factors that determines growth and type of firms and business

there are so many factors that affects the growth and type of firms and businesses. not withstanding underneath are some of the factors that limit the size and growth of firms and businesses across Africa

FACTORS THAT DETERMINE THE TYPE OF BUSINESS


Availability of capital.
The ownership of the business outfit whether private or public ownership.
The nature of the business the proposed business unit is to carry out.


The objective of the proposed business whether to maximize profit or to ret social services can affect the size and growth of the firms
The pay back period.
The return on investment.


FACTORS AFFECTING THE SIZE AND GROWTH OF A FIRM


The market: The size of the market a firm’s product influences its size, market is small in terms of effect demand, the operation of the firm is bound to be small.


Capital: When it is difficult to obtain the necessary capital for the formation of a large firm or expansion of existing one, the firm is bound to remain small, as a result capital reduces or limits the growth of indigenous firms in Africa


Entrepreneurial ability affects the growth of firms and businesses

: Ability to undertake risk and to manage large scale business is an important factor that determines the size of a firm.

The size of such firm depends on the knowledge and experience needed for planning the operation.


Technical nature of product or service can determine the growth of indigenous firms in Africa

Firms producing perishable agricultural goods tend to produce to satisfy only local markets. They therefore tend be small scale producers.

so technical nature and products to be produced will also limit the size and growth of firms
Stages of development: Some firms are because they have just been shed. Given time, they may grow expand.


Government policy affects the growth of firms : government policies are some of the most important factors to consider before starting a business or firm.

When government is ready to assist firms, it helps to determine the size of operation.


Available technology: Available technology is another key determinant of the size of a firm.

Related Posts