SMEs
It is a business with fewer than 250 employees according to the European Union’s definition.
Why do firms choose to stay small?
- Out of fear
- Expanding may lead to losing all profit
- May not be able to expand
- Country Laws
- No high demand
- Expensive to hire people
How can small firms survive?
By advertising their business:
- Social media
- Posters
- Talking
Good customer service
Cheaper
Why?
- Personal service
- Owner’s preference
- Flexibility and Efficiency
- Lower costs
- Low barriers to entry
- Monopolists
Small businesses competing with large businesses – How to over come the treat
- They can be cheaper than large businesses
- Involving the location – closer to customer’s home
- It could link to the customer’s wants
- Popularity – Heard good reviews
- Some customers may know the owners of the small business making it easy and accessible
- Hard working – market research
Economy
Advantages –
- Provides local jobs
- Some products may be cheaper
- More profitable and exhibit faster growth
- Stability for the future
- More flexible
- Specialised markets
Disadvantages –
- Not as much tax
- Not on a large scale – less customers/profit
- Unknown
- No brands