Small businesses earn income by providing goods & services or producing goods. They can sell goods at large quantities within consumer budget or sell few expensive goods.

The strategy of e-commerce is profit maximization and cost minimization. The minimal increase in fuel prices and the increasing desire to travel have yet to significantly boost the profitability of small businesses.

While the covid-induced price hikes have stagnated, consumer spending has not seen a proportional increase. Large businesses, with their substantial profit margins and financial reserves, can offer special concessionary terms to further minimize competition, making it difficult for small businesses to thrive.

These large businesses enjoy the ability to purchase goods in large quantities at a discount and offer goods to consumers at a cheaper price than the market. Also, can affect consumer behavior.

While, small businesses are grappling with operating challenges, such as maintaining an online presence and fulfilling the growing demand for services like delivery and virtual shelves.

Small businesses can implement strategies to deal with these challenges, such as differentiation or cost leadership. Businesses with higher quality goods and unique goods qualify for a share of the market that is dedicated to them. Therefore, businesses can set prices for their goods because of customer loyalty.

Also, businesses have accessible market information and the opportunity of working with competition to create a virtual monopoly. Whereas consumers are overcrowded with information and faces challenges in accessing correct information.

Businesses that benefit from these marketing strategies offer low quality goods for cheaper prices. This marketing strategy is cheaper and easier to implement than to invest in capital or acquire higher grade raw materials.

This ineffective strategy of producing low quality goods or overpricing goods and using marketing strategy to promote goods is wasting resources. When waste is minimized to increase profit in a profit incentive environment, then it is an effective and efficient use of resources.

Investors obtain fund from consumers or financial institutions and rolls it over to a business to fuel growth. Alike lottery, an efficient and effective method of collecting wealth from everyone and providing a large pool of investment fund.

The wise investment list depends on preference. A list of long-term investments will include real estate, equity, and natural energy and minerals.

Real estate is complicated because no one will pay for a fistful of dirt. However, dirt at the right place, right time, and at the right quantity is valuable. Also, land value appreciates, but some has a ceiling, whereas building value depreciates. An investor might invest in an apartment building but might have to renew his/her mortgage to fix the building and always be in debt.

Investment in equity is complicated, but it is very well known that some companies have a strong foundation, and the share prices will not take an extreme fall.

Third investment option is well established energy and mineral companies, and they have always been the most expensive, but cushioned investment.

Before investing, you should reconsider your objectives. Analyze other large investors in these companies, and that will tell you about the company itself and its future. Also, you must understand the tax consequences before investing. As you can see, advice from a certified investment advisor and a tax advisor is very important.

Edited on December 20, 2024.