Page 35 - Cambridge IGCSE Business Studies
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3: Enterprise, business growth and size
EXAMPLE
Think about the two businesses below.
Figure 3.3a A window cleaner Figure 3.3b A helicopter rental business
Both of these businesses are small and have just one owner, but the helicopter rental business requires a much greater
capital investment than that needed by a window cleaner.
Value of output
The amount businesses earn from selling their products is often used to compare
the size of businesses in the same industry. A small business will have much lower
revenue – earnings from sales – than a larger business. For example, a small general 33
store will have fewer customers than a large supermarket and, therefore, much
lower sales and revenue. The larger the market a business serves, the more revenue
the business is likely to earn. However, it is not a good measure when comparing
businesses in diff erent industries.
EXAMPLE
Think about the two businesses below.
Figure 3.4a A designer dress shop Figure 3.4b A sweet shop
The designer dress shop sells a high value product compared to the low value products sold by the sweet shop. The revenue
of the designer dress shop is likely to be much greater than that of the sweet shop.
