it ends. The amount of hard work and consistency you put into the business also determines how far the grow.

 

[funmi]

Of course one of the major factors that determines the size of a business is the nature or type of business that one actually has in mind. If the nature of business has to do with hoteling then you may start small but with time there should be tendencies that the business will certainly expand. Again if the business has do with selling of processing of rice you can aswel start small with the local processing techniques but with time it will still expand. But there are some kind of business that might require a lot of space to start like commercial farming. It will definitely require a lot of space to.start the operations.


Another factor that determines the size of a business is the strength or seize of the capital involved in starting the business. When the capital is small there is certainly anything anyone can do the business will certainly start small until the capital begins to increase that is how it is. Then again the available space can also be another major concern, if the available space is small the business will have to make do with that. Lastly I with.say the level of technical know how .

 

[TOZZIBLINKZ]

Above all other factors I strongly believe that the availability of finance and the availability of labour strongly determines how if a business would be in large-scale or a small scale . The availability of finance in other words the availability of initial capital helps a person who determine to go into business to know whether the business will be an industrial type , a semi- industrial type or a manual based type . Most equipment and machines are expensive and so it requires people or business establishers with huge amount of initial capital to acquire them . And most business machines are prone to damage and require lots of money for maintenance , and so if your business finance isn't strong enough it could lead to poor equipment finance .

On the other hand availability of labour strongly determines a business size . If a business owner establishes his or her business in an area with low rate of labour business profit wouldn't increase which in turn is necessary to boost to business size . that is why it is advisable that when establishing a business it must be situated in an area where labour is fully available and rich .

 

[btaliat]

Business expansion is detemrined by many factors most time. But the major one is the capital. The more capital a business owner can afford to start a business with will determine the size of such a business. That's why some intending business business owner go as far as borrowing money to expand their business size.

The.competency of the manager also contributes to the size of a business. There are some managers that are so skillful and know how to turn small size business to large one within some years. A business that's handled by such a manager can see turn around and can be easily be expanded.

The nature of the business and well determine the size of the business. Food business for Instance may not be expanded to some extent beyond selling of some particular food. Let's take for an instance, there are some special foods and dishes for special location. So a oerosm in this business will only be limited to the sellikg of those foods alone.