25 Analyse the reasons, why businesses remain small. [6]

[Maham fatima]

[KN]The type of industry
[AN] Some businesses operate in industries where more personal and specialized services are preferred eg hairdressing
[AN]therefore it may be difficult to satisfy customers if such a business is expanded


[KN]Market size
[AN]Some businesses have a small customer base,mostly in niche markets for eg a business' customer base may be limited to one area then there is no reason for expanding into other areas
[AN]therefore it is likely to remain small

[KN]Owner's objectives
[AN] it can be stressful for an owner to look after many branches hence may not expand
[AN] hence reducing work burden on owners

[Abbas17]

(KN) Lack of Management Expertise
(AN) as owners of small businesses may lack the necessary management skills and experience to handle larger operations of a business effectively,
(AN+) hence, this can be a barrier to growth and restricts them from expanding the business and remain small.

(KN) Lack of capital
(AN) small businesses do not have the necessary capital to expand or grow as well as banks are hesitant to lend them loans with fear of it not being returned to them on time,
(AN+) hence, this could be one of the reasons why a small business remains small, it is because they don't have the capital or funds available to grow their business.