Essay on Importance Of Small And Medium Sized Enterprises

Essay on Importance Of Small And Medium Sized Enterprises

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The importance of small and medium-sized enterprises for the country’s economy and the society as a whole has been played down. This underestimation is evident since there is the lack of suitable conditions for developing entrepreneurs. Small and medium-sized entrepreneurial entities are, according to Runge, important in the economic and social (Runge, 2014). The significance is due to the fact that they achieve better results as compared to large enterprises based on certain indicators like productivity, efficiency, and profit, creation of new jobs, ensuring competition on the market, and elimination of monopoly (Bartlett, 2000). They account for the vast majority of the active private businesses in the country and represent large shares of its employment. However, small businesses face some operational challenges, and as a result they have higher failure rates than those for larger companies. This exposition provides a summary of why or not the businesses are successful, challenges faced and how they to overcome them, and the best practices.
Small businesses created the vast bulk of jobs in the American economy. Statistics from the United States Central Bureau about business sizes has revealed that upcoming companies are more likely to create jobs than established companies (Matt Olsen, 2015). The same statistics show that over the last few years, new businesses have tended to be smaller and stay leaner than those in the past. Small and medium-sized businesses constitute the overwhelming majority of firms in practically every industry of the American economy. One way to measure the contribution of small business to the country 's economy is by observing their role in doing business in areas where it is less feasible for large ...

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...p the targeted market and stay relevant.
Although small and medium-sized enterprises play a critical function in the American economy, they are faced with numerous challenges in dealing with fluctuations in demand, the market share, the costs of doing business, managerial skills, and most importantly financial issues. The specific market failures that prevent entrepreneurs from starting and growing new businesses should be identified and dealt with appropriately. From the business sizes statistics from the United States Central Bureau, it is clear that upcoming enterprises are more inclined to create jobs than established companies. They, therefore, have a positive impact on the jobs and economy of the United States. Nonetheless, these enterprises generally have higher failure rates than those for larger companies as a result of the many challenges they experience.

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