1.3.1—Measurements of business size

Business size can be compared using employees, output, sales revenue, market share, capital employed or other measures. Each metric captures a different aspect of scale.

A firm can be large by employee count but small by market share, or have high revenue but low output if prices are high. Choose the measure before drawing a conclusion.

A software company may employ few people yet earn high revenue; comparing it with a labour-intensive manufacturer by staff numbers alone gives a distorted picture.

There is no universally best size measure, and growth in one metric does not prove greater efficiency or success.