Does a smaller business mean smaller profits?

[Akinwale701]

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 the strictest sense, the scope of the business determination everything about it, the number of staff, the remuneration of the staff, the extent of the market reach, the amount of profits made, among others. so the smaller a business is, the smaller all these factors are. and profits are not left out as well.

 

[Blue house]

Well, small business doesn't really means small profit, first of all it depends on the kind of business, because their are some business that has a high level of profit irrespective of the capital or size or growth.
And lastly it still depends on the kind of people handling the business.

 

[Samuel77]

According to my own point of view, I believe it is based on your income, some time smaller business brings higher profit and some time smaller business bring smaller profit. It is not about the business, it all about your stock

 

[Richard92]

No smaller business doesn't mean smaller profit, some business are small but they make huge profit from it, it all depends on what you are selling or the kind of business you are managing, the product matters.

 

[iamgroot]

There is a small business but high in demand. It is not right to say that a small business has a small profit. If you look at its outer literally, maybe small and limited space, there is a chance that it is the business owner's conceivable way to save for the meantime, so that he can focus his capital on supplies to be sold to clients .

 

[Shigobad20201]

Smaller business means smaller profit but it depends on the business, some small business makes more profit than big business, theres a particular business i know of, its fish farming, if you have just one pond and you harvest the fish , you will gain more than some big business.

 

[Godleads1]

The smaller business does not mean smaller profit. If a business is doing well, it is possible for it to yield more in return. A business with the right entrepreneur and the right goods and services can bring in more than expected.

 

[sam386150]

Small business does not mean small profit, anything that have to do with business is depending on how you manage it, because management is the major concern when it comes to business not the size of the business.

 

[Atif3786]

Profit describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. Any profits earned funnel back to business owners, who choose to either pocket the cash or reinvest it back into the business.

 

[mayreeh38]

While it may be true that smaller businesses attracts smaller income or profit, it will be wise to also say that these small businesses if consistent brings satisfactory profits. Food vendors makes daily sales while car dealers don't.

 

[Michaellee]

Having a small business does not mean you will will have small profit. Its just his you market your small business that will determine if the profit at the end of the day. Packaging also matters a lot when doing business. Someone with a larger business might have a low quality package and might end up have low profit

 

[Josephjossy]

No, sometimes small business can make you big profit, what matters is the type of business and the strategy on how you run the business. Just understand the business very well, and run it with a good selling strategy

 

[Kinglegend01]

To some extent yes,a small scaled business would only attract small profits, at least that is what I have majorly observed but i think 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.

 

[Youngdee]

Running a small business doesn’t mean you are running a business with low profit. It simply means you are running a small capital business with low cost of risk and payment. There are small businesses that yield high profits and better than big high risk business that crashes after a while. For example running a Paga agent business is very good if done in a good and suitable environment.

 

[Tariq Nazir]

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.

 

[Johnbami]

Well I do not think this condii is always true. Like hw would you relate the two. The condition of the situation might not be favour because of the low capital put into the business that makes everything work. But no I do not agree

 

[Adeyoola7]

assumption among managers has been that small businesses should use essentially the same management principles as big businesses, only on a smaller scale. Underlying that assumption has been the notion that small companies are much like big companies, except that small businesses have lower sales, smaller assets, and fewer employees.

 

[Mariyam]

No i dont think so'Smaller profit isn't reason of the small business... We can also earn more from our small buisness its depends on type of the business... There are many small business that are making huge profit than big companies, your small business might end up giving you big money

It's absolutely wrong , smaller business doesn't mean smaller profit .. it depends on how much hardworking you are , your time consentration and skills can make it broad level business and you can earn really hight profit even from small business.

 

[Shahzaib37]

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?

It depends upon on your business what is your business.as seen mostly small investment give small business but some times it will give you a big bounce back

 

[Abu4exel]

Small business does not mean small profit all the time. Though there is a business saying that the more you invest the more your profit. But a time you might engage in small business and be earning big. Though, not in most time you invest in small business and make huge profit.