Big business operations – the pros and cons

It’s the common position that it is always beneficial to expand your business. Bigger is better because it means more money. While there is obviously some truth to this over generalization  the nuances between big and small business cover a spectrum of many grey areas, each with their own associated pros and cons that are directly affected by the scale of the business operation. Some of these advantages and limitations to the ‘big’ side of the spectrum are explored below courtesy of one of the writers working for – the guys sponsoring this post. I hope you gain some valuable insight over the next few paragraphs;

Big Business Pros – Bulk ordering and undercutting competitors.

The larger your business operation is the more competitive it can become whilst still turning a profit. This is initially done with bulk ordering of the good you use, be it your office technology or the raw ingredients for your trademark muffins you sell. The larger these orders become the better the buying price you will get whilst you maintain the same selling price for your good and services. This results in increased profit! The second way big business becomes highly competitive is simply because they posses the capacity to undercut the price smaller businesses offer for the same business or product. How does this work? Well, the larger the business is the more opportunities it can take on board at once due to a larger staff. By having multiple business relationships in the air at the same time you can guarantee a constant stream of revenue into your business. And as long as you are making even a little profit from each relationship you can survive due to the sheer volume of these types of relationship you have in motion.

Big Business Cons – Difficult to connect to the world on a human scale and ‘corporate responsibility’.

This means your business runs the risk of inheriting the reputation of ‘the faceless and soulless corporation’. Of course a good advertising campaign and well trained enthusiastic support staff can help to reduce this to a degree the simple fact is that some customers will always prefer to give their business to someone they know and recognize  these personal client – customer relationships become proportionately more difficult to achieve relative to the amount of staff you have trying to cater to overall demand. At a certain point your loyal customers are going to become a statistic instead of a name and face, this is where the small business owner picks up an advantage over you!

The term ‘corporate responsibility’ is something you will have to get to grips with as your business expands in size. When you reach a certain size (and have the big profits to match) more is expected of you from both a social and environmental perspective by the public and your staff. These responsibilities often manifest themselves as pressure to adopt a green policy in your business operation and to actively divert some of your revenue into making a positive environmental shift in the environment. While this is ultimately a good thing for both the environment and your business (philanthropic endeavours will significantly improve the public’s opinion of your business) It is still money out of your pocket and a responsibility that wouldn’t exist if your business model was operating on a more modest scale.

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