Business Notes

Entreprise
The Nature of Business Activity

The purpose of business activity

Business is an organization that uses resources to provide products and services to satisfy
the needs of customers they demand. Business activity at all stages involves adding value
to these resources like raw materials, to make them more desirable or valuable to the final
purchaser. Without business activity we would be limited to what we can produce
ourselves becoming like most remote communities. Business activity also improves our
standards of living.

What do businesses do
●​ Provide products and services to satisfy customer wants or needs oftenly at a
profit.
●​ Purchase resources for production.
●​ Identify the needs and wants of customers.

The factors of production needed for business activity

Land: not only land but the renewable and nonrenewable resources provided by nature
e.g coal, timber, crude oil

Capital: not just finance but manufacturing resources needed to assist in production like
capital goods e.g offices, computers

Labour: manual and skilled labour make up the workforce of the business

Entreprise: the initiative and coordination taken by risk-taking individuals know as

entrepreneurs who bring the factors of production together into a unit capable of
producing a product or service

The concept of adding value

When the selling price of a product has higher value than the cost of materials used to
make it then added value has taken place. It can be identified as if customers are
prepared more than the cost then the business has successfully added value. This makes
it easier for the business to make financial returns to the owners. But this is not profit as
the business still has to pay for other costs.

Influential factors include:

 ●​ Display
●​ Customer service
●​ Branding and packaging
●​ Advertising

The Economic Activity, the problem of choice and opportunity cost

There aren’t enough resources to produce or satisfy the unlimited wants needed to
satisfy customers. Therefore people need to choose to bring the concept of opportunity
cost. Opportunity cost is the value of the next best alternative forgone when making a
choice.

The dynamic business environment

This means the business is constantly changing and it is influenced by:

Legal changes: limitations to who can buy the product

Economic changes: consumers are left with less money to spend.

New competitors in the market

Technological changes: processes or products of the new business may be outdated

Why business succeed or fail

Succeed:

●​ Flexible decisions and ability to adapt to new situations

●​ Effective management of operations
●​ Good finances
●​ Ability to identify and provide customer needs and wants

Fail:

●​ Lack of cash
●​ Poor management
●​ Poor record keeping

Local: are businesses that operate within well defined parts of the country

National: are businesses that operate across the country

International: are businesses that sell products to other countries

Multi national: has operations in two or more countries

Role of Entrepreneurs and Intrapreneurs

●​ A business needs enthusiasm and creativity to succeed, not just resources like
land, labor, and finance.
●​ New businesses can be based on new product ideas or new ways of offering
services.
●​ Entrepreneurs and intrapreneurs help businesses grow by innovating and
adapting products or services.

Role of an Entrepreneur in Starting a Business

1.​ Have a business idea

2.​ Create a business plan
3.​ Invest their own money
4.​ Manage the business
5.​ Take risks and accept possible failure

Qualities of Successful Entrepreneurs & Intrapreneurs

1.​ Innovation – Identify market gaps, attract customers, and offer unique
products/services.
2.​ Commitment & Self-Motivation – Hardworking, dedicated, and ambitious.
3.​ Multi-skilled – Able to handle production, marketing, sales, and finances.
4.​ Leadership Skills – Motivate and guide employees.
5.​ Self-Confidence & Resilience – Believe in their idea and recover from failures.
6.​ Risk-taking – Willing to take financial and business risks to achieve success.

Barriers to Entrepreneurship
Entrepreneurs face several challenges when turning their business ideas into reality.

1. Lack of a Business Opportunity

Entrepreneurs need to find viable business ideas, which can come from:

●​ Personal skills or hobbies (e.g., dressmaking, car repairs).

●​ Previous work experience in a related field.
●​ Franchising events that showcase business opportunities.
●​ Market research (e.g., checking local business directories online).

Common small business industries:

 ●​ Fishing, farming, craftwork, building trades.
●​ Hairdressing, computer repairs, cafés, childminding.

2. Lack of Capital (Finance)

Many entrepreneurs struggle with funding because of:

●​ Limited personal savings.

●​ Unawareness of financial support options.
●​ No trading history to prove business success.
●​ Weak business plans that fail to attract investors.

3. High Costs of Good Locations

●​ Expensive locations may not be affordable for new businesses.

●​ Many entrepreneurs start from home to reduce costs, but this has drawbacks:
○​ May not be in the best market area.
○​ Lacks business credibility.
○​ Can cause family conflicts.
○​ Hard to separate personal and work life.

