2.1 Classification by Size
- Businesses come in four different sizes: micro, small, medium and large.
- Currently SMEs in Australia perform better than other sectors of the economy.
- A micro business employs fewer than ﬁve people (including the owner).
- They represent 82 per cent of all non-manufacturing small businesses
- 58 per cent are sold traders and partnerships
- they employ 31 per cent of all people in the private sector
- they are dominated by women, young people self-employed and people retrenched 紧缩开支from previous employment - 54 per cent have no employees.
2.3 Classification by geographical spread
Geographical spread is the presence of a business and the range of its products across a suburb, city, state or country or the globe.
- A local business has a very restricted geographical spread; it services the surrounding area.
- Used by consumers who live nearby.
- tend to be small to medium in size.
Qualitative measures for local businesses
Qualitative measures are based on personal observation about the business:
- owner makes most management decisions
- owner provides most of the capital (ﬁnance)
- business has little control within the market
- independently owned and operated
- the business is locally based.
- A national business is one that operates within just one country.
- As it expands a national business will eventually run out of new customers to sell to.
- If it continues to expand it can decide to export and sell products overseas.
- GOOGLE National Australian Businesses.
A global business or Transnational Corporation (TNC), is a large business with a home base in one country that operates partially owned or wholly owned businesses in other countries.
Reason why businesses expand
- Increase in sales – the business opens new stores in new location.
- Desire to increase proﬁts – sales grow if the businesses sells to a large market.
- Increase in market share – as the business grows more people will buy from it rather than its competitors.
- Global consumers – the media and internet encourage people around the world to purchase the same products.
- Businesses can be classified as small, medium or large.
- Their classification will depend on such things as number of employees, market share, ownership and who makes the decisions.
- A micro business (usually a SOHO) employs fewer than five people (including the owner).
- Businesses can also be classified as local, national or global according to their geographical spread.
- A local business has a very restricted geographical spread; it serves its surrounding area.
- A national business operates in just one country.
- A global business — a transnational corporation (TNC) — is a large business with a home base in one country that operates partially owned or wholly owned businesses in other countries.
- The four main reasons businesses expand to serve national and global markets are increase in sales, desire to increase profits, increase in market share, global consumers.
2.4 Classification by Industry Sector
- An industry consists of businesses that are involved in similar type of production.
- Primary industry includes all businesses in which production is directly associated with natural resources.
- Examples: farming农事, mining, ﬁshing, grazing放牧 and forestry林业.
- 60 per cent of all our exports come from these industries.
- Secondary industry involves taking a raw material and making it into a ﬁshed or semi-ﬁnished product.
- Example – iron ore (mining) is turned to steel (semi-finished product) and used in manufacturing of cars (finished product)
- Tertiary industry involves performing a service for other people.
- Examples - retailers, dentists, solicitors, banks, museums and health workers.
- This sector has grown rapidly and is divided into two other sectors: 1. Quaternary industry includes services that