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Examples for Businesses and Investors

What Is a Mom-and-Pop Establishment?

“Mom-and-pop” is a colloquial term used to describe a small, family-owned, or independent business.1 Mom-and-pop stores are often operations that struggle to compete with more substantial establishments, such as big-box retailers, which generally boast more buying power than smaller players. In the last few years “shop local” and “shop small” have been used as slogans in marketing campaigns to support these smaller establishments.23 The term “mom-and-pop” can also refer to inexperienced investors who casually play the market.4


  • The popularity of mom-and-pop stores is on the rise, thanks in part to shoppers seeking boutique services or products.
  • Traditional mom-and-pop businesses, such as bookstores and pharmacies, have found it financially difficult to compete with large chain stores and online behemoths like Amazon.
  • Mom-and-pop businesses benefit from local consumers who choose to pump their money into their communities to promote local economic growth.

Understanding Mom-and-Pop Entities

Mom-and-pop stores historically were local family-owned-and-operated general stores or drugstores. Today, mom-and-pop establishments are synonymous with various different types of businesses, including restaurants, bookstores, automotive repair shops, and insurance agencies.

In many ways mom-and-pop businesses stand at a steep disadvantage to large corporations, e-commerce companies, technology platforms, and franchise businesses, which enjoy bigger economies of scale, greater access to capital for investments, larger advertising budgets, higher brand awareness, and greater access to talent pools for hiring. This collectively gives larger players a an edge over mom-and-pop businesses, which frequently lose ground and find themselves driven out of business when forced to compete.

Fortunately, there are signs of hope for mom-and-pop stores. More than ever before, consumers are demanding more-personalized products and services. When shoppers ask, “Where can I find a mom-and-pop shop near me?,” they don’t need to look any further than the internet. Small businesses can expand their target audience and broaden their geographical reach through the use of e-commerce and social media.5

Mom-and-pop shops also benefit from a phenomenon known as “Small Business Saturday,” which was founded by American Express in 2010 and is cosponsored by the U.S. Small Business Administration (SBA). The idea was to encourage shopping locally on the Saturday following Thanksgiving, and it appears to have worked. U.S. consumers spent an estimated $17.9 billion at independent retailers and restaurants on Small Business Saturday in 2022.6

This shopping holiday was established in response to Black Friday, when large retailers offer enticing discounts to consumers on the day after Thanksgiving. Mom-and-pop business owners tend to have a vested interest in the community, its citizens, and the local economy. Consequently, they offer highly interactive and personalized services that large corporations cannot replicate. For this reason mom-and-pop stores often win increased brand loyalty among consumers.

Mom-and-pop drugstores are typically owned and operated by the same family for generations, where the druggist or pharmacist would also be the proprietor of the store.

Mom-and-Pop Investors vs. Mom-and-Pop Establishments

“Mom-and-pop” is also used to refer to inexperienced investors who minimally invest in the stock market. Despite limited capital commitments, mom-and-pop investors often count on significant returns on their trades in order to supplement their income.

However, many mom-and-pop investors are unfamiliar with market research and so react impulsively to market changes and fluctuations. They rashly dump their positions rather than riding out rough patches. Some mom-and-pop investors combat their inexperience by hiring brokers to facilitate trades or using one of the many online trading platforms to place their investments.

National Mom and Pop Business Owners Day is March 29.7 The holiday was founded by Rick and Margie Segel in 1939 as a way to honor the hat shop started by their parents that year.8

What Is a Mom-and-Pop Store?

A mom-and-pop store is a small, often family-owned-and-operated business that maximizes its profits by providing personalized, interactive services for its customers, curating its inventory to fit a local need. Examples include bookstores, grocery stores, delicatessens, bakeries, restaurants, auto repair shops, insurance agencies, gift shops, ice cream emporiums, butcher shops, clothing boutiques, drug stores, card shops, and more.

What Does It Cost to Open a Mom-and-Pop Store?

There is no one set cost to open a mom-and-pop store. However, the online management platform BlueCart says that it takes somewhere between $25,000 and $50,000 to open a small mom-and-pop grocery store.9

How Many Mom-and-Pop Stores Are There in the U.S.?

According to the U.S. Census Bureau, there were 7,936,977 small business establishments in the United States in 2019, with a small business establishment being defined as one that employs fewer than 500 people and operates at a single location.10

The Bottom Line

Small businesses are an important part of the U.S. economy, and mom-and-pop stores are a bedrock subset of them. They inspire brand loyalty and, if successful, develop a devoted local clientele. When the term is applied to financial investors, it means people with limited knowledge of the stock market who nevertheless invest in small amounts as a way to boost their income.

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