Read the following cases and answer the questions which follow:

CASE $1$

Small Firms

Negus grant owns a pet shop in Montego Bay. The business is well established and consists

of a side street shop in the town centre and a thriving online business. The turnover was

around $$3,000,000$ per annum up until $2012.$ However, after this, sales started to fall as a

result of competition from new online traders. Negus had always been reluctant to grow

the business because the turnover and profit were enough to keep him and his small family

very comfortably. Negus also liked to spend a lot of his time playing football and shooting

birds. Growing the business would have meant less time for his hobbies. In $2018$ Negus'

son became interested in the business and he was encouraged to develop the online

service. Negus knew that if he did not offer an online service he would struggle to survive.

The business now generates a turnover of $$5,000,000$ per year which is enough to keep

everyone happy. Negus and his son did not have any other employees.

Tamara operates a financial services business in Falmouth, Trelawny. She employs a small

team of four financial planning advisors with the qualified expertise to provide specialist

advice on all aspects of investments, pensions, mortgages and insurance as well as

inheritance tax and estate planning. Her advisors provide recommendations to suit

individual requirements, although many clients have common goals such as:

To be financially independent and to know how they can maintain a certain lifestyle

To ensure that their hard$-$earned money is preserved for their future security and

that of their family and next generation

To work with an expert that understands their circumstances and can be trusted to

be impartial at all times

A need for professional support to organise and manage their financial affairs on an

ongoing basis.

Tamara's business is very successful. She does not advertise and relies on "word of mouth"

or all new business. The quality of her personal service is well known in town. In $2020$ the

profit was $$6,000,000$ and employed a total of $12$ staff.

Questions:

a$)$ What evidence is there to suggest that the two firms described above are small

businesses?

$[5$ marks$]$

b$)$ Explain why the two firms above are likely to remain small.

$[10$ marks$]$

c$)$ Discuss why small firms have been able to survive in such large numbers.