Business Size & Characteristics (Edexcel IGCSE Business): Revision Note

Small businesses employ fewer than 50 people

• Micro enterprises employ fewer than 10 employees

• Small enterprises employ between 10 and 49 employees

Small businesses usually provide goods and services at a local or regional level 

They are the most common form of business in most countries

• In 2022 5.5 million small businesses existed in the UK, more than 99% of all businesses operating at that time

• Italy has the highest number of small businesses in the EU

• Germany's businesses tend to be larger, on average, than those in other EU countries

Small businesses share a range of characteristics

Measuring business size according to the number of employees is becoming increasingly unreliable

• Businesses do not always employ full-time, permanent employees

• The use of fixed-term contracts, subcontractors and casual staff means that a business could have high levels of output with few employees

• Increased use of technology such as chatbots means that many services can provided with little human input

Large businesses are commonly classified as those that employ 250 or more workers and may be very well-known

In many countries, a small number of large business generate the largest proportion of revenue

• Germany has the highest number of large businesses in the EU

• Greece and Ireland have few large businesses, with their economies dominated by SMEs
  

Large businesses usually find it easier to raise external finance than small businesses

• They are seen as less risky than unincorporated businesses

• They have significant assets to allow them to pay back money they have borrowed
   

Some private limited companies can grow into very large businesses without ever having to sell shares to the public in order to raise finance

• The benefit of this is that the owners maintain full control of the company

• E.g. Hermès is one of the wealthiest family-owned businesses in the world
  
  

Public limited companies may have many thousands of shareholders

• Shares are sold on the stock exchange and can change hands frequently

• Large amounts of capital are raised during flotation

• E.g. German footwear company Birkenstock's IPO raised $1.5 billion in October 2023