Most small businesses producing consumer goods and services with the elasticity of demand for low-income, then the average income level of society did not affect the demand for goods produced. Instead increase the income level also had no effect on demand.
Most small businesses do not get capital from banks. The implication banking sector slump and rising interest rates, not much affect this sector. Unlike large-scale effort that much depends on the bank, if the troubled banking sector, then join disrupted business activities, while small businesses can survive. In Indonesia, small businesses usually use their own capital from savings and access to banking is very low.
Small businesses have limited capital and competitive market.The impact of small businesses have a strict specialization of production. This allows small businesses to easily move from one business to another business, barriers and out of nothing.
Reform eliminate the barriers in the market, industry protection is removed upstream, small businesses have more choices in procurement of raw materials. As a result production costs down and increase efficiency. However, because it coincides with the economic crisis, then the effect is not too large.
With the prolonged economic crisis led to the formal sector many lay off his workers. The unemployed are entering the informal sector, carry out business activities mostly small, consequently increasing the number of small businesses.During the prolonged economic crisis, small businesses can survive and have the potential to grow. Thus, small businesses can be a mainstay for the foreseeable future and should be supported by policy-¬ a conducive policy, as well as problems that hinder efforts to empower small businesses should be eliminated.
