Pros and Cons of Working in a Small Business Vs. Large Company

Still confused between working in a small business vs. large company?

No company is the same. When exploring job opportunities, you might be weighing the benefits of working in a small business versus a large company. Each has its benefits, so choosing a company boils down to what you think will work best for you and your career. Knowing the pros and cons of each in different aspects can help you decide which one to apply to.

What is the difference between a small business and a big company?

Companies, no matter the size, are always looking to fill vacancies. Your career goals and preferences can help you determine which works best for you. There are some notable differences between small and big companies.

1. Company structure

The structure of a small business is dynamic. It can differ based on employee count and movement. Goals are revisited and adjusted as needed or if the economy requires them. It means that your job description may change often, and you find yourself covering a lot of work. A small company, though, can be more flexible when it comes to addressing the needs of employees.

On the other hand, in a large company, roles and key performance indicators or KPIs are more structured. Your work schedule and job description will be the same unless you are promoted, or you move into a different function. If this structure aligns with your goals, you may favour the set-up of a large company.

2. Your role

In small companies, all employees play an important role in the company’s growth and success. Your skills may be needed for different work functions across the board, so there’s more space to challenge yourself, enhance your experience, and pick up some new skills. As you rack up experience, you can advance in the company, and your skill set may be more beneficial to the company.

In large companies, you are part of a department or team. You may share the same job function with other colleagues. There is a firm line between the tasks assigned to you and to others. Sharing job functions, though, allows you to learn from others and enhance your skills. Additionally, if the company has sister organisations, that’s an opportunity to explore a new work environment without having to completely start over again.

Read more: How to Get Promoted at Work: 7 Surefire Tips to Advance Your Career

3. Future opportunities

Because of the number of employees, small companies may have lesser openings for career advancement. However, your role here is more likely to be connected to the success of the company. You have a sense of ownership in your role because you see how your work affects the company. When you help a small business grow, you may be setting yourself up for more advanced roles in the future.

Large companies have systems in place for employees to progress to different management levels or move across functions. When you join a large company, you may be asked to share your short- and long-term career goals, and you will work with your manager to attain these goals. With a large company, you can spend more time in one job function and specialise in it over time. You may also have mentorship and training programs to aid you in your career goals and connections to industry leaders. Plus, you bring the company name, which can be useful if you look elsewhere for work.

Pros and cons of working for a large company

More resources

Since a large company may have higher revenue, it can allocate funds to helping employees. These can mean health benefits, better tools to get the job done, and budget allocations for training and seminars. They can also have a budget for higher year-end bonuses or company stocks that yield dividends. A large company may also have additional benefits, such as meal allowances or fitness budgets as perks.

More structured hierarchy

A large company may be a better option if you find it more productive to have clear reporting lines. In large companies, if you are a junior employee, there can be many people between you and your department's leader. Because of this structure, you can anticipate that decisions and approvals may take longer.

The business is more stable

Since a large company has more resources, they also have more reserves to keep going in an economic downturn. They may not terminate employees due to financial constraints, and they can afford to continue paying salaries even if the company is not fully profitable.

Slower career growth and competitive environment

Since there is a hierarchy, you can expect that career development or promotion can take time. Pay raises can also take time because there are policies on how much or when an employee can receive such. As there are more of you in a team and fewer senior roles, promotions can be more competitive and harder to achieve.

Less room for risks

A large company is risk-averse and has less room for creativity. This is because they have more to lose if they fail. They are less willing to pivot and keep their policies in place to maintain stability. A large company may also be hesitant about innovations and implementing new systems.

Pros and cons of working for a small business

Shorter hiring process

You can expect the hiring process to be shorter in a smaller company. While a large company may have as many as five to six interviews and a technical exam, a small business may have only two or three interviews.

Flat organisation

In a small business, the hierarchy of employees may not be as stringent. You could report to a manager but expect to report to the CEO occasionally. Or you could be directly reporting to a C-level executive. There can be less structure regarding reporting lines, or you could all be on the same level in a small business.

The impact is more visible

When you work for a small business, you can see how your work affects the business. You can also have a say in important conversations about the future of the business and where it’s going.

More flexibility for workflows and processes

As a small business grows, your role grows with it. This could mean that what you’re doing now will not be the same as what you do in the next six months or year. You could move into a new position or eventually lead a team.

Fewer benefits

A small business has fewer resources, so there may be less budget for learning and development. You may also need to cover basics, such as health insurance. Don’t expect year-end bonuses, especially if the company is just starting out.

Choosing between working in a small business versus a large company boils down to your career goals and working style. You might feel that you will thrive better in a smaller company, or you think you’ll be more productive when clear policies and structures are in place. Whatever path you choose, remember that this choice can work for you now, and you can change your mind. You can try working in a small business first; if it doesn’t work out, you can apply for work in larger companies.

(Read more: Why You Shouldn’t Just Follow Your Passion When It Comes To Your Career )

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