Small Business Exposed

Chapter 3

The nature of the small firm

The amusement of adults is called business.

St Augustine, The Confessions, AD 397–398

Defining the small firm

The default to metric-driven definitions of small firms fails to address the unique nature of these firms. In fact, metrics such as counts of employees (or revenue) can be completely misleading in developing an understanding of the operations of small firms. Because small firms represent a diverse and very large group within each economy, the use of crude metrics has limited the discussion of the real nature of these firms. Small firms’ underlying complexity has caused defining them to be a “vexing and enduring difficulty” (Holmes et al. 2003, p. 4). Within the research and related literature, ...