ADVANTAGES AND DISADVANTAGES OF A SMALL COMPANY

Mauricio Waisman
ADVANTAGES A. Administrative and operational flexibility that facilitate surviva
l under conditions of changeable market
DISADVANTAGES A. It is based on the work of the owner and therefore his absence
for illness or travel abroad can greatly hinder business activities. B. In small
companies (or family partnerships) an emotional or personal feud between the pa
rtners may affect the activities until the closing of the firm. C. The firm must
also keep family members. Salaries removed from the firm are not always appropr
iate to the case or the capital or the production capacity or in relation to ear
nings.
B. Ability to make quick decisions. This enables flexible operations and rapid r
eaction in the market and adequate time. C. As a small business, the owners and
the board have the same interests, compared to what sometimes happens between ow
ners and stock in medium and large firms.
D. ADVANTAGES It is easier to identify market segments appropriate to their size
or to enter new. Niches
D. DISADVANTAGES The business of an owner may enter into crisis when they move t
o the new generation. The children do not always agree among themselves about th
e direction of development of the business,. Brawls can destroy E. The financial
reports are not always organized. Sometimes there are no separate accounts betw
een the personal affairs of the owners and the. affairs of the firm F. Due to be
ing small, there is no ability to employ or pay professionals as treasurer, dire
ctor of special expert. Marketing, etc.
E. Profit on capital is higher, depending on the next run of the owners, control
over expenses and correct relationship between efficiency and flexibility (assu
ming the owner will have. (F. management capabilities After a crisis such as dep
ression or change in direction the growth steps are faster than a company with p
roduction. great
ADVANTAGES G. It's easier to get orders in a small firm than in a. Great
DISADVANTAGES G. When there is a crisis, as sharp drop in sales, lack of capital
development, etc.. - Public institutions like government or labor union does no
t provide relief, as they do when it comes to a company that goes into great dif
ficulties. When the owners are in crisis themselves. Confront alone H. The banks
still consider small firms as risk, especially in early stages, and require per
sonal guarantees them heavy, sometimes owners have. Difficulties to
H. Flexibility in contact with the banks. If necessary it is possible to bring c
apital home, while in the large firm. Situation is more complex
I. ADVANTAGES Can operate as a subcontractor for many large companies, specializ
ing in the production of a particular item or service and combine with mass prod
uction. The function of sub-contractor J. Capacity and possibility of leaving th
e firm to the next. Generation
DISADVANTAGES I. The specialization and dependence on one customer has great ris
ks: if the customer decides to change direction, the business that was dependent
on him. May collapse
J. Usually suffers from lack of professional expertise and lack of administrativ
e capacity in critical fields of the owners) marketing. (. Financing, etc. K. su
ffer from lack of ability to use all the help official function. L. Lack of bure
aucracy involved in " breath "financial. times of trouble