Business Sizes

Jamie Z 2024-02-05

Learning Goals

• Explain the criteria used to classify business sizes
• Understand the cognitive word “describe”
• Understand the importance of small businesses

Criteria for business size

The ABS uses the following criteria to determine a business’ size

• Small business < 20 employees
• Medium business 20-200 employees
• Large businesses >200 employees

Other criteria

In many industries, it is correct to classify a business according to its dominant characteristics

• Annual Shares
• Market Share
• Capital intense (amount of investment or capital a business has)
• Organisation and control - Operated by two partners or few employees but record keeping and sales are controlled by an international parent company

Small Businesses in Australia

• 97% of business enterprises in Australia are classified as small
• There are four generally accepted characteristics which it displays

1. A small number of employees
2. Independently managed
3. Small share of the market
4. Financed by the owner

Using a paragraph, Describe the characteristics of a small business

Small businesses are enterprises that are classified by 4 generally accepted characteristics. According to the ABS, a key characteristic of small businesses is that they employ less than 20 employees and up to 100 in manufacturing industries. Another characteristic that can be used is to identify if the business is independently owned and managed. A small business is usually run and financed by a single person. Lastly, a small business only owns a small share of the market.