ABSTRACT
Throughout this book it is emphasised that the small firm is not simply a scaled-down version of a large firm. Because they are managed by their owners, because they represent an alternative to paid (salaried or wage) employment and because so many are, or could become over a very short period, close to failure small firms have different aspirations from large firms. Furthermore most small firms lack market power in both the product market and in the purchase of inputs and so are generally price takers. Hence, small firms are likely to respond differently from large firms to financial and non-financial stimuli such as taxation incentives and other opportunities for expansion. As a group small firm performance is likely to be more variable than that of a group of large firms.
