The main differences between a big and a small business

By | 29th October 2015

The main differences between a big and a small business

Business is business, right? Not if you’re operating a small business. There is quite a big difference between how a big and a small business function. Larger corporations are required to operate according to a more rigid structure, while a small business has more freedom when it comes to processes and management structures.

That said, here are some of the aspects that are noticeably different between the two types of business:

Small businesses focus more on employee satisfaction, while big corporations want to increase their bottom line.

People vs money. While this can’t be said for every company in the world, the human aspect of business operations becomes more diluted as the size of the company increases, and with it comes a shift in priority from people to increasing revenue. The irony of this is that many small businesses are in fact started and owned by professionals that transitioned from large corporations. They tend not to agree with this and will institute a system that recognises every single employee’s efforts. Hiring in big corporates usually involves the human resources department and perhaps one executive – you hardly ever get to meet the big boss. Small business owners, on the other hand,want to be involved in every aspect of his business, especially choosing who works for them.

HR policies are more lenient in a small business, whereas a large business requires stricter regulations.

The more people in a workforce, the more administration and resources are required to manage their needs – resolving disputes, dealing with office politics etc. Large corporations also supply benefits packages that require a fair amount of admin to institute and regulate. A small business with a few employees can easily be managed by the business owner, with a payroll management system to take care of financial administration.

The company structure differs vastly depending on the size of the business.

Big businesses are divided into different departments – each to see to a specific business process. This requires the hiring of employees that specialise in their field and are grouped together with a purpose in mind. Small businesses consist of an array of employees with different skillsets, across various age groups and experience levels. There is usually no formal structure, and people’s skills and input can be applied in more than one area of the business. This is why people are increasingly seeking to work for startups and small businesses – to be a valuable part of a new and diverse business, despite the potential absence of company benefits.

Company culture is much easier to introduce and manage in a small business environment.

Company culture is a crucial differentiating factor between a big and a small business. A smaller business has more freedom to develop company culture and, in fact, employ people who are more suited to the existing culture. In larger corporations, this becomes more of a tricky balancing act as it’s hard to recalibrate a company culture that affects hundreds of people across different sections of the business.

Managing a small business comes with its own set challenges, but with just as many rewards as working for a large business. SMEasy offers online accounting and business management software to help small business owners get greater control over the financial aspect of their operations. Our system offers an easy-to-use platform to create quotes and invoices, and manage cash flow and staff payroll. For more insights on getting your small business money matters in order download our free Guide to Startup Finance 101.


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