Learn Spanish (Latin America): La compañía es pequeña pero buena.

We use pero to add a contrasting idea (it is good despite being small). You only use sino when the first part of the sentence is negative and the second part replaces or corrects it, like saying "It isn't small, but rather big" (No es pequeña sino grande).

Is there a difference between compañía and empresa?

In the context of business, they both mean "company" and are mostly interchangeable. Empresa is slightly more common in everyday business Spanish, while compañía can also mean "company" in the sense of companionship.

Why does the sentence use es instead of está for "is"?

We use es (from the verb ser) because being small and good are seen as core, defining traits of this business. If we were talking about a temporary state, like the company being closed for the day, we would use está (estar).

How could we use a cause connector like ya que with this sentence?

You could use ya que (since/because) to add a reason why the company is good. For example: La compañía es pequeña pero buena, ya que cuida a sus empleados (The company is small but good, since it takes care of its employees).