Distinguishing micro-businesses from SMEs: a systematic review of growth constraints

Abstract

Purpose

Micro-businesses account for a large majority of small and medium enterprises (SMEs). However, they remain comparatively under-researched. The purpose of this paper is to take stock of the extant literature on growth challenges and to distinguish growth constraints facing micro-businesses as a specific subset of SMEs from those facing larger SMEs.

Design/methodology/approach

The study consists of a systematic review of 59 peer-reviewed articles on SME growth.

Findings

Micro-businesses distinguish themselves from larger SMEs by being owner-manager entrepreneur (OME) centric and are constrained by a tendency to be growth-averse, underdeveloped capabilities in key business areas, underdeveloped OME capabilities, and often inadequate business support provision.

Research limitations/implications

The use of keywords, search strings, and specific databases may have limited the number of papers identified as relevant by the review. However, the findings are valuable for understanding micro-businesses as a subset of SMEs, providing directions for future research and generating implications for policy to support the scaling up of micro-businesses.

Originality/value

The review provides a renewed foundation for academic analysis of micro-business growth, highlighting how micro-businesses are distinct from larger SMEs. At present, no literature review on this topic has previously been published and the study develops a number of theoretical and policy implications.

Citation

Gherhes, C., Williams, N., Vorley, T. and Vasconcelos, A.C. (2016), "Distinguishing micro-businesses from SMEs: a systematic review of growth constraints", Journal of Small Business and Enterprise Development, Vol. 23 No. 4, pp. 939-963. https://doi.org/10.1108/JSBED-05-2016-0075