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

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.