
I know it is not very popular in England but in Norden Europe (where I come from) most breeders are such small scale breeders you describe and dare I say many top dogs come from these countries such as Sweden, Finland and Norway.
The way they do it is use breeding terms agreements or loan back dogs they have bred(not so common).
Many people I know have an ownership of +10 dogs that do not live with them. Some will be used for breeding by themselves, some not but they have a choice of dogs and can be picky of what they continue with. Many people will also import and place these puppies in breeding terms families so it is not just used to place your own lines/puppies but other lines they might wish to incorporate with their lines later or even see as could benefit the breeding base in the country(which of course indirectly benefits them as well in the future).
In UK it is not a practice used a lot and many people have a very negative attitude towards it but in my opinion it is the way to go to give breeders larger selections of dogs (like breeders with large kennels would have had in the past). Over the years I have seen it working out more often than not.
Saying that, I have heard of some breeding terms agreements made here that to me sound very unfair and I would not be surprised the family receiving the dog feeling "done in" by the breeder at later date, which of course does not create the relationship people in such partnership should have!
The kennel clubs in these Nordic countries where it is pretty common practice support it and provide set forms for breeding terms puppies and breeders are told to use these forms (and host families to demand the forms to be used) as what is required of each party has been set to be as is seen "fair for both parties".
Just as an example my older girl who comes from Finland, the breeder does not even keep any bitches at home, the mother was out on breeding terms.
Out of the litter (10 pups) 4 puppies went out on breeding terms again so the breeder has a choice of continuing with what they deemed best dogs to continue with. As it has worked out, they have not yet used any of the puppies they kept ownership of but are getting a pup from my girl to "keep the line" - The said puppy is also going out on breeding terms, not residing with my dogs breeder. However she did check I am happy with the home she will be placing the boy in as well as I will of course have a lot of contact with them too. It is all very much based on mutual trust&respect as well as contracts set by the kennel club.
You could place a boy on breeding terms and if he turns out great I'm sure there will be a litter you can have a girl back or you might in the future have a bitch that would go with the boy. Of course if the boy does not turn out what you hoped for, the host family will have a wonderful pet and you will not be "stuck" with a boy that is no use for you in working your lines forwards.