Advantages of Small Business

Small businesses are very important for the success of every economy. They meet the needs of the local folks and have such awesome success stories.

Studies show that small businesses make up about 99% of all employer firms in the US.

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The benefits that small businesses bring to the community are numerous compared to the bigger more established competitors.

Same way it is difficult to turn a big vehicle as compared to a small one, large companies are not as swift and agile as the small ones.. Because of their size, changes are slow and difficult.

It is easier for small businesses to come up with new ideas and try them out. This is because they don’t have past experiences to slow them down or scare them away. Small businesses are quick and this swiftness is absolutely an advantage in getting new products to the market.

A small business is born when a potential entrepreneur notices a gap in the market, a need that’s not being met, then he/she turns his/her idea into a product or service that’s marketable.

The four main types of business are manufacturing, retail, wholesale and service.

There are certain characteristics that all successful entrepreneurs have in common. They are;

  • self motivated
  • not afraid of failing
  • ready to take risks
  • driven by success
  • intent on staying ahead of the competition

Advantages of Small Business

Personal relationships

Because of their setting, small businesses are perfectly suited to create the best relationships with their employees, suppliers and most importantly their customers.

Small businesses make it easy to put a face to the person you are dealing with. the customer gets more personalized service. One on one interaction is becoming very vital in creating lasting relationships.

The customers feel they can trust the product they are buying because they know the sales people or store owner.

The employees on the other hand feel at home and like they are working with family. This makes them happier and more productive.


The fact that small business owners need not seek approval or permission from anyone else makes relatively easy for small businesses to come up with, introduce and develop new ideas. Products invented in small businesses hit the market shelves fast.

While in the bigger enterprises, there has to be meetings with and approval from shareholders. This makes it very difficult for them to introduce some new product and bring it to the market.

Low Overheads

Small businesses have way lower overhead costs compared to their larger competitors. This is because of their small scale of operation.

Their operations are run in small facilities with low heating and lighting costs. Their rent and rates are also limited.
Spending less in production, means they can sell their products for less to customers thus pulling them in.

Swift and Flexible Response to Challenges

The chain of command in small businesses is small. This makes it very easy for them to solve problems that may be facing the company as well as make decisions on what needs to be done.

This is the total opposite in the bigger enterprises. They have a long chain of command. They have a set ways and procedure that should be adhered to before any decision is passed.

This means that it takes them so much longer to solve any problems facing the company or any grievances from the customers.

Cater to limited niche market

Small businesses can make profits from low sales figures. This means they can sell to even smaller markets such as a jeweler with personal clients, an owner of a mall grocery shop who caters to personal clients…Etc.

Bigger enterprises cannot do this because they have to produce high levels of outputs to meet their high overheads.

Setting up a small business gives you a sense of achievement and independence. You also get o enjoy the fruits of your own labor which is by far the biggest motivator.