首页
登录
职称英语
Starting up a business is easier in the service sector than in manufacturing
Starting up a business is easier in the service sector than in manufacturing
游客
2025-01-13
32
管理
问题
Starting up a business is easier in the service sector than in manufacturing. A new manufacturer has to invest heavily in factory premises, machinery and staff whereas a service sector start-up requires a much smaller initial investment. However, these new service sector firms often take a long time to build up a client base. They rely heavily on word of mouth to attract customers, a slow process that causes a few uncomfortable months while waiting for customers to arrive. With few customers, cash flow is minimal, but the start-up bank loan still has to be serviced, and there may be promotional costs like price cuts or free samples.
In contrast, new manufacturers have to find more start-up capital. They take the risk of a high initial investment only because they know there is a ready market for their product. On the other hand, the service sector start-up is more speculative, based on the hope that people will want the service offered, so payback may be seriously delayed. But service sector start-ups have one big advantage over manufacturing. A restaurant, for example, could be set up in a few weeks, enough time to find premises, buy equipment "off the shelf" and recruit staff. A manufacturer, on the other hand, needs about a year to find suitable premises, install machinery and make deals with suppliers of materials. This delays the time taken for cash inflows to start offsetting the start-up costs for the manufacture.
Cash flow is also influenced by the way demand may vary according to the time of year. Many manufacturers face a seasonal pattern of demand for their products, but the seasonality is more acute for many service sector firms. Manufacturers can produce stock before their seasonal peak, thus allowing them to spread the pressure on the production process. But for service providers who make most of their money during one peak period, seasonality increases the level of risk. If the peak season fails, e. g. ice cream sales crash because of a cold summer, the whole business could collapse before the next peak season.
Even more importantly, service providers have to respond instantly to changes in customer demand. Any variation, whether caused by seasonal factors or changes in fashion, hits service providers immediately. This implies an even greater need for a market-oriented approach by service providers. There is, however, a positive aspect for service firms: unlike manufacturers, they are less likely to be caught with huge stocks of unwanted products.
A firm’s financial success depends on adding value to its products, that is, selling its products at a price that is higher than the cost of making them. In setting a price, companies must ensure that their customers believe that the product or service is worth the price being charged. This is harder for service providers. Customers can calculate more or less the cost of providing a restaurant meal or painting a room. It’s much harder to judge the cost of manufacturing products like cars or refrigerators. Thus, service providers have to work much harder to add value to their services while avoiding any suspicion of overcharging. The implication of this is that manufacturers are likely to find it easier to trade with higher profit margins than service sector firms. [br] Why is a service business easier to start up than a manufacturing business?
选项
A、It needs less capital to set up.
B、It is more aware of what its customers want.
C、It has no difficulty finding trained staff.
D、It depends on personal recommendation.
答案
A
解析
转载请注明原文地址:https://tihaiku.com/zcyy/3911652.html
相关试题推荐
Economicsendowsprospectivebusinessmenwithquiteafewdesirablequalities,s
Economicsendowsprospectivebusinessmenwithquiteafewdesirablequalities,s
Economicsendowsprospectivebusinessmenwithquiteafewdesirablequalities,s
Economicsendowsprospectivebusinessmenwithquiteafewdesirablequalities,s
WhydidNiragotocourt?[originaltext]AccordingtoCourthouseNewsService,
Whoismorelikelytodomilitaryservices?[br][originaltext]Anewreport
Whoismorelikelytodomilitaryservices?[originaltext]Anewreportfromt
WhichisNOTasuggestiongivenonbusinesstravelsabroadinthepassage?[br]
WhichisNOTasuggestiongivenonbusinesstravelsabroadinthepassage?[br]
WhichisNOTasuggestiongivenonbusinesstravelsabroadinthepassage?[br]
随机试题
Lookatthechartsbelow.Theyshowcompanysales.Whichchartdoeseachsentenc
TheglaciersthatreachedthePacificCoastwerevalleyglaciers,andbetweenth
Chancesforaquicksettlementofdisputesarebeginningto_____becauseneithe
党的十八大报告指出,建设中国特色社会主义,总依据是()。A.社会主义初级阶段
底层商店住宅的建造是城市规划的需要,但也存在一定的矛盾——下列何者是主要的?Ⅰ.
符合行政登记条件的,省税务机关将税务师事务所名称、合伙人或者股东、执行事务合伙人
下列关于风险绩效考核的说法正确的有( )。A.RAROC=税后净营业利润-经济
个人理财业务中,当事人订立合同时,法律、行政法规规定采用书面形式的,应当采用书面
单室模型静脉注射给药,药物的消除速率常数的求法有A.血药浓度对时间作图,即C-t
在划分政府间事权时要设计一种体制,使得所有的参与人即使按照自己的利益去运作,也能
最新回复
(
0
)