4. Competition from Established Businesses

●​ New businesses must compete with larger firms that have more resources and
experience.
●​ To stand out, entrepreneurs should offer:
○​ Unique products.
○​ Better customer service.

5. Lack of a Customer Base

●​ A new business must attract and retain customers quickly to survive.

●​ Strategies to build customer loyalty:
○​ Personalized service.
○​ Helpful pre- and post-sales support.
○​ Fulfilling special customer requests that bigger firms ignore.

Business Risk and Uncertainty

There is a key difference between business risk and business uncertainty:

Business Risk

●​ Business decisions always involve some risk.

●​ Risk can be measured, calculated, and reduced through planning.
●​ Example: If 10 new clothing stores open in a city and 3 fail, the risk of failure is
30%.
 ●​ Entrepreneurs can reduce risk by analyzing why businesses fail and avoiding
similar mistakes.

Business Uncertainty

●​ Business uncertainty cannot be predicted or measured.

●​ Unexpected events, like economic downturns or pandemics, can severely impact
businesses.
●​ Example: The COVID-19 pandemic (2020) led to mass business closures, which
was unforeseen and difficult to prepare for.

Role of Enterprise in Economic Development

Governments encourage entrepreneurship due to its many economic benefits:

1. Employment Creation

●​ Entrepreneurs create jobs for themselves and others.

●​ Successful businesses hire more workers, reducing unemployment.
●​ Expanding businesses create jobs indirectly in supply chains.

2. Economic Growth

●​ Increased production from businesses raises a country’s Gross Domestic

Product (GDP).
●​ Economic growth leads to higher living standards.
●​ More business activity means higher tax revenues for the government.

3. Business Survival and Growth

●​ While some start-ups fail, others expand and replace declining industries.
●​ Example: In Trinidad and Tobago, the decline of the sugar industry was offset
by tourism.

4. Innovation and Technological Change

●​ New businesses drive innovation and competitiveness.

●​ Tech start-ups introduce advanced solutions, helping industries improve
efficiency.

5. Exports and International Trade

●​ Some start-ups expand beyond local markets and begin exporting.

●​ This increases national exports and improves global competitiveness.

6. Personal Development
 ●​ Entrepreneurship fosters skills development and a sense of achievement.
●​ Successful entrepreneurs set an example for others, leading to more new
businesses.

7. Increased Social Cohesion

●​ High unemployment leads to social problems.

●​ By creating jobs and opportunities, entrepreneurship strengthens
communities.

The Role of Intrapreneurship

What is Intrapreneurship?

●​ Intrapreneurship means encouraging employees to act like entrepreneurs

within an existing company.
●​ It promotes creativity, risk-taking, and innovation to adapt to changes.
●​ Businesses that do not encourage intrapreneurship risk losing talented
employees to start-ups.

Benefits of Intrapreneurship

1.​ Encourages Creativity & Innovation – Helps businesses develop new

products and improve existing ones.
2.​ Improves Business Efficiency – Introduces better problem-solving methods.
3.​ Drives Change & Adaptability – Helps companies stay competitive in evolving
markets.
4.​ Creates a Competitive Advantage – Leads to unique, innovative products.
5.​ Retains Talent – Encourages employees to stay and innovate within the
company instead of leaving to start their own business.

Key Difference: Entrepreneur vs. Intrapreneur

Example:

●​ An entrepreneur starts a new business (e.g., a food delivery app).

●​ An intrapreneur creates a new service within a company (e.g., developing a
delivery service for a restaurant chain).

Encouraging intrapreneurship helps businesses adapt, grow, and stay ahead of

competitors.

Purpose and Key Elements of Business Plans

A business plan is essential for securing investment and guiding a business toward
success. It provides evidence that an entrepreneur has carefully planned for the future,
increasing the likelihood of obtaining financial support from bankers, venture
capitalists, or shareholders.

Key Elements of a Business Plan:

1.​ Executive Summary​

○​ A brief overview of the business, its goals, and strategies.

2.​ Description of the Business Opportunity​

○​ Information about the entrepreneur’s skills, experience, and

qualifications.
○​ Details about the product/service being offered.
○​ Identification of the target market and potential customers.
3.​ Marketing and Sales Strategy​

○​ Explanation of why customers will buy the product.

