Advantages of being a small firm

Question 1

Give advantages of being a small firm.

Answer 1

• Niche market
• No diseconomies of scale
• Small firms can be more flexible and can change much faster.
• Less likelihood of government intervention
• If they are not PLC then they do not have to publish their accounts
• Personal service with the customer

Question 2

Reasons for why firms stay small.

Answer 2

• Not being ablate compete with rival
• Owners might want to keep full control of the firms so no shares
• Difficult to fin financing