{"id":19671,"date":"2024-09-23T12:20:48","date_gmt":"2024-09-23T11:20:48","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=19671"},"modified":"2026-07-09T15:33:13","modified_gmt":"2026-07-09T14:33:13","slug":"what-is-comparative-advantage","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/what-is-comparative-advantage\/","title":{"rendered":"What is comparative advantage and how does it help small business owners?"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tWhat is comparative advantage and how does it help small business owners?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<div class=\"col col-8 col-lg-4 entry-header__image\">\n\t\t\t<figure class=\"entry-header__thumbnail js-hero-section\">\n\t\t\t\t<img decoding=\"async\" width=\"1214\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage-1214x810.jpg\" class=\"entry-header__thumbnail-image\" alt=\"Bakery owners calculating comparative advantage\" fetchpriority=\"high\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage-1214x810.jpg 1214w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage-768x512.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage-1536x1024.jpg 1536w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage-2048x1366.jpg 2048w\" sizes=\"(max-width: 1214px) 100vw, 1214px\" \/>\t\t\t<\/figure>\n\t\t<\/div>\n\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2024-09-23T12:20:48+01:00\">23 September, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"What is comparative advantage and how does it help small business owners?\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-gb\/blog\/what-is-comparative-advantage\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__icon social-share-button__icon--share\">\n\t\t\t\t<svg aria-hidden=\"true\" class=\"svg-icon\" focusable=\"false\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"18\" height=\"18\" viewbox=\"0 0 1024 1024\"><path d=\"M768 106.5q-62 0-105.5 44t-43.5 105q0 10 2.5 18.5a268 268 0 0 1 4.5 17.5l-256 128q-21-26-50-41.5t-64-15.5q-62 0-105.5 44t-43.5 105q0 62 43.5 106t105.5 44q35 0 64-16t50-41l256 128q-2 9-4.5 17.5t-2.5 17.5q0 62 43.5 106t105.5 44 105.5-44 43.5-106q0-61-43.5-105t-105.5-44q-35 0-64 15.5t-50 41.5l-256-128q2-9 4.5-17.5t2.5-18.5q0-9-2.5-17.5a268 268 0 0 1-4.5-17.5l256-128q21 25 50 41t64 16q62 0 105.5-44t43.5-106q0-61-43.5-105t-105.5-44m0 64q36 0 60.5 25t24.5 60q0 36-24.5 61t-60.5 25-60.5-25-24.5-61q0-35 24.5-60t60.5-25m-512 256q36 0 60.5 25t24.5 60q0 36-24.5 61t-60.5 25-60.5-25-24.5-61q0-35 24.5-60t60.5-25m512 256q36 0 60.5 25t24.5 60q0 36-24.5 61t-60.5 25-60.5-25-24.5-61q0-35 24.5-60t60.5-25\" \/><\/svg>\t\t\t<\/span>\n\t\t\t<span class=\"social-share-button__icon social-share-button__icon--copy\" hidden>\n\t\t\t\t<svg aria-hidden=\"true\" class=\"svg-icon\" focusable=\"false\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"18\" height=\"18\" viewbox=\"0 0 1024 1024\"><path d=\"M698 85.5q-45 0-88.5 17.5T531 154.5l-430 431q-3 2-4.5 4.5t-3.5 5.5q-1 3-1.5 6t-.5 6q0 4 .5 7t1.5 6 3 5.5a54 54 0 0 0 4 4.5q3 3 5.5 4.5t5.5 2.5q3 2 6 2.5t6 .5 6.5-1 6.5-2 5.5-3a54 54 0 0 0 4.5-4l430-431q51-50 122-50t121 50q51 51 51 122t-51 121l-406 406q-26 27-62.5 27t-63.5-27q-26-26-26-62.5t26-62.5l328-328q3-2 4.5-4.5t3.5-5.5q1-3 1.5-6t.5-6q0-4-.5-7t-1.5-6-3-5.5a54 54 0 0 0-4-4.5q-3-3-5.5-4.5t-5.5-2.5q-3-2-6-2.5t-6-.5-6.5 1-6.5 2-5.5 3a54 54 0 0 0-4.5 4l-328 328q-44 44-44 107.5t44 108.5q45 44 108.5 44t107.5-44l406-407q35-34 52-77 17-44 17-89t-17-89q-17-43-52-78-34-34-77.5-51.5T698 85.5\" \/><\/svg>\t\t\t<\/span>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/author\/kieronjohnson\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/01\/Kieron-Johnson-350x350.jpg\" class=\"entry-author__image\" alt=\"kieron-johnson-profile-picture\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/01\/Kieron-Johnson-350x350.jpg 350w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/01\/Kieron-Johnson.jpg 600w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Kieron Johnson<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">With <a href=\"https:\/\/startups.co.uk\/news\/101-new-businesses-every-hour\/\" target=\"_blank\" rel=\"noopener noreferrer\">101 new businesses being launched every hour<\/a>, the small business sector is as competitive as ever.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As an entrepreneur, you&#8217;re always striving to get ahead\u2014to gain an advantage over your competitors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One of the easiest ways to do this is to focus on doing what your business does best (and avoid doing what your business doesn&#8217;t excel in).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When you do this, you can increase the efficiency and profitability of your business without even breaking a sweat. Welcome to comparative advantage 101.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this article, we&#8217;ll define comparative advantage and explain how to calculate it. We&#8217;ll also compare it to other types of advantage and map out its benefits and challenges.<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-a-comparative-advantage\" data-level=\"2\">What is a comparative advantage?<\/a><ul><li><a href=\"#h-how-to-calculate-comparative-advantage\" data-level=\"3\">How to calculate comparative advantage<\/a><\/li><\/ul><\/li><li><a href=\"#h-what-are-absolute-advantage-and-competitive-advantage\" data-level=\"2\">What are absolute advantage and competitive advantage?<\/a><\/li><li><a href=\"#h-benefits-and-challenges-of-comparative-advantage\" data-level=\"2\">Benefits and challenges of comparative advantage<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n<div class=\"single-cta\">\n\t<a\n\t\tclass=\"button button--primary gate-46d869e5-f36b-4b06-8a2c-0ee65a10435b\"\n\t\trole=\"button\"\n\t\tdata-button-location=\"content_area\"\n\t\thref=\"#gate-46d869e5-f36b-4b06-8a2c-0ee65a10435b\"\n\t>Download your free small business toolkit with checklists and templates to manage your accounting, payroll and HR business admin with ease<\/a>\n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-comparative-advantage\">What is a comparative advantage?