When we take a look at the national economy, we see that it’s doing just fine. We tend to not think about small business. “The labor market is strong. Earnings are beating expectations.” Last month alone, jobs went up by 224,000 and unemployment rates unexpectedly rose to 3.7 percent. We don’t have to worry anymore about the impending doom of a recession. Great, so the economy’s booming.
Not so fast. Booming means that there is “the expansion and peak phases of the business cycle. It’s also known as an upswing, upturn, and a growth period.” During this period, key economic measures will rise. “Booming” means better productivity, in which workers are producing goods and completing services a lot faster than usual. It means that sales and profits are higher there is wage increase. Essentially, when more money comes in, people get paid more.
So on a national scale, yes, it makes sense that unemployment is low. But why aren’t we celebrating? Why does this growth somehow feel meaningless? Why does it still feel as though the ground is still shifting beneath our feet? Because when we say that the economy is “booming”, we fail to ask who exactly is the economy “booming” for. The answer is plain and simple: because the economy does not benefit working-class Americans.
In this week’s blog series, we explore the real driving force behind the financial system. This week, we revisit a story we know all too well; the small versus the big, the weak versus the strong. We break down sustainability and the challenges that confront small enterprises. In addition, we discuss how small businesses can scale in a market landscape that is constantly shifting.
Bigger Is Not Always Better
When we see 3.7 percent in unemployment, we think that it’s too good to be true. We think that maybe there is a light at the end of the tunnel after all. There is still a frustration coming from the American working class who are unable to provide for their children. Coupled with not being able to put food on the table and not having access to healthcare. While working a full-time job, all of these unemployment numbers stop making sense. When we look at it from this perspective, the numbers become insufficient statistics. They are a hollow promise that more jobs mean better wages.
For many, many years corporations were responsible for giving out the big paychecks. Since we were kids we were asked what we wanted to be when we grew up. We were told that we could be anything we wanted. This also meant that working for a bigger company will always mean better things.
And it did, once upon a time. The biggest guns in America during the 50s, 60s and 70s “were unionized industrial powerhouses. These included General Motors, United States Steel, General Electric (GE) and Chrysler, where workers earned middle-class salaries. This was a long time ago and times have changed. This change that spanned over three decades speaks volumes about the displacement in the current economy. It is a change caused by the seismic shift of workers from manufacturing to the service sector. This sector is where most small businesses are accounted for.
The potential to start a business was a way to build a path towards the American Dream. As a result, it has become much harder to reach. However, it does not mean that it’s impossible or that it’s gone. It is merely evolving as our visions of the future do.
This became the foundation of free enterprise. Our economy is quite often obsessed with the bigger picture. This means the notion of small businesses is easily tossed aside.
But small businesses are responsible for driving economic growth. Although they are responsible for creating more jobs, they do more than that. They provide opportunities for people to build financial stability for themselves, for their families, and for future generations.
Let’s start with the obvious: size.
Definitely an advantage. Say you’re a huge retailer, you have multiple distribution centers all over the country, and you’re clocking in hundreds of millions of dollars annual net profit. When you buy large amounts of goods from suppliers, you have control over the terms of the agreement, where small businesses can only purchase smaller quantities at a time and have very little room to negotiate. As a big business, you have a monopoly over the marketplace. You own the playing field and everybody’s playing by your rules. This also applies if you’re a well-funded start-up that is not having to deal with the pressures of finding initial capital.
As mentioned in a previous article, innovation does not always mean breakthrough. It only makes sense if it has the support of strategy and the ability to educate people on how to use it. This is where size is at a disadvantage. It is more difficult for larger companies, with all their glory, reputation and years of building public trust to change directions and take bigger risks. Larger firms have longer deliberations, layers upon layers of bureaucracy to get the green light, and extended lead-times to make even minor decisions.
Smaller-scale businesses on the other hand, don’t have those kinds of targets on their backs and therefore have the luxury of mobility and flexibility. They can take sharper turns and bigger risks with strategies. They can market test faster and distribute their products at a much quicker pace. For larger businesses, it is more challenging to adapt to unpredictable market demands, whereas small business can easily adapt.
And most importantly, small does not mean weak. It means having the capacity to easily give the marketplace a reason to trust you. And trust is perhaps the most valuable asset any business could ever have. It is a sign of these confusing times that larger companies are being put under the microscope. Once a business takes advantage of their market’s trust, they can spend decades trying to get it back.
Effective Communication Tools with SeeBiz
Smaller businesses also communicate at a more personal level with the market– the type of communication that doesn’t feel like an interaction with a robot. Small means that when your strategies are well-calculated, you could learn more about your market first-hand than all the Goliaths that feel out of touch with their consumer base. Small means being able to pay attention to the details that matter because those details could take consumer experience a step further.
As a smaller-scaled business, you don’t need a complicated CRM system that has a ton of customer information. You need a more streamlined communication tool that enables you to get direct access to your network of manufacturers, distributors and retailers.
Enter, SeeBiz. By inviting the connections you already have onto the platform, you get a network to start with. It may not be vast, but it’s enough to start. SeeBiz will take care of the rest.
The connections that you make along the way will reinforce your growth as a business, to innovate, to strategize, to learn, and to pave new paths towards a better and more sustainable vision of the American Dream.