Reasons why small scale firms are common in West Africa.
(i) Where the work is done by craftsmen to satisfy tastes
(ii) Small firms are easy to set up because of small capital requirements.
(iii) General economic boom The economy as a whole may be growing with new opportunities of expansion being created open to both large and small rims, hence there is room for small firms.
(iv) The self motive. Some people like to remain their own boss, to enjoy the pride of ownership. They therefore remain because expanding may mean inviting partners
and so sharing ownership
(v) For security sake It may be risk to depend only on one large supplier, Therefore orders may be placed with small firms regularly just to keep them in business.
(vi) The size of the business unit tends to be small where the work involves the provision of direct services.
(vii) Fear of the risk: The nature of the product may be such that there are frequent changes in demand e.g. in the fashion trade, production will be on small scale so as to minimize loss if there is a fall in demand.
(viii) Government policy. Governments may institute anti-monopoly polices or policies to assist small firms.
(ix) Where the market size is small, production must be on a small scale.
(x) Small firms are easy to manage and control/ inadequate expertise in managing large scale enterprise
(xi) Small firms require small legal and administrative procedures to set up.