Does a smaller business mean smaller profits?

[BrolySSJ]

When it comes to opening up a business, one of the thoughts that generally crosses our mind is whether to open up a big or a small business. Of course there are risks that are associated with each type of business, however does a smaller business mean that there is smaller profit margins as well?

The reason that I am asking this is that if you have a smaller business then you generally keep fewer of the items in stock as well and therefore this means that when you are purchasing it from your supplier that you will purchase less as well. We all know that when you purchase a lot of a product from a supplier that you generally get it at a cheaper rate and this is often referred to as a bulk rate discount.

However, if you are preparing for a small business you may not be purchasing enough stock that can allow you to qualify for this discount. Therefore, it is either you have to mark up the cost much higher or you have to have a smaller profit margin so that you can still be competitive in the market. Which do you think is the better option?

 

[Hassan14]

When it comes to opening up a business, one of the thoughts that generally crosses our mind is whether to open up a big or a small business. Of course there are risks that are associated with each type of business, however does a smaller business mean that there is smaller profit margins as well?

The reason that I am asking this is that if you have a smaller business then you generally keep fewer of the items in stock as well and therefore this means that when you are purchasing it from your supplier that you will purchase less as well. We all know that when you purchase a lot of a product from a supplier that you generally get it at a cheaper rate and this is often referred to as a bulk rate discount.

However, if you are preparing for a small business you may not be purchasing enough stock that can allow you to qualify for this discount. Therefore, it is either you have to mark up the cost much higher or you have to have a smaller profit margin so that you can still be competitive in the market. Which do you think is the better option?

Urdu
English









Absolutely you have written brilliantly. Whenever we start a small business, the first benefit we get from it is that we have to invest less in it. Whenever we have to start a small business and we know it. Coins and we can make more profit and later we can go to big business and we can make more profit. We should start with small business in the business world.

 

[Adventurer]

When it comes to opening up a business, one of the thoughts that generally crosses our mind is whether to open up a big or a small business. Of course there are risks that are associated with each type of business, however does a smaller business mean that there is smaller profit margins as well?

The reason that I am asking this is that if you have a smaller business then you generally keep fewer of the items in stock as well and therefore this means that when you are purchasing it from your supplier that you will purchase less as well. We all know that when you purchase a lot of a product from a supplier that you generally get it at a cheaper rate and this is often referred to as a bulk rate discount.

However, if you are preparing for a small business you may not be purchasing enough stock that can allow you to qualify for this discount. Therefore, it is either you have to mark up the cost much higher or you have to have a smaller profit margin so that you can still be competitive in the market. Which do you think is the better option?

This is an exact scenario of what happened to my organization, after the pandemic, we shut down the office and downsized, also worked from home.
Though we stock smaller quantities of our goods and we reduced the profit margin but our profit has been kind of the same because we have less overheads and less bills to pay.

 

[Ridorz]

I can say the size of business may determine the size of profits to generate because the more you capable to produce much product it's the most you gain a profit. But as for me I can not make a profit trick me, I will like to start from small business.

 

[Matty]

Yes it is, better management will make it a big business the you get big income

 

[Aniwhyte]

It depends on the type of business and the hands handling it, there are some large business that is being handled with careless hands yet still doesn't bring an amount of profit a smaller business would bring if managed by a very competent hand.

 

[Briangsam]

No. Smaller business doesn't necessarily mean smaller profit. It will be down to how important the business is to the target audience. If the business moves very quickly in sales, you can expect the profit to be bigger.

 

[Shayo]

Small business doesn't necessarily equate to small profits. The only issue is that the higher the funds invested into the business the higher the return on the funds.
Both small and big businesses have the same average market price so it doesn't matter if a business is small, the profit yield is still the same the only difference is the quantity.

 

[Modupe]

I don't think so, small business does not mean you'll earn small profits. A small business doesn't necessarily determine your profits. Your actions and strategies used to run the business does. Competition also determines your profits.

 

[LaylaG]

yes that is always true if you have a small business you will not be able to make the same amount of profit like someone who is operating a large business organisation that is why a lot of people are always trying to bring her business from small business to a great business.

 

[singlej007]

It depends the kind of small business and the sales frequency, what I mean by sake frequency is that if you have small or few product and it sells faster as imagine, your small business might end up giving you big money at the end of the month, because within a month, you will have ip yo 10 turn over making you big profit.

 

[Planet408]

A small business does not necessarily mean a small profit. There are small businesses that makes huge amounts of profits more than some big businesses. What matters in this context is the high level of customer patronage.
[automerge]1611767061[/automerge]
A small business does not necessarily mean a small profit. There are small businesses that makes huge amounts of profits more than some big businesses. What matters in this context is the high level of customer patronage.

 

[Odebunmi ajewamiri]

Small business to determine small profit do the profit might be steady but it surely going to be small because the deal you are going to make with a small scale of business is sure going to be deferent from that of large scale business.

 

[Eyiteepraise]

Well, for starters starting small is like a set time period for growth in the sense that one wouldn't rush but mature in whatever he or she into slowly and steadily though the income might be small but as time goes by with the experiences coming in one would be able to ascertain where he or she is lacking in and work on it then, resulting to a boost in income.

 

[Zamaney]

No matter that excessive price cutting quickly destroys profits. Also, the owner-manager's salary in a small business represents a much larger fraction of revenues than in a big company, often such a large fraction that little is left over to pay additional managers or to reward investors.

 

[Nimra Noor]

When it comes to opening up a business, one of the thoughts that generally crosses our mind is whether to open up a big or a small business. Of course there are risks that are associated with each type of business, however does a smaller business mean that there is smaller profit margins as well?

The reason that I am asking this is that if you have a smaller business then you generally keep fewer of the items in stock as well and therefore this means that when you are purchasing it from your supplier that you will purchase less as well. We all know that when you purchase a lot of a product from a supplier that you generally get it at a cheaper rate and this is often referred to as a bulk rate discount.

However, if you are preparing for a small business you may not be purchasing enough stock that can allow you to qualify for this discount. Therefore, it is either you have to mark up the cost much higher or you have to have a smaller profit margin so that you can still be competitive in the market. Which do you think is the better option?

I don't think so because in many situation I have seen that someone start earning with a small business then he become very good businessman after sometime because almost every boss also start their work as a employee on the same hand time and determination very effect one's business to grow

 

[Greatguy1]

It depends on the value the business is creating. A small business can bring big profits. Most big businesses started small and made huge profits before growing big. A founder gets an idea and runs with it. He sets up in the garage and with time the business is acceptable globally thereby making huge profits. That's the story of Bill Gates and Microsoft

 

[Sariana23]

It is true, small investment, small income, large investments also the returns on profits will be higher. But it is good to differentiate that when it comes to small businesses, it is not referring to the place. since a small business can rent a place as a warehouse and make large investments, where its profits will also be large.

 

[WhiteHouse]

There are numerous approaches to acquire benefit from an small business. Here are some tips

1. You need to produce more deals while simultaneously diminish costs.
2. Make a solid and positive online standing. Have a go at utilizing online media.
3. Use notice imparting to correlative organizations.
4. Augment your income - have a go at making a client base that is on a common installment plan. This balances out your income and guarantees you have a consistent sum coming in every month.

 

[mubinadaddy]

Smallishness of a business doesn't mean the profit will be small, it all depends on the type of business that you are doing, every successful big businesses in the world all started small and grow bigger later wrong with dedication, commitment, perseverance and consistency, expansion your business to the next level is sure.