○​ Strategies for reaching customers and selling the product effectively.
4.​ Management Team and Personnel​

○​ Roles and responsibilities of the entrepreneur and recruited

employees.
○​ Information on the skills and experience of the management team.
5.​ Operations​

○​ Premises required for business activities.

○​ Production facilities and IT systems needed for smooth operations.
6.​ Financial Forecasts​

○​ Projections for sales, profit, and cash flow for at least one year.
○​ Used to convince investors that the business is financially viable.

Benefits of Business Plans

1.​ Securing Finance​

○​ Investors and banks require a well-prepared business plan before

providing funding.
2.​ Forces Entrepreneurs to Think Critically​

○​ Helps identify strengths, weaknesses, risks, and opportunities.

 ○​ Ensures a realistic and well-thought-out business approach.
3.​ Provides a Clear Plan of Action​

○​ Guides decision-making in the early stages of the business.

○​ Reduces uncertainty by outlining goals and strategies.
4.​ Improves Business Success Rate​

○​ A business with no clear purpose, marketing strategy, or staffing plan

is more likely to fail.

Limitations of Business Plans

1.​ Does Not Guarantee Success​

○​ A plan is based on forecasts and assumptions that may not always be

accurate.
2.​ Requires Strong Supporting Evidence​

○​ If the business plan is not detailed and backed by research, investors

may delay funding decisions.
3.​ Risk of Inflexibility​

○​ Entrepreneurs might stick too rigidly to the plan and miss new
opportunities.
○​ A good plan should allow for adaptability in response to external
changes.

Conclusion

A business plan is a crucial tool for entrepreneurs, helping to secure funding, provide
direction, and reduce risk. However, it should be flexible and regularly updated to
adapt to changing market conditions and new opportunities.
Economic Sectors and Their Importance

Business activities can be classified into four main economic sectors based on the type
of products or services they produce. These sectors represent different stages in the
transformation of natural resources into finished goods and services.

The Four Economic Sectors:

1.​ Primary Sector​

○​ Involves extracting natural resources from the earth.

○​ Examples: farming, fishing, mining, forestry, oil extraction.
2.​ Secondary Sector​

○​ Involves manufacturing and construction.

○​ Uses raw materials from the primary sector to create finished goods.
○​ Examples: factories, car manufacturing, textile production, building
houses.
3.​ Tertiary Sector​

○​ Involves providing services to consumers and businesses.

○​ Examples: retail, banking, education, healthcare, transportation,
tourism.
4.​ Quaternary Sector​

○​ Involves knowledge-based industries such as research, technology, and

information services.
○​ Examples: software development, biotechnology, data analysis,
consulting services.

Changes in the Importance of Economic Sectors

The contribution of each sector to an economy changes over time due to

industrialisation and deindustrialisation.

Industrialisation (Growth of the Secondary Sector in Developing

Countries)

Developing economies, especially in Africa and Asia, have seen a decrease in primary
sector activities and an increase in secondary sector industries. This shift is called
industrialisation.
Benefits of Industrialisation:

●​ Increases national output (GDP), improving living standards.

●​ Encourages local production, reducing imports and increasing exports.
●​ Creates job opportunities in factories and related industries.
●​ Higher corporate tax revenue for the government.
●​ Adds value to raw materials instead of exporting them unprocessed.

Problems of Industrialisation:

●​ Mass migration from rural areas to cities can cause housing shortages and
social issues.
●​ High import costs for raw materials and machinery.
●​ Dependence on multinational companies, which may exploit local resources
and labor.

Deindustrialisation (Decline of the Secondary Sector in Developed Countries)

Developed countries, such as the UK and the US, have experienced a decline in
manufacturing and a growth in the tertiary and quaternary sectors. This shift is
called deindustrialisation.

Causes of Deindustrialisation:

●​ Rising incomes lead consumers to spend more on services (e.g., tourism,

financial services) rather than manufactured goods.
●​ Increased competition from global industrialisation, as developing countries
produce goods more cheaply.
●​ Automation and technological advancements reduce the need for factory
workers.

Consequences of Deindustrialisation:

●​ Job losses in agriculture, mining, and manufacturing industries.

●​ Greater reliance on imported goods rather than domestic production.
●​ Growth of the service sector, leading to higher employment in banking, IT,
healthcare, and retail.

