Does a smaller business mean smaller profits?

[mizzzlotam]

Smaller business doesn’t necessarily mean smaller profit. The amount of capital involve usually determine the amount of profit you expect. You can not stock up a petty trade shop for 100,000 thousand selling provisions and be expecting to make 1million.

 

[RETIRED SINNER]

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?

Small business can mean small profits because the measure u give is the measure u receive, the size of the investment u make will determine your profit rate, just like gambling when u stake low you earn low when u stake high you win high, so no small business can yield huge profits unless your saving even at that as a small business it will still take time

 

[Shaffy]

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 still think it will be better to start with the smaller business, despite the smaller profits you can get.

You get to gain experience and problem solving skills before you deal with big money and even bigger problems.

 

[Taimoor Jutt]

You are right he should purchase less and according to his sales. But here i mentioned tips to get bigger profit..It depends upon the type of business. if you are doing business of golden jewelry then it may give you bigger profit. But anyhow Start from base either from very low place and try to learn from your mistakes, do hardwork, keep patience, be humble stay positive will lead you to get success.
I'm answering just according thread.

 

[Abibatabosede]

The size of business does not determine the profit that would be made at all times. There are a lot of small businesses that yield more than big business depending on the package of the business owner.

 

[Adexgrace]

Am not agreeing with that. Am in a small business does not mean I will be getting small profit. It only implied that I will be getting limited profit. Because they are some small scale business that are even more profitable than the large scale business.

 

[kayode10]

It is possible to make a huge profit with your small businesses. In fact, to some extent small business can compete with the big ones provided the owner plays his card very well. I have a friend who has a business in copywriting service. There are 20 people under his payroll. His agency which can be classified as a small business is making hundreds of millions every year.

 

[Kamon c4]

The bigger the capital, the bigger the profits and the smaller the capital, the smaller the profits. Though this isn’t applicable to all small businesses. Sometimes Small businesses yields high profits

 

[Ebensco]

The size and and amount of quality products will also determine the profits to be generated because the more you capable to produce much product it's the most you gain a profit.

 

[joy101]

Yes, the size of business determine the profit you get in the business, starting a smaller business sometimes you might get higher profit depending on how the business is moving and also the location too can determine.

 

[Usman Sattar]

If you last dreamed of quitting your job at nine to five and becoming your own boss, you've probably considered a variety of small business ideas. But, when you have a lot of passion, it can be hard to find direction.

To help, I have developed small business ideas for everyone who wants to run their own business. Use them as a jumping point to ignite your unique ideas:

 

[Donkiz]

In both business and investment, the profit you make from it depends on the amount you invested, so if you invest small amount of money your profit will not be the same with someone that Investment bigger amount. So small business means small profit when compared to a bigger business.

 

[Hafsa]

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?

in my point of view, I don't think that smaller business has smaller profit margins, profit margins are based on your skill even your business is smaller or bigger with free of risk. yes I think that the idea of a smaller business is a better quality option to make a profit in the market

 

[btaliat]

In most cases, the right answer will be yes. You receive what you give out. When you start a small business, then there is tendency that your profit and income will be small too since you are investing less capital and less labour.

 

[Ifective]

Smaller business means you are living within your means not necessarily means smaller profit.
However, the smaller the business, the smaller the profit has to be. This doesn't mean your business will not match the level of your profit. You don't expect to sow 1000 and reap 1000000.

 

[Richmond funke abosede]

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.

 

[Deeone09]

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?

Nice write up, a great opinion in starting a small scale business.

 

[Dylinks]

Smaller profit isn't the determinant of the size of the business. Turn-over is the major determinant of the size of the business. There are many small business that are making huge profit than big company. Ability to manage your expenses and curbing wastages is key.

 

[Erik4150]

Small business does not have to mean small profits. There are small businesses that make good profits every month and their owners would disagree if you called their profits small. In my own understanding, if your small business is getting you 70_100‰ ROI then it is no small profits.

 

[Shahid Abbas]

I do not think it is necessary to build a big business to get big profit We can also earn more from our small buisness if we do work with full efforts in small business and work hard and work with fashion it is possible .