3-2-4-reasons-for-staying-small

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Small business survival in competitive markets

Many firms start small and grow into large companies or even multinational corporations
- For example, Amazon’s founders started the business in a garage
While many firms grow, others do not, or they intentionally choose to remain small but are successful for a range of reasons

Small firms often offer something unique that larger businesses cannot easily copy
- A unique selling point (USP) helps a business stand out in a crowded market
- Products might be handmade, locally sourced or tailored to a niche audience
  - E.g. a small chocolate company selling luxury vegan truffles that aren’t available in supermarkets

Small firms can adapt quickly because they have fewer layers of decision-making
- They can change product features, pricing or delivery methods with ease
- They may be more likely to experiment with new ideas or react to trends faster than bigger firms
  - E.g. a local café may switch to oat milk or offer gluten-free cakes based on regular customer requests

With fewer customers, small firms can build close relationships with customers and offer a personal experience
- Customers may value being recognised and listened to
- Good service often leads to word-of-mouth promotion and repeat business
  - E.g. a hairdresser who remembers each client’s style preferences and offers appointments outside regular hours

The internet allows small firms to reach national or global markets without needing lots of money
- These firms can sell through platforms such as Etsy or their own website
- E-commerce lowers costs by removing the need for a physical shop
  - E.g. a jewellery maker selling handmade earrings through Instagram and shipping across the UK

Some small firms exist because their owners do not aim for rapid growth or maximum profit
- They may focus on achieving work-life balance or doing something they enjoy
- This is known as satisficing, which is aiming for enough profit to live comfortably rather than the highest possible return
- Many small businesses are lifestyle businesses, set up to suit personal goals rather than pursue aggressive expansion
  - E.g. a self-employed graphic designer working from home who chooses projects they enjoy and sets their own hours

Choosing to stay small — The Cornish Scent Company

The Cornish Scent Company produces handmade scented candles and toiletries using natural ingredients, building a loyal customer base through local markets and its own website

Why the business chose to remain small

Product differentiation and USPs
- Each product is handmade using locally sourced ingredients
- Scents such as “Cornish Sea Breeze” and “Clotted Cream and Honey” reflect the region’s identity
- The small-batch process and unique branding help the company stand out from mass-produced competitors
Customer service
- The owners personally handle most customer interactions
- This personal touch — such as handwritten thank-you notes — has helped build strong customer loyalty and excellent reviews online
Owners’ objectives
- The owners, a husband-and-wife team, started the business to pursue better work-life balance after moving away from busy city jobs
- They prioritise family time and creative control over high profits, showing clear satisficing behaviour
E-commerce
- Rather than opening a shop, they sell online through their website and Etsy
- This keeps overheads low and allows them to reach customers across the UK without growing the business too quickly