ADVANTAGESAND DISADVANTAGES OF SMALL AND MEDIUM ENTERPRISES

 ADVANTAGES OF SMALL AND MEDIUM ENTERPRISES

1. Decision making is easier compared to large enterprises.

2. They require relatively less capital to start.

3. They have low operational costs due to fewer number of workers.

4. They are flexible in that they can even be located in rural areas.

5. Sell goods in small quantities which consumers can afford.

DISADVANTAGES OF SMALL AND MEDIUM ENTERPRISES

1. They do not enjoy economies of scale like large enterprises.

2. It is not easy for them to obtain a loan from the bank like large enterprises.

3. They easily collapse as soon as the owner dies.

4. They frequently suffer from customer changing tastes and preferences.

5. They have limited storage facilities especially for perishable goods.

6. They produce low quality products leading to limited market.

7. They lack skilled man power to manage them.