Page 125 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes
Raghav also invested in advertising and distributed pamphlets to all the 70,000 households
of Mahanagar featuring the range of products, the discounts and the services introduced at
Piyush General Store. Yet, even now, eight months after the renovation, the sales have not
shown much improvement. Diwali, a big Hindu festival is two months away. This is
considered as the hottest season for any retail outlet in India. Piyush General Store has
shown good clientele in the past when sales were so high that the quarter of the profits of
the whole year used to come from this festival season. But this time Raghav is jeopardized
about the fate of Piyush General Store because the bigger boys (read Big Bazar, Vishal
Mart etc.) have announced mega discounts and shopping carnivals for the Diwali festival.
Raghav is naturally anxious, thinking about how to keep his customers loyal to him and
how to generate an increase in sales.
Questions

1. What is the problem in the case?
2. What suggestion do you give Raghav to fight the challenges thrown up by the big
market players?

Source: Lall Madhurima and Sahai Shikha (2008), Entrepreneurship, Excel Books Pvt. Ltd.

8.3 Summary

Location of enterprise is concerned with the least cost location, so that again transport
costs are a crucial element in the location decision.
A small enterprise or a factory or plant is an individual building or premises that produces
manufactured goods.

The concepts of site and situation play separate roles, although we may use the word site
in relation to location when we are really looking at the situation of the enterprise. The
site of a enterprise, or group of enterprises, is the actual physical location, or block of land.

As transport costs are not identical for raw material and manufactured goods a relative
weighting must be calculated.

The significance of the material index is in calculating precisely the difference between the
unit transport costs of raw materials and finished products. The number of the index is
used to calculate a relative weighting, which is then applied to the spacing/radius of the
isotims.

A sole proprietorship is both the simplest and the most prevalent form of business
organization. An important reason for this is that it is the least regulated of all types of
business structures.

A partnership is a relationship existing between two or more persons who join together to
carry on a trade or business. Each partner contributes money, property, labor, and/or skill
to the partnership and, in return, expects to share in the profits or losses of the business.
The profits generated by a partnership may be distributed directly to the partners without
incurring any double tax liability, as is the case with the distribution of corporate profits
in the form of dividends to the shareholders.
Of all forms of business organization, the partnership has spawned more disagreements
than any other. This is generally traceable to the lack of a decisive initial partnership
agreement that clearly outlines the rights and duties of the partners.

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