Business & Financial Markets
Fundamentals of Business
Micro, small and medium-sized enterprises are socially and economically important, since they represent 99 % of all enterprises in the EU and provide around 65 million jobs and contribute to entrepreneurship and innovation. These businesses are normally privately owned corporations, partnerships, or sole proprietorships.
In the United Kingdom
There are about 4.3 million enterprises in the UK. Small enterprises and self-employed sole traders
represent well over half of private sector jobs and make up 56% of UK turnover. In contrast there
are only 7000 firms employing more than 250 people.
For each region and country in the UK, no more than 0.2 per cent of enterprises are large (250 or
more employees), and at least 99.0 per cent of enterprises are small (0 to 49 employees). The
proportions of enterprises that are medium-sized (50 to 249 employees) range from 0.5 per cent
(in the East of England, South East and South West) to 0.8 per cent (in the North East and
Northern Ireland).
In the UK as a whole, SMEs account for over half of employment (58.7 per cent). This is also true
for each region and country in the UK except London, where SMEs only account for 47 per cent.
For the South West, Wales and Northern Ireland, this figure exceeds 70 per cent.
At the start of 2005, the number of enterprises with no employees was 3.2 million, equivalent to
72.8 per cent of all enterprises. However this proportion varies among different industries, from
87.5 per cent for SIC M (Education), to 25.3 per cent for SIC H (Hotels and Restaurants).
Enterprises with no employees are sole proprietorships and partnerships comprising only the selfemployed
owner-manager(s), and companies comprising only an employee director.
They had an estimated combined turnover of £190 billion.
| Globalisation | Impact on Micro and Small enterprises
Globalisation has led to the birth of 1. Conglomerates Large corporation run as a single business, but made up of several firms (acquired through mergers or acquisitions) supplying diverse goods and/or services. 2. Multi National Corporations (MNCs) Enterprise operating in several countries but managed from one (home) country. These large firms have economies of scale and they do stifle competition though consumers benefit from low prices. |
| Technology | Rapid changes in Technology have shorten product lifecycles and completely change organisation structures. Whether be a product or service based business, there are many types of technology used. Epos, Cash points, Self service checkouts e.t.c |
| Information Intensity | There is too much information to sift through and make decision, they require individuals of certain calibre to analyse them and make decisions. Do a quick Google search, the outcome will be millions of pages, how do you decide which information to use? The ones that come within the first 20 index pages are not necessarily the best. |
| Knowledge | Look at the two examples of job advertisements below
Procurement Director Company: Atlantic Inertial Systems
c. £50,000 + benefi ts + relocation package
To be successful in the role, you will be able to demonstrate a proven track record
of strong team leadership, of building strategic supplier relationships
You will be degree educated and ideally CIPS qualified with an ability to influence,
communicate and build relationships at all levels within the organisation.
Catering Assistant, Catering Company: John Lewis
Salary £5.73 - £6.95 per hour
Job Requirements: Whilst previous catering experience and a food hygiene
certificate would be welcomed, we will provide full training.
What you will need is a real passion for food, the desire to
achieve the best and the willingness to work as part of a team.
Everyone at John Lewis is a Partner. Conclusion the more educated, the higher the functional literacy, the more you get paid on average a graduate earns more money than a non graduate. therefore even for organisations today, knowledge is what adds the most competitive advantage. Knowledge creates more wealth than capital, that is why Google's market value is bigger than Coca-Cola, according to Forbes. |
Bottom-line
Entrepreneur of today and the future has got to be knowledgeable about the whole of the mechanisms of
economy. In United Kingdom, gone are times when Sir Alan Sugar (Amstrad), Sir Tom Farmer (Kwik-Fit),
Sir Richard Branson (Virgin) started their businesses.
The following chapters explore concisely the fundamentals of business that any aspiring entrepreneur must
understand.
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