Small Businesses

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?

  1. Personal service
  2. Owner’s preference
  3. Flexibility and Efficiency
  4. Lower costs
  5. Low barriers to entry
  6. 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
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