- Business and Employment
5 Major Fields of Business Activity-define
The Fields of Small Business
The five (5) major fields of Business activity are:
Extractive enterprises-grow products or take raw materials from where they are found in nature.Agriculture,forestry,mining and commercial fishing are some of the kinds of enterprise in the field.Some small business examples of extractive enterprise are :
- Vegetable farms in rural areas surrounding cities
- Growers of flowers used for special occasions and decorations
- Sand and Gravel Companies that provide products for highway and building construction
- Coal mining for home or industrial fuel
- Cutting and selling firewood to homeowners who have wood-burning stoves and fireplaces.
Manufacturing- take raw materials and change them into a form that consumers can use. A picture frame manufacturer takes wood and glass and makes a finished products.A baker changes flour,sugar,and spices into pies and cakes.Manufacturing,more than any field ,lends itself to big business.This is because it takes large sums of money and a lot of workers to start many of these enterprises,like making automobiles,for examples,you need millions of dollars worth of equipment and materials and hundred of trained workers.Some opportunities in manufacturing are:
- Printing shops
- soft-drink bottling plants
- machine shops
- meat-packaging plants
- ready-mixed concrete plants
- cabinet shops
- local crafts and artisan who make jewelry& furnitures
Wholesaling-wholesalers buy goods from extractive or manufacturing enterprises and sell them to other businesses.They usually buy in large quantities then sell in small quantities.For example,a maker of bags might sell 3000 pieces to one wholesaler.The wholesaler ,in turn,may sell 60 bags to each of of 50 bags store.Finally,the stores will sell the bags one at at time to 60 different customers.
Some wholesalers specialize in selling goods to institutions like hotels,hospitals and schools.Others sell goods that manufacturers use in making other products.Wholesalers are the usual source of supply for many items sold in retail stores.Example includes:
- fruits and vegetables.
- equipment and supplies for barber and beauty shops
- laboratory and office equipment for professionals like doctors and dentists
Retailing-retailers buy products from wholesalers,manufacturer and extractive enterprises and sell them to consumers.Most people think that retail business as being store where they can go to buy goods.
Forms of Retailing
- Over-the -counter Retailing-involves having a store where customer come to shop and buy what they want from the retailers stock.These includes clothing stores,shoe stores,building materials stores,auto parts dealer and appliance and TV stores.Other examples are restaurants,antique shops,records shops,and jewelry stores.
- Mail-order retailing-customer see the goods they want in catalogs or advertisements.Order are sent to the retailer's place of business by mail or telephone.The retailers receives the order then ship the goods to the customers.Examples are,hobbies supplies,gourmet foods and spices,needlework and sewing supplies and camping equipment.
- Direct Retailing-the salesperson comes to the home of the consumers with products and samples.Two types of direct retailing are:door to door selling,the entrepreneur calls on each home in a neighborhood to sell products.Cosmetics and household cleaning products are sold this way.Party plan on the other hand,when it used,one customer hosts a party for several friends then a sales person comes to the party to display and demonstrate products.
- Vending Machine Retailing-the customer deposits money in a machine and receives the goods immediately like soft drinks,candy,cigarettes, hot and cold foods and beverages.
Services- of all the field of business,services are generally the easiest to enter.They can usually started with very little money.Money can be operated from the home or from small office or shop.Categories are:
- Personal Services-perform work directly for a person,like beauty and barber shops,laundry and dry cleaning establishments,photography studios,travel agencies and funeral homes.
- Business services-task performed by one business firm for another.Examples are: advertising agencies,janitor and building maintenance services,store and building security firms,sign shops and delivery services.
- Repair Services-perform work on goods owned by the customer,like repair automobiles,bicycle,motorcycles,home appliances and lawn mowers.Also includes upholstery,and furniture repair shops,plumbers and electricians.
- Entertainment and Recreations Services-serve people in search of fun and fitness.Examples are Bowling alleys,swimming pools,motion picture theater,skating rinks and miniature golf courses.
- Hotel and lodging services-Lodging for a persons on business or pleasure trips is provided.Examples are,hotels,motels,trailer parks,guest ranches and other recreational camps
How can business grow?
We always wanted that our business would prosper and make it to the top.Here are the factors how your business grow:
- Internal growth occurs when a business expands its existing operations
- External growth (integration) is when a business takes over or merges with another business.
- A merger is when the owners of two businesses agree to join their firms to make one business.
- A takeover (acquisition) is when one business buys out another business which then becomes part of the “predator” business.
- Horizontal integration is when one firm merges with or takes over another one in the same industry at the same stage of production.
- Vertical integration is when one firm merges with or takes over another one in the same industry but at a different stage of production. Vertical integration can be forward or backward.
- Conglomerate integration (diversification) is when one firm merges or takes over a firm in a completely different industry.
Among the field of business activity,what do you think the best?
Books of Entrepreneur
Things to Consider to Avoid Failure in Business
In order to be successful,we must know what are the causes of business failure :
- Failure to understand your market, your customers, and your customers’ buying habits. Two easy questions: Who are your customers? And why do they spend their money with you? You should be able to clearly answer in one or two sentences. Customers are the only people that put money in your account. Without them, you will not survive.
- Choosing a business that isn’t very profitable. Even though you generate lots of activity, the profits never materialize to the extent necessary to sustain an on-going company. We all learned the dot-com (obvious) lesson that to survive, you must have positive cash flow. It takes more than a good idea and passion to stay in business.
- Failure to understand and communicate what you are selling. You must clearly define your value proposition. What do you do that can help or benefit me? Once you understand it, ask yourself if you are communicating it effectively. Does your market connect with what you are saying?
- Inadequate financing. Cash is king. If you don’t have enough cash to carry you through the sales cycles and downward trends, your prospects for success are not good. When businesses go looking for lenders to provide that cash, they quickly find that funding sources are finicky and difficult to please.
- Failure to anticipate or react to competition, technology, or other changes in the marketplace. It is dangerous to assume that what you have done in the past will always work. Challenge the factors that led to your success. Do you still do things the same way despite new market demands and changing times? What is your competition doing differently? What new technology is available? Those who fail to do this end up obsolete.
- Overdependence on a single customer. Pay attention to your revenue sources. If you have a customer that is providing a majority of your income, ask yourself what would happen if they left or went out of business. Where would you be? Whenever you have one customer so big that losing them would mean closing up shop, watch out. Having a large base of small customers is a safer beat.
- Failure to define your product/service offering. Trying to do everything for everyone is a sure road to failure. Spreading yourself too thin diminishes quality. The market pays excellent rewards for excellent results. Excellent results come from doing what you do and doing it well over and over again.
- Keeping your house in order. Slow and steady wins every time. It’s hard to believe that too much business can destroy you, but the textbooks are full of case studies. To serve your customers well you have to focus on quality, delivery, follow-thru, and follow-up. How do you feel when your suppliers say they are “slammed” all the time? Like you are inconveniencing them? Don’t treat your customers in the same manner. Going after all the business you can get drains your cash and actually reduces overall profitability. When you go after it all, you usually become less selective about customers and products, both of which drain profits from your company.
- Poor management. Management of a business encompasses a number of activities: planning, organizing, controlling, directing and communicating. The cardinal rule of small business management is to know exactly where you stand at all times. A common problem faced by successful companies is growing beyond management resources or skills.
- No planning. If you don’t know where you are going, you will never get there. No clear picture of success will lead to status quo or worse. To grow and be successful you have to actively work on your business. As the saying goes, failing to plan is planning to fail.