The two major components of value are price and quality. It is easy to mass-produce cheap, low quality goods with little value; what is difficult is to keep the price down while mass-producing high quality products. This is the in for small business: since mass-production loses some of its advantages with rising quality, the small business must create value by offering quality products at lower prices than the mass producer can. The small business advantage can be increased if the products in question are complex and if they can be customized.
To see why such products can be offered with greater value by small business than by large companies, we only have to examine how quality is ensured in products. The standard way of ensuring product quality is to apply quality assurance principles, the best-known examples of which are contained in the ISO 9000 standards. A description is found here. This is useful reading for small businesses because it demonstrates how relatively easy it is to apply these principles in small production units and how the costs and the resources required escalate rapidly with the size of the company and the number of production units and production steps.
So, to be successful, a small business has to offer a good value in high quality products - not bad as a partial basis for a business model.
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