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">To understand the economic theory of comparative advantage (or CA as we&#8217;ll call it for short), it&#8217;s equally important to understand its sister concept, opportunity cost.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Opportunity cost is the potential benefit your business misses out on when it chooses one option instead of another.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The rule of thumb is: the company with the lower opportunity cost has a CA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Putting this all together, CA refers to your company&#8217;s ability to produce goods or services at a lower opportunity cost than another company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-to-calculate-comparative-advantage\">How to calculate comparative advantage<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Consider 2 small businesses: Kathy&#8217;s Coffee and Patsy&#8217;s Pastries.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both shops have coffee and pastry-making capabilities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kathy&#8217;s Coffee can produce 200 cups of coffee or 80 pastries a day whereas Patsy&#8217;s Pastries can produce 150 cups of coffee or 75 pastries in the same timeframe.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>For Kathy&#8217;s Coffee, the formula for calculating the opportunity cost of producing: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1 cup of coffee is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>80 pastries \/ 200 cups of coffee = 0.4 pastries <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1 pastry is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>200 cups of coffee \/ 80 pastries = 2.5 cups of coffee <\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>For Patsy&#8217;s Pastries, the formula for working out the opportunity cost of producing: <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1 cup of coffee is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>75 pastries \/ 150 cups of coffee = 0.5 pastries <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1 pastry is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>150 cups of coffee \/ 75 pastries = 2 cups of coffee <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kathy&#8217;s Coffee has a CA in producing coffee because its opportunity cost (0.4 pastries) is lower than Patsy&#8217;s Pastries (0.5 pastries).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the other hand, Patsy&#8217;s Pastries has a CA in producing pastries because its opportunity cost (2 cups of coffee) is lower than Kathy&#8217;s Coffee (2.5 cups of coffee).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If Kathy&#8217;s Coffee specialises in producing coffee and Patsy&#8217;s Pastries specialises in producing pastries, they can potentially become trade partners: trading coffee for pastries and vice versa.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When Kathy&#8217;s Coffee and Patsy&#8217;s Pastries trade together based on their CAs, they can operate more efficiently and profitably than if they produced both products individually.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-absolute-advantage-and-competitive-advantage\">What are absolute advantage and competitive advantage?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">CA shouldn&#8217;t be confused with absolute advantage, which is your company&#8217;s ability to produce goods or services more efficiently than another company.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This means your business can deliver the same amount of goods using less resources or, alternatively, it can produce more goods with the same resources.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, if Adam&#8217;s Autos can produce 10 cars using the same amount of resources that Brian&#8217;s Bangers uses to produce 5 cars, Adam&#8217;s Autos has an absolute advantage in car production.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">CA should also be contrasted with <a href=\"https:\/\/www.sage.com\/en-ie\/blog\/develop-accountancy-practice-competitive-advantage\/\" target=\"_blank\" rel=\"noopener noreferrer\">competitive advantage<\/a>, which is when your business has the capacity to produce goods or services that are of better value to consumers than another business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It&#8217;s a bit more challenging and time-consuming to secure a competitive advantage than it is a CA.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is because your business can only really gain a competitive advantage by conducting extensive market research in order to find out what other businesses are doing and how they&#8217;re doing it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are 3 main ways your company can gain a competitive advantage:<\/p>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Produce superior goods or services<br><\/li>\n\n\n\n<li>Offer the lowest-priced goods or services<br><\/li>\n\n\n\n<li>Deliver goods or services for a niche market<br><\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-benefits-and-challenges-of-comparative-advantage\">Benefits and challenges of comparative advantage<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">CA can benefit small businesses in several ways:<\/p>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li><strong>Produces higher quality products or services<\/strong>. When your business plays to its strengths, it can often produce better quality products or services. The byproduct of this is a stronger business reputation, which can draw in more customers.