Conclusion
Economic sectors evolve over time based on technological advancements,
globalization, and consumer preferences. Developing countries are shifting toward
industrialisation, while developed nations are moving toward service-based
economies due to deindustrialisation.

Urbanization and Employment

●​ People are increasingly moving to towns and cities.
●​ Job opportunities are growing in service industries (tertiary and quaternary
sectors).
●​ Workers often need retraining programs to transition into service industry roles.

Economic Sectors and Their Importance

●​ Different economies have varying levels of reliance on primary (agriculture,

mining), secondary (manufacturing), tertiary (services), and quaternary
(technology, research) sectors.
●​ The significance of each sector depends on the country's development level.

Public vs. Private Sector

●​ Public Sector: Government-owned organizations providing essential services

like healthcare, education, defense, and infrastructure.
○​ These services often prioritize social benefits over profits.
○​ Public corporations can be inefficient due to lack of profit-driven goals
and government interference.
●​ Private Sector: Businesses owned by individuals or groups that operate for
profit.
○​ Private sector businesses range from small sole proprietorships to
multinational corporations.
○​ Free-market economies have dominant private sectors, while command
economies have a larger public sector.

Forms of Business Ownership

1. Sole Trader

●​ A business owned by one person, common in retail, construction, and catering.

●​ Advantages:
○​ Easy to set up with no legal formalities.
○​ Full control and decision-making power.
○​ Retains all profits.
○​ Close relationships with customers and staff.
 ●​ Disadvantages:
○​ Unlimited liability (personal assets can be lost if the business fails).
○​ Difficulty in raising capital.
○​ Long working hours and high competition.
○​ No continuity if the owner dies or leaves the business.

2. Partnership

●​ A business owned by two or more people.

●​ Typically operates under a Deed of Partnership to define roles and
profit-sharing.
●​ Advantages:
○​ Shared decision-making and responsibilities.
○​ More capital is available.
○​ Business losses are shared.
●​ Disadvantages:
○​ Unlimited liability for all partners.
○​ Profits must be shared.
○​ Lack of continuity if a partner leaves or dies.
○​ All partners are legally responsible for each other’s decisions.

Limited Companies: Key Features and Differences

A limited company differs from sole traders and partnerships in three main ways:

1.​ Limited Liability – Shareholders are only responsible for the amount they
invest. If the company fails, they do not have to pay additional money.​

○​ Encourages investment, as shareholders' personal assets are protected.

○​ Banks and suppliers take on the risk, so they carefully examine the
company’s financial health.
2.​ Legal Personality – The company is a separate legal entity from its owners.​

○​ Can sue or be sued as a company, not as individuals.

○​ Protects owners from legal issues caused by the company.
○​ However, directors can still be held responsible for misconduct (e.g.,
knowingly running a bankrupt company).
3.​ Continuity – The company continues to exist even if an owner or director dies.​

○​ Shares are inherited, ensuring smooth business operation.

Types of Limited Companies

1. Private Limited Companies (Ltd or Pte)

Small and medium-sized businesses often choose this structure.

Advantages:​
✔ Shareholders have limited liability (personal assets are safe).​
✔ The company is a separate legal entity.​
✔ Continuity – The business does not close if a shareholder dies.​
✔ The original owner usually keeps control.​
✔ Can raise money by selling shares to family, friends, and employees.​
✔ More credibility than sole traders.

Disadvantages:​
✖ Legal requirements to set up the company.​
✖ Cannot sell shares to the general public (limits fundraising).​
✖ Harder for shareholders to sell their shares.​
✖ Must submit annual accounts to the government, reducing privacy.

2. Public Limited Companies (plc or inc.)

Used by large businesses to raise substantial funds.

●​ Can sell shares to the general public via the stock exchange.
●​ Helps businesses expand and grow significantly.

Public Limited Companies (plc): Key Features

A public limited company (plc) has all the benefits of a private limited company plus
the ability to sell shares to the general public through the stock exchange.

Advantages of Public Limited Companies:

✔ Shareholders have limited liability (personal assets are safe).​

✔ The company has a separate legal identity (can sue or be sued).​
✔ Continuity – The business continues even if shareholders change.​
✔ Easy for shareholders to buy and sell shares, making it attractive to investors.​
✔ Can raise large amounts of capital by selling shares to the public (flotation/IPO).

