Survival of small scale firms alongside large firms/why firm tend to remain small

As firms increase their scale of operation,   they enjoy economies of large scale.  Therefore   every firm must strive hard in order to reap such benefits.   However   some firms continue   to operate   on a small scale because of the following factors.

1. Limited capital. Small firms may be limited by capital for their expansion  and this makes them to remain small for a long time.
2. Limited Market   Size.  Some   firms   may   remain    small   due   to   a small   market    size   which necessitates the production   of low output.   Therefore   the firm remains   small to avoid loss resulting from over production.
3. Using bi-products from large firms. Small  scale  firms  may  survive   When  they  are  using  raw materials   supplied  by large  firms. This makes them to remain in a small state despite the benefits of large production.
4. Providing personalized services. Small   scale   firms  which  provide   personal   services   and  pay individual   attention   to their  customers   like  doctors,   tailors  may  not  need  to  operate   on  a large scale if they  are to provide  standardized   services  to their customers.
5. Need for personal contact. The owners of small scale firms can easily develop personal  contacts with their customers.   This  may help  the  firms  to keep  on operating  unlike  large  firms  where  the owners  may not develop  personal  contacts  with  their customers  e.g. salons.
6. Simplicity in management.   Small   scale   firms   are   easy   to   manage    that   is   there   is   easy communication    and co-ordination   within the small firm unlike large firms.
7. Beginner firm. When  the  firm  has  just   started,   it  operates   on  a  small   scale  because   time  is required  for it to expand  and enjoy the economies   of large scale.
8. Fear of diseconomies of scale. Unlike   large   scale   firms,   small   firms   do not   face   internal diseconomies   of scale and therefore, this forces them to small for a long time.
9. Production of very expensive products. Firms  engaged  in the  production   goods  of  ostentation may  remain   small  because  of the nature  of their  expensive  products   and  the need  to show  class among  their  customers.  Examples are firms dealing in sports cars, expensive jewelry   etc.
10. Flexibility in production. Small scale firms can easily change  the line of  production    without wasting   much  resources   for  example   when  the  market  demand   changes,   a small  firm  does  not lose so much  as compared  to  a large  firm,
11. Production of bulky and fragile products. Small   scale   firms   dealing   in  bulky   and   fragile products   may  feel  secure  to remain  small  to avoid  risks  of over  expansion   e.g.  Firms dealing in glass making, brick making, eggs etc.

12. Fear of paying taxes to the government.  Small firms can easily avoid and evade paying   taxes and this makes them to operate on a small scale.