I've blogged on this subject before, but Seth Godin, marketing guru, explains it beautifully in his blog, excerpted below:
Small means the founder makes a far greater percentage of the customer interactions. Small means the founder is close to the decisions that matter and can make them, quickly.
Small is the new big because small gives you the flexibility to change the business model when your competition changes theirs.
Small means you can tell the truth on your blog.
Small means that you can answer email from your customers.
Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable and tell stories to people who want to hear them.
A small law firm or accounting firm or ad agency is succeeding because they’re good, not because they’re big. So smart small companies are happy to hire them.
With today's technology, the independent, small shop is more viable than ever before. Something else? A small company appreciates every bit of business. Every Last Little Bit.