1.3.2—Significance of small businesses

A small business may employ few people or serve a narrow market, yet contribute through local employment, specialist products, innovation or personal service.

Small scale can allow flexibility and close customer knowledge, but may also limit finance, bargaining power and economies of scale. Its significance depends on context.

A specialist repair shop can survive beside a national chain because it solves unusual problems quickly, even though its revenue and workforce are much smaller.

“Small” is a measurement relative to a market; it does not mean inefficient or unimportant.