chapter 3

Question 1

Different methods of measuring the size of a business (5)

Answer 1

1. Number of employees working
2. Market share (Sale of the business as a proportion of the market sale )
3. Sales revenue
4. Capital invested | (The total value of long term finance
5. Capital employ | invested in the business)

Question 2

Advantages of being small business (3)

Answer 2

1. Complete control
2. NO legal requirement
3. Good owner-customer reationship

Question 3

Disadvantage of being small business (2)

Answer 3

1. Limited capital

2. Unlimited liability

Question 4

Advantage of Family business (3)

Answer 4

1. Strong commitment
2. Family members may work for lower salaries
3. Family members are able to solve each other’s problem

Question 5

Disadvantage of Family business (2)

Answer 5

1. Business suffer if the family members fight

2. Confused roles

Question 6

Define Small business (3)

Answer 6

1. Small business provide goods and service which a large business may not provide
2. Small business may cater to customers’ specific demands
3. it provide employment

Question 7

Why business grow (2)

Answer 7

1. To earn more profit

2. To have higher status

Question 8

How business might grow (2,1,1)(2,1,1)

Answer 8

INTERNAL GROWTH
- Offer more product 
- Location in other places 
EXTERNAL GROWTH
- By buying another business 
- By joining with another business