Project title: Does the invisible ceiling created by financial, human resource, and operational barriers prevent microbusinesses in developed economies from scaling beyond 10 employees?

Abstract

Micro-businesses, defined as enterprises employing fewer than 10 people, represent the backbone of many economies worldwide, accounting for approximately 95% of all businesses in developed nations. Despite their numerical dominance and collective economic contribution, these enterprises face significant challenges in scaling beyond their initial size, creating what this dissertation terms an “invisible ceiling” that prevents growth and expansion. This research investigates the multifaceted barriers that prevent micro-businesses from scaling, utilizing secondary research methodology including analysis of academic literature, industry reports, and government datasets. Through examination of case studies and comprehensive data analysis, this study identifies five primary barrier categories: financial constraints, human resource challenges, operational inefficiencies, market limitations, and owner-related factors. Key findings reveal that financial barriers, particularly limited access to capital and cash flow constraints, represent the most significant obstacle to scaling. Additionally, the interconnected nature of these barriers creates a compounding effect, where addressing one challenge often reveals or exacerbates others. The research concludes with strategic recommendations for micro-business owners, policymakers, and support organizations to overcome these scaling challenges and unlock the economic potential of micro-enterprises.