Business Economics

Business economics



Business economics

Introduction

Normally there are two types of businesses one operating at a large scale is known as the large companies, second, who are operating at small scale known as the small companies. This topic has covered the general aspect of how these two businesses differ from each other. Now talking about the large companies first, following are some advantages and disadvantages of large companies.The Advantages and Disadvantages of Large Companies

Large Companies have a number of advantages: a.) Limited liability for its shareholders;

b.) As a separate entity the company can continue, allowing the business to be passed on to future generations;

c.) The control of the company's assets can be separated from the distribution of income; 

d.) different dividends can be paid on different types/classes of shares; e.) Companies may have different rebate/offset entitlements from individuals; f.) companies can claim a deduction for salaries paid to all employees including owners and superannuation contributions paid on behalf of all employees including owners; and 

g.) Companies have flexible fundraising options (e.g. easier borrow facilities, ability to sell more shares).

While companies have a number of advantages they also have a number of disadvantages that need to be considered, namely: Disadvantagesa.) Strong legal obligations required to be met in order to establish a company; b.) Ongoing legal obligations;c.) Ongoing accounting and record-keeping obligations;d.) Obligations on the directors of companies with severe penalties for breach;e.) Relatively complex taxation and recording requirements;f.) No tax-free threshold;

g.) Subject to rules restricting its ability to carry forward losses and bad debts (such as the continuity of ownership test or same business test) Small Business

Once the decision is taken, the manager or owner organizes its resources to achieve goals. There are numerous types of small businesses that can be initialized. Art production of paintings, sculptures, etchings and drawings. In this case, the manager employs and encourages other artists to produce beautiful objects in larger quantities through the efforts of the group. The manager chooses the capital tools and equipment needed. With tourist attractions, these objects are markets for both local and international. Good managers will make contact and place their items at strategic points of sales. To manage a small business, you have to take risks, be able to think clearly and wisely organized. It should also be prepared to devote himself to his work, be disciplined and courageous in difficult decisions (Steve 1980, 45).

Advantages of small Business

If you are a small business owner, you will have expertise on everything from management of products to, marketing, strategic planning and finance. But in today's economy to be an expert in all much more difficult, especially in matters of financing, which may either increase or destroy your company. When you learn to manage business finances, you'll get everything you need to find ways to maintain growth, guide the direction of the company, and avoid obstacles.Financial planning involves the following tools:Adequate Financial Information

More than half of small businesses have reliable financial information. One should have Work with an accountant so to develop a system for generating and recording the basic financial information such as cash flow and projects of sales, stock turnover, receivables, and the Fund payable. This will assist to develop a solid financial project, and help in determining funding requirements (Timothy 2006, 345).

Budget cash flow

Cash flow is determined by the funds pumped through your business, Cash banked in bank accounts and cash paid to different ...