Properly-regulated capitalism can be good for small businesses, certainly (and also for their employees) - I am quite fond of Germany’s social market economy.

I call the dominant form of libertarianism “right-libertarian” since there is a historical left libertarianism (a.k.a. anarchism, but that term has too many other connotations these days). As you pointed out it leads to really nasty labor conditions – but it’s also not great at preserving competitive markets either, especially in market sectors conducive to natural monopolies (e.g. look at broadband Internet access in the US, or social media).