Small business: advantages and disadvantages

Small business is a kind of entrepreneurial activity, formed at own risk. It is characterized by low production volumes and revenues, limited by staff.
This business, like any other, has its advantages and disadvantages, which will be written in more detail.

Small business benefits:

• Low start-up costs and full control over the company. Even If you have a small startup capital, then you all have a chance to open a successful small business.
• Easy to manage. Due to its size, small business is much easier to manage and control all processes. The owner can always control his employees since they are few.
• Mobility and flexibility. Small business easily adjusts itself to market requirements; necessary adjustments are made quickly enough. Also, in the case of force majeure, changing the location of a small shop is much easier than transferring an entire industrial complex. Small business is more focused on the end consumer than large firms.
• Convenient to promote: a large number of low-cost advertising media are available.

Disadvantages:

• Limited capital. Insufficient amount of working capital can restrain the development of small firms. This affects both the production level and product innovation.
• Difficulties in competition with large firms. Small business can often be at a disadvantage since larger competitors have a “promoted” name, which attracts customers, and high leverage.
• High crisis risks. During an economic downturn or even more so a crisis, it is much more difficult for small enterprises to survive than large ones. Large companies can get from the state of various easing, for example, tax cuts, or a delay in the payment of the loan. Small business is much more difficult to do. And getting credit to a small enterprise is also harder than a big industrial giant.