Reasons for staying small:
1. The business can offer a personal service.
In 2014 Rolls Royce sold 4,063 cars.
They offer very personal service.
A record number of customers spent time with Rolls Royce design consultants designing their personalised vehicles.
Click on the picture:
A private and select bank:
https://www.coutts.com/private-banking.html
2. The owners preference:
Remember 'lifestyle' businesses from the A/S?
3. Small businesses can be more flexible and efficient.
4. Lower costs.
Larger firms may have nationally agreed wage rates.
Smaller firms may not pay as much.
5. Low barriers to entry allow small businesses to start up.
6. Small firms can be local monopolists.
https://www.qmsu.org/villageshop/
Product differentiation and USPs.
Smaller businesses may be able to enter markets dominated by larger competitors.
Another example from banking:
Peer to peer (P2P) lending.
Confectionary:
Details here.
Small business flexibility in responding to customer needs.
How can a small house builder be more flexible than a large housebuilding corporation committed to building 100 houses on a plot of land?
Small businesses and customer service:
Personal service may be a USP.
Communication is likely to be easier with a small business.
Building relationships with customers is likely to be easier with small businesses.
Somebody running an e-commerce business from home is unlikely to rapidly grow in size.
Somebody running an e-commerce business from home is unlikely to rapidly grow in size.