Disadvantages of Public Limited Companies:

✖ Legal formalities required for formation.​

✖ High costs of hiring experts for setting up the company.​
✖ Share prices fluctuate, sometimes due to external factors (e.g., economy).​
✖ Must publish financial reports for public and shareholder transparency.​
✖ Risk of hostile takeovers (anyone can buy enough shares to gain control).​
✖ Directors may focus on short-term profits to satisfy investors, instead of long-term
growth.

Ownership vs. Control in a plc

●​ Shareholders own the company, but directors manage it.

●​ Shareholders elect a board of directors at the Annual General Meeting (AGM).
●​ Conflict can arise between investors (who want quick profits) and directors
(who may focus on long-term growth).

Example: Some companies choose to return to private limited status to regain control
(e.g., Richard Branson’s Virgin Group).

Legal Requirements to Set Up a Company

Governments require companies to submit key documents to protect investors and
creditors:

1.​ Memorandum of Association – States the company’s purpose and maximum

share capital.
2.​ Articles of Association – Defines internal rules, management structure, and
shareholder rights.

Once approved, a Certificate of Incorporation is issued, allowing the business to trade

legally.

Cooperatives: An Alternative Business Model

Cooperatives are businesses owned and operated by their members, commonly
found in agriculture and retail.

Key Features of Cooperatives:

✔ All members participate in decision-making and share responsibilities.​

✔ Each member has one vote, regardless of investment size.​
✔ Profits are shared equally among members.

Types of Cooperatives:

1.​ Producer/Worker Cooperatives – Members manufacture goods.

 2.​ Consumer/Retail Cooperatives – Members sell goods/services.

Advantages of Cooperatives:

✔ Bulk buying reduces costs.​

✔ Members work together to solve problems and make decisions.​
✔ Motivated workforce because profits are shared.

Disadvantages of Cooperatives:

✖ Poor management unless professionals are hired.​

✖ Limited capital since shares cannot be sold to non-members.​
✖ Slow decision-making due to group voting.

Franchises

A franchise is a legal agreement between a franchiser (the business owner) and a

franchisee (the individual or company buying the right to operate the business under
the franchiser’s name).

The franchisee gets access to the brand name, logo, products, and marketing
strategies of the franchiser but must follow the franchiser's rules and pay fees.

Examples: McDonald's, Ben & Jerry’s.

Advantages of Franchises:

✔ Lower risk of failure because the business is already well-known.​

✔ The franchiser provides training and advice.​
✔ National advertising is paid for by the franchiser.​
✔ Supplies are pre-approved and quality-checked.​
✔ No competition from another franchise in the same local area.

Disadvantages of Franchises:

✖ A percentage of revenue must be paid to the franchiser annually.​

✖ The initial franchise fee can be expensive.​
✖ Franchisees must follow strict rules on pricing and store layout.​
✖ They cannot choose their own suppliers.​
✖ Local promotions are often paid for by the franchisee.

Joint Ventures
A joint venture (JV) is when two or more businesses collaborate on a specific project. It
is not a merger but can lead to one if the venture is successful.

Example: A car manufacturer and a tech company working together to develop self-driving
technology.

Advantages of Joint Ventures:

✔ Shared costs and risks, which is useful for expensive projects.​

✔ Businesses bring different skills and expertise.​
✔ Companies with markets in different countries can expand globally more effectively.

Disadvantages of Joint Ventures:

✖ Different management styles may lead to conflicts.​

✖ Mistakes or failures may cause one company to blame the other.​
✖ If one business fails, the entire joint venture is at risk.

Social Enterprises
A social enterprise is a business that makes profits while helping society. Unlike
charities, they operate as normal businesses but reinvest a large part of their profits into
social causes.

Examples:

●​ TOMS Shoes (donates shoes to children in need).

●​ Divine Chocolate (supports fair-trade cocoa farmers).

Features of Social Enterprises:

✔ They sell goods or services like a regular business.​

✔ They have ethical and social goals.​
✔ They must be profitable to continue operating (cannot rely solely on donations).

Social enterprises compete in the market like any other business but focus on
benefiting society while making a profit.

Changing the Form of Business Ownership

While most businesses maintain their original structure, some choose to change their
form of ownership to take advantage of different benefits.

Advantages of Changing Business Ownership

✔ Access to more finance – Larger businesses can attract investors or bank loans.​
✔ Legal identity – The business becomes a separate entity from the owner, reducing
personal liability.​
✔ Limited liability – Owners' personal assets are protected in case of business failure.

