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"The inequity of it is, giant organizations in my opinion are clumsy, inefficient, dysfunctional. But they can survive in part just by sheer inertia. On the other side, small businesses have an immense potential advantage. They know what they do without having a committee or a consultant write a mission statement. They've got their focus, their flexibility, their desire and drive."

Stanley Rhodes, 57
Consultant, Linden Travel Bureau Inc., New York City
Status: Independent contractor who works for an umbrella travel agency in an industry marked by both consolidation and Internet-based start-up activity

"To compete in the marketplace, we have to have the numbers and the dollar volume and the revenues to be important to our suppliers.

"Linden is probably one of the larger of the privately owned agencies in New York City. My four-person office is one of many, many independent contractors who work by commission under the umbrella of Linden. On my own, perhaps my volume might only be $3 million to $4 million a year, which is not small potatoes, but it really doesn't make me important to any particular airline. But as part of a company that does many millions of dollars of business, I benefit from it. And so there are many other little teams of twos and threes and fours that work here under Linden, not as salaried travel agents but as independent contractors. We can do the old-time-boutique luxury business, but we can stay alive by being part of a bigger team."

Thomas Lynch, 52
President: Lynch & Sons Funeral Directors, Milford, Mich.
Author, The Undertaking: Life Studies from the Dismal Trade and Bodies in Motion and at Rest: On Metaphor and Mortality
Revenues: Just under $1 million
Status: Independent funeral home in an industry that has undergone rapid consolidation in recent years but whose biggest players are now faltering

"What Service Corp. International (SCI) and the Loewen Group and Stewart Enterprises, who have rolled up hundreds of independent funeral homes, have proved is that they have the ability to acquire rooftops. What does not follow is the ability to operate them. All funerals are local, like politics. What was basically lost in their model of funerals is accountability. In our line of work, because you only die once, accountability is the single most important asset we can offer to the community. Bob Waltrip, CEO of SCI , can buy the name on the sign, but he can't buy trust.

"The mergers-and-acquisitions frenzy of the '80s and '90s did not take into account the fact that we are an unexpanding market. That this model has failed ought not to be a surprise, because Wall Street's great affection for the so-called death-care industry was based on demographics. 'Everyone's going to die!' Like that's news. What they failed to add was 'once.'

All funerals are local, like politics.

"Eighty-five percent of the market is in funeral homes like ours, doing 160 to 200 funerals a year, which rely on the townspeople calling. That size seems to work. The sign in front of the house says Lynch. If we're not doing our job properly, they can complain by name. That means I have a vested interest in doing the job properly. That's not because of good morals; that's good business. I rely on my customers' trust. If I'm part of McFuneral Inc., it's not the family across the table that I'm taking care of, it's the stockholders.

"Yes, we want our business to grow. I wouldn't mind acquiring other funeral homes. I have children who may go into funeral service. There are three Lynch & Sons in Oakland County. [The others are owned independently by Lynch's two brothers.] We won't acquire more funeral homes until we have family members who have something at stake by having their name on the sign.

"Size does matter, and it seems that you can get too big. I think that's what happened to Stewart Enterprises and the Loewen Group and SCI, but don't trust me. Look at the newspapers. Look at your portfolio."

Emily Barker is a senior staff writer at Inc.

Please e-mail your comments to editors@inc.com.

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