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What is the reason for small businesses to stay small?


Many small businesses do not want to scale that mainly depends on the company's owner because some people want to stay humble. If you are running a business using your skills, you cannot do very long hours to grow bigger. If the owner has too much family, commitments will concentrate only on the business's survival, making the right amount of profit.

Most small business owners lack finance knowledge; hiring staff to make investments is too expensive for them. Besides, they do not want to depend on others on the production side as they might lose the quality of their product. Because when the business is small, the entrepreneur gets close to the product's production, giving them peace of mind about quality control.

Some people run a small business and use all the profits for their personal use and no investment in the industry. Besides, they feel terrified of getting loans to put in the business due to some past bad experience. If that is their issue, they cannot make the company bigger. As a result, they will continue to stay where they are now.

If the business is supplying goods to the local area, they will be reluctant to move further because of many reasons like transport, staff, and the need for extra time. There will be an increase in payments for the team. They usually feel happy with what they are doing presently and do not like to move on.


Some small shops might be making good sales and money, but they will not like to move anywhere else because they live in the business with the rest of the family. Each person in the family contributes to the running of the company. So, they feel satisfied with what they have and will never think of growing the business.

Therefore they feel happy about staying small and considering the following are their benefits:

  • Keep an eye on the quality of products can control expenses to get better profit.
  • Avoid hiring staff from outside.
  • Manage their business with the family.
  • They can relax whenever they want.
  • They love what they do and do not want to risk it.
  • Entrepreneur keeps close relationships with customers.
  • Some customers prefer to deal with small companies.
  • To look after relationships with the family.

The reasons for losing the business when you stay small

Lose money due to accounting issues.

Many small business owners assume they can easily do the calculation without realizing how fast the transactions go, and failure to maintain it daily puts the business into huge trouble. You will not know how much money is coming in and how much is going out, which gives you a big financial problem. Reluctant to outsource the accounting work or hiring a freelancer to do your accounting ends up in huge loss.


Do not keep separate accounts.

They tend to use the personal bank account for the business and take money out of the company without proper recording. Therefore, when it the time for tax payments, they fall into all sorts of problems, as many assumptions when preparing the annual accounts. That gives a wrong figure for the profit or loss in the business. Then they might over or underpay, the tax to the tax office consequently falls in trouble if the inspection takes place.

Not in line with the competitors.

Some entrepreneurs rarely check the prices of the products or services of their competitors. Sometimes even if they contain, they either reduce or increase the rate drastically without thinking about their overheads. Price changes will also affect the profit if the sales are good because of costs not taken into account appropriately.

Lack of self-belief.

If anything happens to affect the business, they quickly lose confidence and not able to fight back. Because the owner used to run a small business not faced many issues, he cannot cope if anything suddenly changes.

In other words, they used to the comfort zone and did not want to come out of it and grow the business. Therefore, they fear that they can quickly fail for no exact reason because they live in a comfort zone.



I have a small business and find it challenging to grow the company because of a lack of capital and help. When you are in business, crucial that you have to have support if not for physical or financial assistance, you need excellent advice to try your level best to grow your business. Some businesses do not like to extend because they feel so comfortable with their set up and do not want to come out of it. They conclude that they have done well and do not want to take any more risk to grow the business.

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