Disadvantages of Changing Business Ownership

✖ Legal costs and formalities – Transitioning to a new structure involves paperwork

and expenses.​
✖ Loss of control – Original owners may have to share decision-making with other
shareholders or directors.​
✖ Profit-sharing – More owners or investors mean profits must be divided.

Example:

●​ A sole trader converting to a private limited company (Ltd) may do so to

access more capital and protect personal assets, but they will have to comply
with stricter regulations and may need to share profits with new
shareholders.
Measuring Business Size

Understanding business size is important for governments, investors, customers,

and employees. However, measuring business size can be challenging due to different
measurement methods and the lack of an internationally agreed definition of small,
medium, and large businesses.

Methods of Measuring Business Size

1.​ Number of Employees​

○​ Simple and easy to understand.

○​ Issue: Some businesses (e.g., automated factories) generate high revenue
with few employees.
2.​ Revenue (Sales Turnover)​

○​ Useful for comparing businesses within the same industry.

○​ Issue: Not effective across different industries (e.g., luxury jewelry vs.
cleaning services).
3.​ Capital Employed​

○​ Measures the total investment in the business.

○​ Issue: Some businesses (e.g., opticians) require expensive equipment,
making them appear larger than they are.
4.​ Market Capitalisation (for public companies only)​

○​ Formula: Current Share Price × Total Shares Issued

○​ Issue: Share prices fluctuate daily, making this an unstable measurement.
5.​ Market Share​

○​ Formula: (Company Sales ÷ Total Market Sales) × 100

○​ Indicates a company's industry dominance.
○​ Issue: A company can have a large market share in a small industry,
making it appear larger than it is.
6.​ Industry-Specific Measures​

○​ Hotels: Number of guest rooms.

○​ Retailers: Number of stores or total floor space.
○​ Manufacturers: Number of units produced/sold.

Significance of Small Businesses

Small businesses play a crucial role in the economy and industries they operate in.
Benefits of Small Businesses

✔ Employment Creation – Small businesses collectively employ a large workforce.​

✔ Innovation & Consumer Choice – Small businesses introduce new products and
services.​
✔ Competition for Larger Firms – Helps prevent monopolies and keeps prices fair.​
✔ Supply Chain Role – Many large firms rely on small businesses for specialized
components.​
✔ Potential for Growth – Many big companies (e.g., The Body Shop, Hewlett-Packard)
started as small firms.​
✔ Lower Costs – Small businesses often have lower wage and management costs,
allowing competitive pricing.

EU Business Size Classification

This classification helps governments, investors, and policymakers support and

regulate businesses based on their size.

Small Businesses

Advantages

●​ Owner(s) have full control, reducing the risk of losing authority.

●​ Quick to adapt to customer needs, especially with direct interactions.
●​ Personal service helps build customer loyalty.
●​ Close-knit work environment; employees often prefer smaller teams.
●​ Informal culture in family-run businesses, leading to motivation and multi-role
efficiency.
●​ Lower startup and operational costs.

Disadvantages

●​ Limited access to funding.

●​ Heavy responsibility on the owner, with fewer specialized managers.
●​ Business may struggle if key individuals are absent.
●​ High risk if not diversified—external changes can be damaging.
●​ Lack of economies of scale, leading to higher costs.

Family Businesses

Strengths

●​ Commitment: Family members work hard to grow and sustain the business.
●​ Reliability & Pride: The family name encourages quality and good stakeholder
relationships.
 ●​ Knowledge Transfer: Skills and experience are passed down through
generations.

Weaknesses

●​ Succession Issues: Many fail by the third generation due to lack of skills or
management conflicts.
●​ Informality: Lack of structured procedures can lead to inefficiencies.
●​ Resistance to Change: A preference for tradition may limit innovation.
●​ Family Conflicts: Personal issues can affect business decisions.

Importance of Small Businesses in the Economy

●​ Drive economic growth, especially in regions without large companies.

●​ Represent up to 90% of all employers worldwide, creating significant job
opportunities.
●​ Responsible for 80% of new jobs in developing countries.
●​ Encourage innovation and competition in the market.

Role of Small Businesses in Certain Industries

●​ Dominate sectors like hairdressing, home decoration, and gardening (95% of

output).
●​ Limited in industries like nuclear power but contribute through specialized
services.
●​ Support larger businesses by providing recruitment, transport, repairs, and
technical expertise.