May 7, 2010
Does Small Business Have A Future?
Does Small Business Have A Future? Cliff Ennico www.creators.com "A local Mom and Pop supermarket recently lost their lease to a nationwide pharmacy chain. Driving around town I#146;m seeing small businesses fold up shop left and right and big national chains moving in. I#146;m also reading that big company Websites are using their search engine advertising dollars to push smaller competitors off the critical #145;first page#146; of search results. I wanted to start a business, but I admit I#146;m a little depressed. Does small business have a future in this country?" The answer depends to a large extent on how you define a "small business". If you#146;re thinking of the traditional model - a "brick and mortar" retail or service business run by a family - you probably will see less and less of that as time goes by. The causes are many: skyrocketing real estate costs and property taxes in many parts of the country that are driving storefront and office rents dramatically upward, increasing costs of living and a shortage of trained, qualified employees that are driving salaries and payroll taxes through the roof; a legal system in which "anyone can sue anybody for anything", and often does; the advent of the Internet, where with a few clicks of a computer mouse you can find out exactly where you can find the best deals and lowest prices for just about anything; and perhaps most damaging, a consuming public that wants low prices and convenience above everything else, and doesn#146;t value the better service small businesses have traditionally provided to justify their (often) higher prices. But the death knell of small business should not be sounded quite yet. In many ways, this is one of the best times in history to be running your own business. If you think my vision is too rosy, take at look at the "Future of Small Business" survey Intuit Corp. just released (they#146;re the folks who produce the "Quicken" and "QuickBooks" accounting software products). It#146;s available on the Web at www.intuit.com/futureofsmallbusiness .I won#146;t summarize the Intuit report here, because it really deserves to be read in depth. But since you asked (you did, didn#146;t you?), here is my own "crystal ball gaze" at where the small business world is going to be in 10 years#146; time, and a look at some macro-trends that probably will drive most Americans alive today into some sort of entrepreneurial career at some point during their lifetimes. The Demise of the Behemoth Corporation . Back in the 1970s, if you ran a billion dollar (in sales) corporation, you needed thousands of managers running the systems that made those businesses happen. Today, with the right information technology and strategic alliances, you can run a billion dollar corporation with fewer than 100 full-time employees. Look for tomorrow#146;s businesses to be much smaller, leaner and more entrepreneurial. The Growth of Franchises and Chain Stores . Most people, when asked, say they support small businesses. But their actions show they are not willing to pay higher prices to support them. Consumers today are time-starved, and they want convenience, low prices, and one-stop shopping over just about anything else. That favors chain stores and franchises over their standalone, Mom and Pop competition. There#146;s a franchise today for just about every retail and service business you can imagine. Why are Mom and Pop operators being "assimilated by the Borg", buying franchises and managing chain store outlets? Because franchises and chain stores can pool their resources to advertise nationally, build brand recognition, negotiate rock-bottom prices for equipment and supplies, carry huge inventories (so customers can have immediate gratification of their desires and buy more stuff), and compete head to head with the big guys. Look for "brick and mortar" retail, especially, to be dominated by national brands in 10 years#146; time. The Internet Retail Explosion . Mom and Pop retail will survive, but it will be going online and working out of the house, because there#146;s little or no overhead. There are millions of small Web retailers offering just about every product and service you can imagine. Yes, big company Websites are using their search engine dollars to muscle out the little guys (hence the current debate in Congress about ensuring a "level playing field" on the Web), but "retail aggregators" such as eBay, Yahoo! and Amazon offer marketing programs that give members of their communities the wherewithal to compete online. Have you ever searched for something online and found an eBay listing or a Yahoo! Store on the first page of your search results? Enough said. "Marketainment": The Key to Small Business Success . Three books that should be read by every wannabe entrepreneur have nothing to do with business per se: they are "Amusing Ourselves to Death" by Neil and Andrew Postman (Penguin, $14.00), "Rejuvenile" by Christopher Noxon (Crown, $23.95), and "Life: The Movie" by Neal Gabler (Vintage Books, $14.95). Their point is a simple one: consumers who have been saturated with media since early childhood expect elements of entertainment, drama and "fun" in everything they do. Forget about providing your customers with great service - they won#146;t reward you. Give them a terrific show, and they#146;ll come back again and again. nbsp;nbsp;nbsp;nbsp;nbsp;Cliff Ennico ( cennico@legalcareer.com is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest books are 'Small Business Survival Guide' (Adams Media, $12.95) and 'The eBay Seller's Tax and Legal Answer Book' (AMACOM, $19.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2007 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com.

Posted by Staff at 1:49 AM