Small businesses are resilient. It’s a truism—everybody knows it. But while the statement is true, it’s not foolproof and it’s not uniform. Resilience is no panacea; some challenges can’t be adjusted around. Here’s the reality: Small businesses are more agile, specialized, and connected to their clients than big businesses. Big businesses are more diversified and have more funding options.  Again: Small businesses are resilient. But their resilience, as powerful as it has proven, also has limitations.

Why Small Businesses Are Resilient

Being small gives a business many advantages. If the rug is pulled on the primary business—say, running a restaurant and a public health crisis closes in-person dining—the options are pivot or close. At small-business restaurant, the small size and owner’s proximity to its operations make shifting strategy quicker and easier. Take out? Pre-made meal kits? Redesigned menu? The decider is right there, on site, able to cut through any organizational red tape and execute the new approach. Not so with a large chain.

Small businesses know their clients. What is the right pivot in a crisis? At a small business where the owner personally knows their customers, they have the intimate, local knowledge they need to make informed adjustments. Again, this contrasts to big business, where the owner or CEO does not know their clientele personally and operating in multiple markets might mean there is no one ideal adjustment anyways.

Small businesses have different value-add. Large businesses excel in uniformity and lower costs through economies of scale. There’s no uniform benefit to small business, but things like customization, specific niche tastes, and community connection can create advantages that are more valued than a few percent of saving.

Small Business Resiliency Disadvantages

Small businesses also have relative weakness in managing difficulties, with two primary types. The first is raising funds. Almost all small businesses are privately held, usually by a person or a small partnership. They often have no open lines of credit (outside of business credit cards). Their value is also tied to the owner, such that if the owner sells it and no longer works there, the business may be worth less.

That’s a stark contrast to large businesses. Large businesses have much easier access to credit markets, often with large standing lines of credit and deep ties to financial institutions. In addition, large businesses can easily raise capital through ownership vehicles, whether stock for publicly-held companies or via private equity. Such funding access can bridge a short-term disruption or fund an investment needed to shift strategy. And for leadership, the CEO is usually much more replaceable than a small business’s owner/operator.

Diversification is the other major resiliency advantage for large businesses. It’s a lot easier to pivot from a struggling sector to a strong one if you are already in the strong sector. Imagine an economic crisis that hits certain geographies much harder than others (almost always the case). A large construction company with broad geographic areas can focus resources on their stronger locations. Small construction companies, on the other hand, tend to be confined to a specific locality. If they’re in one of the poorly performing areas, their only option might be to tough out the bad conditions.

Enduring Challenges

Small businesses can out-pivot big businesses, but they can’t pivot around every challenge. Recent NFIB research highlights one such example: Energy. While there are obviously some efficiencies available, the data shows that options to avoid energy costs are extremely limited. A restaurant or retailer can deploy more efficient technologies, but they still need to light and climate control their locations, making savings limited. The same applies across other sources: The electrician still needs to get their work vehicle to the client site, the manufacturer still needs to run their heavy machinery, the farmer still needs to drive their tractor, etc.

The Certainty of Uncertainty

Ben Franklin famously said, “Nothing is certain but death and taxes” (an aphorism that can feel especially true for a small business owner), but a sort of meta message in there is that uncertainty itself is also certain. Businesses will always need to be prepared for the unexpected, always need to practice resilience.

Resilience is a strength of small businesses, but not in every way. Instead, strengths in agility, customer connection, and unique value add contrast with limitations on funding access and diversification. And not all challenges are something small business owners can do much to respond to. Resilience is part of what makes small business special, but its power has limitations. Policymakers must value small business resilience but avoid relying on it.