WHY SOME BUSINESSES REMAIN SMALL

• THE TYPE OF INDUSTRY THE BUSINESS OPERATES IN- Here are some examples of industries where most businesses remain small: hairdressing, car repairs, window cleaning, convenience stores, plumbers, catering. Businesses in these industries offer personal services or specialised products. If they were to grow too large, they would find it difficult to offer the close and personal service demanded by consumers. In these industries, it is often very easy for new businesses to be set up and this creates new competition. This helps to keep existing businesses relatively small.
• MARKET SIZE-If the market – that is, the total number of customers – is small, the businesses are likely to remain small. This is true for businesses, such as shops, which operate in rural areas far away from cities. It is also why businesses which produce goods or services of a specialised kind, which appeal only to a limited number of consumers, such as very luxurious cars or expensive fashion clothing, remain small.
• OWNERS OBJECTIVES- Some business owners prefer to keep their business small. They could be more interested in keeping control of a small business, knowing all their staff and customers, than running a much larger business. Owners sometimes wish to avoid the stress and worry of running a large business.