Lesson one


A business. Is any activity that is carried out in-order to get profits. It involves selling and buying of goods and services for money or exchange of goods for goods for profits. 


There are many businesses in Uganda but they arise from many factors including the following; 

  • The goods they provide
  • Means of production they use e.g. use of machines
  • The customers they serve.
  • The power / energy they use
  • The following are types of businesses in Uganda.

 Types of Business in Uganda include;

  1. Agri – business. These are businesses whose operations involving the selling and buying of agricultural products.
  2. Manufacturing business. These are businesses which process raw materials into semi and finished products.
  3. Trading business. These are businesses that deal in the buying and selling of goods and services with the aim of making profits.
  4. Service businesses. These are businesses that provide intangible products which satisfy human needs. For example, medical, transport, beautification etc. service business.


The following are the factors that determine or influence or affect the size of the business. 

  • The amount of capital / employed. Large businesses employ large capital but small or micro business to employ little capital.
  • The level of profits. High level of profits makes the business to grow big since they are re – invested but low profits discourage the expansion of the business hence being small in size.
  • The level of technology used. Advanced technology for example use of modern machines leads to business production of goods in large amounts which leads to business expansion whereas low levels of technology discourage the expansion of the business.
  • The number of employees. Large number of employees expands the business easily than a small number of employees which limits business expansion.
  • Amount of sales. A business which sells large volume of goods or services expands easily. But a business which sells a small volume of goods or services remains small in size.
  • A business man with the desire of running a small business with the purpose of dodging taxes keeps his or her business small. But a business man who wants to enjoy economies of scale operates a large business.
  • This is the coming together of firms producing similar or same products. Businesses which has accessibility to merging grow big in size than those with no possibility of merging.

1.4       Questions 

  1. Explain the factors influencing business expansion
  2. Explain the factors that limit business expansion
  3. Give reasons why most businesses are small in size