Large or small, they are personal choices we make for ourselves.
For every good point you can make for either position their is also a negative one for that position.
We've been both small and large (large for out market size) and there have been benefits to both as well as negatives.
Small Positives- You work when you want, no or low overhead, you pocket the majority of the money. No hassles with employees, large insurance premiums, paying a bunch in taxes. No one tells you what to do and you don't have to tell anyone what they need to do.
Negatives- Little motivating pressure, if you not a self starter you can wither away. You wear all the hats, from booking, cleaning and billing. You get sick or hurt, you're SOL, until you get better. Health insurance, retirement and are all on yourself, so you must be a good manager.
You are generally not going to be able to sell your business for what it's worth to you.
Large Positives- You don't have to be there everyday to generate income, larger sales equal larger profits. You're building equity in a sell-able entity.
Large Negatives-Employees management, HR hassles, large insurance premiums, paying a bunch in taxes. Liability exposure, because you're bigger you are a target and have risks that small does not have.
I don't think either of you are wrong, it can be done well either way, it's a personal decision which route you chose.