<br><\/li>\n\n\n\n<li><strong>Increases efficiency<\/strong>. Similarly, when your business specialises in producing certain goods or services\u2014rather than being a &#8220;Jack (or Jill) of all trades&#8221;\u2014it often uses its time, money, and labour more effectively, which leads to higher levels of productivity.<br><\/li>\n\n\n\n<li><strong>Reduces costs<\/strong>. When you focus your business on producing goods or services where it has a CA, this can reduce its production costs. This may, in turn, result in a win-win situation\u2014lower prices for your customers and higher <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/glossary\/what-is-a-margin\/\" target=\"_blank\" rel=\"noopener noreferrer\">profit margins<\/a> for your business.<br><\/li>\n\n\n\n<li><strong>Spurs innovation<\/strong>. Product or service specialisation can lead you to invest in improving the main drivers of your business offering. This <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/glossary\/what-is-innovation\/\" target=\"_blank\" rel=\"noopener noreferrer\">innovation<\/a> can lead to an uptick in new and improved goods or services.<br><\/li>\n\n\n\n<li><strong>Expands trade opportunities<\/strong>. CA prompts trade between businesses, giving your business access to a broader range of products or services than it could produce alone.<br><\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">On the flip side, CA has a number of drawbacks for small businesses, primarily the potential for over-dependence on other businesses for complementary goods or services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If, for example, one of your trading partners experiences <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/supply-chain-disruption-manufacturers-get-ahead\/\" target=\"_blank\" rel=\"noopener noreferrer\">supply chain disruption<\/a> or quality control issues, their problems can quickly become your problems, which adversely affect your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another challenge of CA is that it can increase competition.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By choosing to specialise, your business may face stiff competition from larger businesses that can typically produce goods or services at a significantly lower cost due to economies of scale.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Economies of scale are cost savings that are derived when your business increases its production volume and becomes more efficient, resulting in a lower cost per unit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, when your business buys goods in large quantities (buying in bulk), suppliers often offer discounts, which reduce the cost of the goods per unit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">When your business produces specialist goods or services at a lower opportunity cost and gains a CA, it can capitalise on its strengths by forming effective, mutually beneficial trade partnerships.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This can lead to better products or services, lower prices, stronger sales margins and ultimately, increased profitability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">CA has its risks, too, but your business can minimise them by, for example, building robust relationships with multiple trade partners and diversifying its product or service offerings.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The good news is, your business doesn&#8217;t need an unfair advantage to get ahead. CA will do.<\/p>\n\n\n \n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Get your free small business toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p>Need help with accounting, payroll and HR admin for your business? This toolkit comprises free templates and checklists to help you manage your key business admin tasks with ease.<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-46d869e5-f36b-4b06-8a2c-0ee65a10435b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download the toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1261586981-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1261586981-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/tag\/business-costs\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tBusiness costs\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/tag\/business-finances\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tBusiness finances\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-32877 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-trends-insights tag-business-costs tag-business-finances tag-retail business_type-small-business industry-ecommerce card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/AdobeStock_2160430536-1440x810.jpg\" class=\"card-post__image\" alt=\"Is Black Friday worth it for my small retail business?\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/AdobeStock_2160430536-684x384.jpg 684w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/AdobeStock_2160430536-768x432.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/AdobeStock_2160430536-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-11-05T10:07:21+00:00\">5 November, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">13 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/black-friday-2026\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tIs Black Friday 2026 actually worth it for my small retail business?\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tBlack Friday might only be feasible if your margin, stock, and capacity can take the strain. Here&#8217;s the five-question test to find out for your retail business.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-32860 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-trends-insights tag-business-costs tag-ecommerce tag-inventory tag-retail business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/black-friday-discounting-worked-examples\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/online-seller-684x384.jpg\" class=\"card-post__image\" alt=\"How much can I afford to discount on Black Friday?