SMEs: At a disadvantage

SMEs: At a disadvantage

05/02/2014 | Adrián Corona Cuesta (Alumno UC)

What is the first thing we think of when we hear the word “SMEs”? Have SMEs got the same financial opportunities as larger firms? Have SMEs got the same opportunities to access technology as large companies? I am going to write about the different advantages and disadvantages that SMEs have so that if you want to start a business, you will know what they are.

We think about small and medium enterprises as having few workers and a moderate turnover. Nowadays, in Spain SMEs represent the 99.9% of companies so, in my opinion, they are the basic building blocks of our economy. However, the first thing that needs to be said is that all companies do not have the same opportunities for funding. This is a disadvantage for small and medium firms since this can stop or at least their development.

Furthermore, it is interesting to consider that, due to this lack of financing, SMEs cannot buy new technology and they cannot compete with bigger firms. And I believe that the SMEs are in a “vicious circle” considering that if they don’t have financing, they won´t buy new technology but if they don´t buy new technology, they won´t be able to grow. Therefore, they need funding. For this reason, SMEs have some disadvantages such as a higher risk of bankruptcy and the aforementioned lack of financing.

On the other hand, the SMEs have some advantages as they are very adaptable because of their small size. They can specialize their activities for different clients and they can give direct and personal attention to their customers.

Finally, from my point of view, large firms have a lot of advantages in the face of SMEs like, for example, the fact that they pay less tax. And, personally, I don’t understand this: if the SMEs represent the 99, 9% of companies, why they don’t have more advantages? I think the income tax for the SMEs in Spain is too high and also I think that, in the future, the government will continue to increase these taxes, thereby causing many SMEs to be put out of business.

Nota: Este artículo ha sido elaborado por Adrián Corona Cuesta, alumno de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM.

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