reasons for staying small

Question 1

what are the reasons for staying small?

Answer 1

• lower costs
• easier to break even
• provide a personal service
• flexibility to respond to customer needs
• control of business/reputation
• identify wastage and keeps a tight rein on costs
  staff feel more appreciated

Question 2

what are the drawbacks of staying small?

Answer 2

• overly dependent on a single product
• changes in the market can destroy the business quickly
  profit maximization is easier and more likely to happen in bigger firms = higher revenue/profit, eos
  sales maximization = linked to growth
  market share = mass market requires growth