Small businesses have several advantages such as low startup capital, ease of entry and exit into the market, operational flexibility, and more satisfied customers due to personal attention. However, small businesses also face disadvantages like lack of capital and financial limitations restricting expansion, lack of managerial skills depending on the owner, inability to adopt new technologies due to costs, and difficulty hiring expert staff. The document discusses and compares the key advantages like low costs and responsiveness versus disadvantages such as limited resources and higher risks for small businesses.