SMBs often hire from their close circles, such as relatives and friends (in addition to having family members work in the business). They may also bring in workers from their native towns or villages where they have strong social connections. This approach helps bridge trust gaps that come with unfamiliar/unmonitored workers. It
In many sectors, SMB owners play a hands-on role in daily operations, allowing them to maintain tight control. However, as these businesses scale, they often face principal-agent problems, leading to potential moral hazards. Some examples In the absence of the owner, salon employees might underreport foot traffic, affecting collections. Bar owners regularly
In certain sectors, SMBs have the advantage of navigating local regulations more easily, which can put larger, organized players at a disadvantage. Wholesale markets often operate in cramped, unsafe buildings, avoiding the higher costs associated with adhering to safety norms. Street vendors and small footpath shops typically avoid rental expenses, although they
A common startup pitch revolves around consolidating fragmented industries dominated by SMBs. The idea? Leverage economies of scale to grow faster and more profitably than standalone small businesses. While this strategy has seen success in sectors like medical labs, it’s been less effective in others, such as groceries, fashion retail, farming, and
