Sample Management Paper on Small and Large Businesses

Businesses exist primarily to maximize profits. Establishing a successful business
requires the owner to implement effective business models and strategies to eliminate the
business environment's challenges. Despite thriving towards profit maximization and sometimes
operating within the same market, small and large businesses differ in that large businesses
require a massive investment of capital to start compared to small business (Gray & Mabey,
2015). Therefore, small firms differ in size from larger ones and tend to have different financing
agreements, legal structures, and market niches.
The size of a business is measured by its workforce size and the total revenue during a
specified period. For instance, a company is considered large if it has over 500 workers and
accumulates profits to a sum of USD 7 million annually. Alongside their size, businesses are
categorized as either small or large based on their legal structures, which determine their
management, liability for business debts, and taxation (Gray & Mabey, 2015). For instance, most
small businesses start as sole proprietorships, which give the owners complete control over the
firms. As such, owners of small businesses must pay income taxes for the profits they obtain on
their income, whereas large companies remit corporate taxes.
Apart from their size and legal structures, small businesses differ from large ones in their
market niches. While small businesses make profits through the sale of a single line product or
service, large companies provide customers with various services and products (Gray & Mabey,
2015). Moreover, new small businesses ideally receive financing from bank loans and the
owner’s savings compared to large businesses. In comparison, medium-sized and large
corporations attract financing from outside sources like venture capital companies and investors

(Gray & Mabey, 2015). Therefore, large and small businesses' primary differences are their
finances, legal structures, and market niche.



Gray, C., & Mabey, C. (2015). Management development: key differences between small and
large businesses in Europe. International small business journal, 23(5), 467-485.