DEFINITION of 'Ma And Pa Shop'

Ma and pa shop is a colloquial term for a small, independent, family-owned business. It is also called a mom and pop shop. Unlike franchises and large corporations, which have multiple operations in various locations, ma and pa shops usually have a single location that often occupies a physically small space. The staff is usually smaller and may consist of a few elder family members and some children. This is in contrast to a franchise or corporate model where there is a large home office with operational support for things like accounting, marketing and legal. The "shop" could be any type of business, from an auto repair shop, to a bookstore or a restaurant.

BREAKING DOWN 'Ma And Pa Shop'

Ma and pa shops may have difficulty competing with larger businesses. They cannot take advantage of the same economies of scale, so their prices are often higher. Ma and pa shops are able to stay competitive when they differentiate themselves from their large-scale competitors by offering a unique product, exceptional service or a more personalized feel. Ma and pa shops in certain industries may face an uphill battle from the onset depending upon the saturation of the market they're entering or the complexity of the particular industry. Some ma and pa shops open as a side-business, a hobby or because of a lifelong dream.

For example, some ma and pa restaurants that are opened don't survive very long because of the complexity of running a restaurant's operations. People who have never been in the industry before may have a dream to open a successful restaurant, but without insider knowledge of how to run or manage a restaurant, it is hard to be successful and many fail. On the other hand, something like a hardware shop or small scale bakery that has a less complex model with fewer moving parts may be easier to run for inexperienced business owners.

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