Disadvantage of the Small Business
There are disadvantages of small business even if there are advantages, nothing could be so perfect. Small business could have difficulty in raising capital. Without financial assistance from the government,a small business has limited ability to obtainfunds from others. Initially, it is the owner who provides a capital for his business. If additional funds are needed, these can be obtained from relatives, friends or banks. In many case such loans are not ebough. The bank can only extend a loan which is equivalent to about 60-70 percent of the value of the property used as a collateral. In the case of big corporations, they can sell shares of stock to the public to raise funds. Banks are more willing to give loans to big business.
Risk failure. A small business does not have enough financial resources to survive bad economic conditions. ZIts inability to absorb losses and unforeseen events forces the owner to go out of business.
Small business also had a limited skills. Owners of small businesses geenrally lack management skills. They have no formal education or training in management and marketing. They just manage their enterprises through institutions or practical business techniques. In the case of big corporations, professionals managers are hired to do the job.
Lack of opportunities for employees. Most of the employees of a small business are sales staff. Only very few of them become supervisors. There are countries that small enterprises are family-owned. Those who are holding managerial and supervisory positions belong to the family or relatives in most cases.
