Unit 1: Business Activity | Why do businesses stay small?

There are several reasons why businesses stay small: 

Type of industry the business operates:

Firms in industries such as hairdressing, window cleaning, etc. offer personal services or specialised products. If they were to grow too large, they would find it difficult to offer close and personal service demanded by consumers.

Market size:

If the market (total number of consumers) is small, the businesses are likely to remain small. This is true for firms which produce specialised products/services - which appeal only to a limited number of consumers.

Owners’ objectives:

Some owners prefer to keep the firm small, to have more control over it or to avoid stress and worry of running a large business.