A very large question, rendered meaningless because of the scope. Why? What a business is is not defined (and the definition is not simple). What effective means is not defined. What strategies are is not defined. There has been no context provided within which pros and cons can be evaluated. All of these topics have a literature devoted to them, within economics, finance, sociology, and management theory (and, of course, the fluff in the associated popular fields). One little example, there's a great little book called, "Permanently Failing Organizations" which teases out a bunch of the more interesting themes form sociology and economics.
Which ever definitions are adopted will largely determine the conclusions drawn. For example, If I take a strict, classical economic view, business (the firm) is defined as a profit seeking entity (which then defines 'effectiveness' as profit maximisation). One can critique that within economics (looking at satisficing/bounded rationality, behavioural economic, or transaction costs, for example). One can also critique it from a sociological perspective ("economic man" is so seriously flawed that it tells us nothing). And so on. The definitions matter.
This is a characteristic of most economies, regardless of structure. It's a statistic that's often trumpeted about, but very rarely understood. At a macro-economic level, industries generally tend towards oligopoly: a small number of large competitors. There are good reasons for this which I'm not going to dig too far in to, but they basically result from tensions between advantages from size and advantages from competition. There are very solid structural and institutional determinants of the industry profile. But you can't have a lot of large businesses or as many medium sized business as you do small businesses because the economy just isn't that large.
The fact that a lot of small businesses fail is also neither as bad as it sounds nor as quite what it seems. The usual number is between 80% and 90% of business fail within their first two years. But this number includes a huge number of cases where:
- formed companies are intentionally temporary (eg joint ventures)
- purchases, mergers, acquisitions, and structural reoganisation (often causing a successful business to appear to fail)
- shell companies (for various reasons)
- various forms of tax dodges (legal and otherwise)
- operating subsidiaries of larger companies
Of the 'genuine' small businesses, you have a bunch of major types, for example:
- The (wishful) start of something big
- The (hopefully) profitable hobby
- Self-employed, but still contracting to the corporate world
- Service/business professionals (doctors, lawyers, etc)
- The ma and pa business (eg corner dairy)
- The passion business (someone who has a genuine idea that they think is so cool and want to take it to the world!!)
The vast majority of small businesses are not in any valid sense 'little guy'. The successes and failures of most small businesses are not something that has any major ramifications for said small person.
Not even slightly strange. The vast majority of all businesses are founded within families (or using family names) and this was even more true 50 years ago. So naturally, most businesses that survive today from 50 years ago were family businesses. Some of them still are. It's not a particularly enlightening piece of information.
Whoever led you to believe that was a fool: very few who practices or studies business and management seriously subscribes to that view; and most of those few are in trouble very quickly. Organisations, of which business is a sub-class, all operate within a complex environment that places competing, often conflicting, demands upon the organisation. In business organisations, the economic demands are privileged (the bottom line does matter), but they do not have exclusive influence (other things matter too).
Such sweeping questions cannot be meaningfully answered. Given your agenda, there's no real point in answering them.
To summarise:
- None of the relevant terms are unambiguous and the definition adopted will determine the conclusions.
- The various "facts" cited are either misleading or unsurprising. They could be (mis)used to sustain a variety of conclusions, depending on the bias of the concluder.
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