Management of small enterprise

This document provides information on the key attributes of business location, conditions for buying/leasing a building, legal issues in home-based business, B2B, B2C, C2C models, features of e-commerce models, trade-off between equity and debt financing, types of loans by commercial banks, and government help for small businesses.

Running Head: Management of small enterprise
Management of small enterprise
Question and answers

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Key attributes of business location and important attribute of retail location
The main key attributes for a good business location are accessibility of customers, easily
available resources, availability of qualified workforce, tax rates, quality of infrastructure and
traffic pattern. Among all these attributes, accessibility of customers is considered the most
important because for retail business having strong customer base ensure the high sale or
purchase which is directly connect to the profit making (Millar, Mayer & Baloglu, 2012).
Growth of any retail business is very dependent on their financial performance.
Conditions that decides buying/leasing building for business
Conditions that decide buying of building over lease are long term saving, location, tax saving
and control. It has been found that buying of building is better than lease in long-term purpose
because in lease property owner always consider his profit interest. In some business location
plays very important role and is location is favorable it is always wise to go for buying building.
Buying of building will help in saving tax, which is not possible in lease of building. More ever
buying building will offer control over renovations as well as setting business hours.
Legal issues consider in home–based business
There are various legal issues connected to home-based business. One is business structure, it
becomes very difficult to understand which business structure best suits to tax structure of the
business such as a sole-proprietorship, limited partnership or partnership. Another legal issue is
business licenses; in which person has to go for apply for variety of permits (Wolters Kluwer,
2019). Another legal issue is non-disclosure agreement, in which financing process for business
have to go through various confidentiality and non-disclosure agreements. Another legal issue is
zoning, in which one has to be sure related to the selecting location for the business.
B2B, B2C, C2C and their major thrust
B2B- This type of model is suited for those companies that sell their product direct to another
company that sell this product to customer. Major thrust behind is large B2B market.
B2C - This type of model is suited for those companies that sell their product or service direct to
customer through online platform. Major thrust behind is attachment towards online shopping.
C2C- This type of model is suited for those companies that act as mediator between the potential
customers and offer them ample chances to sell or buy products directly. Major thrust behind is
trust building in customers (Drudesk, 2019).
Primary features of the information-based, content-based, and transaction-based models of
e-commerce and best offering
Information base model offers flow of information along in terms of products, business detail
and other business related matters, which can affect the business operation. While transaction-
based model is associated with cost to customer and helps in monitoring the performance on the
base of delivery platform including multi clients (IGT, 2019). While content based model in
which accessing of information is there but no scope of buying or purchase. Among all While

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transaction-based model is important because it offers the exact customer purchase behavior
pattern.
Trade-off between equity and debt financing
Tax benefit, added discipline and efficiency are the three trade off used for selecting between
equity and debt financing.
Looking for capital in initial phase of business
For initial phase of business, it is always better to approach to entrepreneurs, banks and then
financial institutes for the capital because these entrepreneurs are more interested in vision
behind the idea instead of profit making. While financial institutes are always interested in profit
making before investment in any idea or business.
Different types of loans made by a commercial bank
Start-up loans
This type of loan offers business the required capital to start their business. This type of loan is
being secured with the help of business premises or plan related to business purchase or
unsecured loan on the base of assets.
Line of credit
A business is always in need of ready flow of money for their business operation, in this situation
commercial business offer them line of credit, and is secured with the help of business facilities.
This loan can pay back over time-to-time (Chron, 2019).
Small business administration loan
These kinds of loans are specially offered to small business that are interested in starting their
business and are guaranteed by SBA, which is considered as division of government. These loans
are offered from SBA under financial process and have some restricts and terms as compared to
other loans.
Federal government offer help to small business
Federal government offers help in three ways pattern. First is offering SBA loan program help in
which government offer capital to the entrepreneurs. The purpose is to offer lender a chance to
work with companies, which might face risk without their help. Second is new markets Tax
credits program in which investors are encouraged to invest in low-income areas. This kind of
help is mainly given to real estate business but still it can also benefit e commercial business
with their unique features (Pedigo, 2019). Third is community development financial institutions
in which many financial institute associated with the community offer their help to this low-
income business section to improve their business operation which is also known as venture
fund.

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Advice to entrepreneur who want to finance start up
Here, entrepreneur must focus on the vision behind the business idea along with benefits instead
of profit making. If vision is unique, it will automatically service the community as well as the
investor.

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References
Pedigo,S. (2019) 3 Ways the Government Can Fund Your Business [online]. Retrieved from:
https://www.inc.com/steven-pedigo/how-to-get-growth-capital.html
Millar, M., Mayer, K. J., & Baloglu, S. (2012). Importance of green hotel attributes to business
and leisure travelers. Journal of Hospitality Marketing & Management, 21(4), 395-413.
Wolters Kluwer. (2019) Deciding Whether to Lease or Buy a Business Facility [online].
Retrieved from: https://www.bizfilings.com/toolkit/research-topics/office-hr/how-to-decide-
whether-you-should-lease-or-buy-a-business-facility
Drudesk. (2019). B2B, B2C, C2C and C2B Business Models: What’s the Difference?
[online].Retrieved from: https://drudesk.com/blog/differences-between-b2c-b2b-c2c-c2b
IGT. (2019). Transaction-based Model: Aligning Output, Service [online].Retrieved from:
https://www.igtsolutions.com/blog/transaction-based-model-aligning-output-service-and-value-
in-leaner-test-environments/
Chron. (2019) What Types of Loans Are Made to Businesses by Commercial Banks [online].
Retrieved from: https://smallbusiness.chron.com/types-loans-made-businesses-commercial-
banks-388.html

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