Introduction
There is a growing number of new firms operating in the economy. However their survival is important as there are many benefits which are derived by the society due to growth of SMEs. The government is also supporting news firms in different ways because they contributes more benefits to the growth of the economy.
Task
(i)Research the meaning of small firms
(ii)Write notes on the characteristic features of small businesses.
After the research, answer the case study below.
TAKE HOME TEST (due date 10/09/21)
Case study
Tashinga Napulu owns a fishing business in Mutare. The business is well established and consist of two street shops in the down town area of the town. The turnover per annum is 300 000usd until 2016. However, from year 2017 competition became intense as new firms entered the market. Tashinga has always been reluctant to grow her business since the turnover and a profit she was getting from the firm was enough to keep her small family comfortable. Tashinga also likes to spend time touring the mountains in the eastern highlands. Growing the business means less time for touring. In 2018 Tashinga’s son became interested in business and he was encouraged to develop an online service in addition to the fishing business. The business now generates a turnover of 400 000usd per annum which is enough to keep everyone happy. Tashinga and his son have no plans to grow the business. One day Tashinga was consulted by John Moyo who is an investment analyst and entrepreneur who runs butcheries business in the town. He suggested merging their businesses and forming a company. However the decision involves building a large warehouse with a cold room in the light industrial area of the city. This investment requires capital outlay of 150 000usd. John suggested that they can borrow mortgage loan to build the warehouse. Tashinga and her son brainstormed and they realized that, it is a great opportunity for their business as it will increase turnovers and profits for the business. Hence they are considering the effects of the merger on their workers as some of them may need to be transferred from their work stations to other areas and they may be a possibility that others need training to be able to handle new requirements of the job.
(Source: Business Journal compiled by Nellia Maroso)
QUESTIONS
1(a) Define a merger. (2)
(b)Despite profit maximization what are other objectives of businesses (8)
(c) Discuss challenges face by small firms. (10)
(e) Analyse the contributions of large businesses to the Economy (10)
(f) Discuss the benefits of introducing ICT in business (10)
(g) Evaluate the possible source of finance which can be used by a business to build a warehouse (10)
Process
(i)Research and Critical Analysis
(ii) Write the work in your books
(iii) Submit the books to the teacher during the lesson
Evaluation
MARKING GUIDE
ACHIEVEMENT STANDARDS: TOTAL MARKS 50
|
DIMENTION/CRITERIA |
EXCELLENT |
GOOD |
SATISFACTORY |
UNSATISFACTORY |
|
Definition of a Merger |
2 |
2 |
2 |
0 |
|
Explanation of other objectives of firms |
7-8 |
5-6 |
3-4 |
0-2 |
|
Discussion of challenges faced by small firms |
8-10 |
6-7 |
4-5 |
0-3 |
|
Analysis of benefits of large businesses |
8-10 |
6-7 |
4-5 |
0-3 |
|
Discussion of benefits of ICT to businesses. |
8-10 |
6-7 |
4-5 |
0-3 |
|
Evaluation of different sources of finance |
8-10 |
6-7 |
4-5 |
0-3 |
Conclusion
A thorough research should be done on small businesses and all questions should be answered in relating to small firms.
Teacher Page
My name is Nellia Maroso (Teacher-Business studies)- Students are allowed to ask any questions relating to business
Contact (+263 772 603 002)