Why do small firms continue to exist side by side with large firms despite the advantages of large firms ( large sale production)?

Small firms are easy to manage hence efficiency and reduced costs of production.

Some small firms use bi-products of large firms for instance sweat making firm uses sugar from the sugar producing firm and so the two firms cannot compete with each other but co-exist for mutual benefit.

Small firms do not require heavy advertising as large firms do hence incur less costs.

In some cases, small firms are located far away from large firms hence can monopolise local markets even if they sell at higher prices than large firms.

Small firms face no problems of internal diseconomies of scale.

Owners of small firms have the ability to easily develop personal contacts with customers. Later, they can start giving credit to their customers which enables them to maintain their market despite the fact that they sell at higher prices normally.