The small establishments engaged in trade, commerce, manufacturing and service activities constitute a crucial segment of an urban economy from the viewpoint of their magnitude, essentiality of absorbing large mass of job seekers. The present study focuses on the growth of these establishments, characteristics of their entrepreneurs and workers, employment and living conditions of the latter and the likely trends in the employment market, in the Bombay city. It is found that the employment in the small sector has increased much faster than in the large sector during the past; that most of the entrepreneurs are urban based, educated and have risen from the ranks of employees. The workers are predominantly migrants, but committed to the city and most of them are content with their jobs. They do not seem to have severely affected by the housing problem as large number of them can live at the place of work. This, however, prevents them from having their families with them. The employment conditions in the small sector suit the migrant workers and the expectations of growth in this sector are likely to attract more 'induced' migrants than the city can absorb. The unemployment rate in Bombay is, therefore, likely to rise unless the large scale activity substantially expands in the suburbs and induced migratory is brought down by better organization and dissemination of labor market information. A comprehensive labor market information scheme seems necessary both for reducing the imbalances and preventing large labor surpluses in the city.