\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/online-seller-684x384.jpg 684w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/online-seller-768x432.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/11\/online-seller-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-11-04T14:38:32+00:00\">4 November, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">13 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tHow much can I afford to discount on Black Friday 2026? (Worked examples included)\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-32783 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-bookkeeping tag-business-finances tag-cash-flow tag-freelancers tag-tax business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/allowable-expenses-for-creative-freelancers-what-can-you-claim\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/12\/AdobeStock_2236210925-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/12\/AdobeStock_2236210925-684x384.jpg 684w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/12\/AdobeStock_2236210925-768x432.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/12\/AdobeStock_2236210925-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-11-03T17:04:56+00:00\">3 November, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tAllowable expenses for creative freelancers: What can you claim?\u00a0\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-32789 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-bookkeeping tag-business-costs tag-business-finances tag-freelancers tag-tax business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/freelancer-tax-amount\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/AdobeStock_2059781250-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/AdobeStock_2059781250-684x384.jpg 684w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/AdobeStock_2059781250-768x432.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/AdobeStock_2059781250-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-11-03T17:03:50+00:00\">3 November, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tHow much should a freelancer put aside for tax?\u00a0\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-32716 post type-post status-publish format-standard has-post-thumbnail hentry category-strategy-legal-operations tag-bookkeeping tag-business-costs tag-business-finances tag-business-performance tag-business-support tag-freelancers tag-payments tag-work-life-balance business_type-small-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-gb\/blog\/client-invoice-payment-creative-freelancers\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/doubtful-friend-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/doubtful-friend-684x384.jpg 684w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/doubtful-friend-768x432.jpg 768w, https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/10\/doubtful-friend-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-11-02T14:28:00+00:00\">2 November, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">8 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tYour client still hasn\u2019t paid your freelance invoice. Now what?\u00a0\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Comparative advantage can help your small business get ahead \u2014 not by being the best, but by knowing what it does best.<\/p>\n","protected":false},"author":1766,"featured_media":19677,"menu_order":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_is_cornerstone":"","_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_opengraph-image":"","_yoast_wpseo_opengraph-image-id":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_yoast_wpseo_twitter-image":"","_yoast_wpseo_twitter-image-id":"","_yoast_wpseo_schema_page_type":"","_yoast_wpseo_schema_article_type":"","_sage_video":false,"_yoast_wpseo_focuskeywords":"[]","_yoast_wpseo_keywordsynonyms":"[\"\"]","_yoast_wpseo_primary_category":"6","sage_membership_post_content_type":"article","sage_membership_post_featured_video_id":"","sage_membership_post_video_type":"trailer","sage_membership_post_featured_video_duration":"","post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[6,9],"tags":[197,135],"business_type":[4],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[109],"coauthors":[402],"class_list":["post-19671","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","category-strategy-legal-operations","tag-business-costs","tag-business-finances","business_type-small-business"],"sage_meta":{"region":"en-gb","author_name":"Kieron Johnson","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2024\/09\/Bakery-owners-calculating-comparative-advantage.jpg","imagine_tags":{"109":"Small business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice UK","distributor_original_site_url":"https:\/\/www.sage.com\/en-gb\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/19671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/users\/1766"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/comments?post=19671"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/19671\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media\/19677"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media?parent=19671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/categories?post=19671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/tags?post=19671"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/business_type?post=19671"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/lilypad?post=19671"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/context?post=19671"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/industry?post=19671"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/persona?post=19671"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/imagine_tag?post=19671"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/coauthors?post=19671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}