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Why Small Businesses Are Starting to Win Again

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Re: Why Small Businesses Are Starting to Win Again

#31

Post by fluffheadsr »

AnthonyMouse wrote: post #24
Rapzid wrote: post #22

Earlier quoted context omitted.

Craft beers are "mass produced", just not in the quantities of Budweiser. They still use huge kettles, precisely controlled quantities of ingredients, etc. They also tend to use higher quantities of good, natural ingredients and the like. SO yes, mass production in and of itself doesn't necessarily drive quality. BUT. The size of the company can. Very large companies, particularly public but not limited to such, star…

> Very large companies, particularly public but not limited to such, start drifting toward the cheapest product they can get away with while maximizing profit. That's their obligation to share holders after all. This is largely a myth. Corporate executives have an obligation to shareholders, but that obligation is not to maximize quarterly profits. Short term profit maximization at all costs is generally not in the i…

oh, so that's why they lay off staff during record profits.. to not maximize short term profit to share holders?

Re: Why Small Businesses Are Starting to Win Again

#32

Post by morgante »

blumkvist wrote: post #29
morgante wrote: post #8

Earlier quoted context omitted.

> I think the big part is affluence full stop. I don't know about that. Most luxury spending I see goes towards huge brands (fashion labels, air travel, etc.), whereas necessities can go to small businesses. I'd probably never buy my clothes at a random boutique, but I might pick up a lightbulb at the corner hardware store.

I think you misunderstand what a small business is. A corner hardware store is a micro company. For most intents and purposes a small business is between 10 and 50 employees and/or between 10 and 50 million in annual revenue. In the US the Small Business Administration will classify most of the companies under 500 employees as a small business.

I think you're being needlessly pedantic.

A corner hardware store is absolutely 100% a small business. What possible argument do you have for claiming it is not?

Re: Why Small Businesses Are Starting to Win Again

#33

Post by blumkvist »

morgante wrote: post #32
blumkvist wrote: post #29

Earlier quoted context omitted.

I think you misunderstand what a small business is. A corner hardware store is a micro company. For most intents and purposes a small business is between 10 and 50 employees and/or between 10 and 50 million in annual revenue. In the US the Small Business Administration will classify most of the companies under 500 employees as a small business.

I think you're being needlessly pedantic. A corner hardware store is absolutely 100% a small business. What possible argument do you have for claiming it is not?

The way it is treated by tax authorities and the administration. If that's not enough for you, I don't know what is.

Re: Why Small Businesses Are Starting to Win Again

#34

Post by morgante »

blumkvist wrote: post #33
morgante wrote: post #32

Earlier quoted context omitted.

I think you're being needlessly pedantic. A corner hardware store is absolutely 100% a small business. What possible argument do you have for claiming it is not?

The way it is treated by tax authorities and the administration. If that's not enough for you, I don't know what is.

I'm going by what nearly every normal person in the world considers a small business.

For example, Wikipedia: "Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing, and online businesses, such as web design and programming, etc."

If you truly believe that a corner hardware store is not a small business, please go ahead and tell that to the store. See how much they laugh at you.

Re: Why Small Businesses Are Starting to Win Again

#35

Post by ap22213 »

"Small" businesses win when transaction costs between corps get smaller, when supply chains get more efficient, when more available capital is fills out choices in the supply chain, and when more corps can focus more on competitive advantage. A "small" business (with some exception to service-based businesses) is a just a "head" of a long, long supply chain. And, it only looks small if you look at the head.

I have been hoping for years that this type of economy would emerge. This type of transformation will allow for more small entrepreneurs to survive and thrive. Large corporations tend to focus on optimization, and that optimization narrows the types of products that they can produce. With small businesses, customers can get more tailored products, more individualization, more personalized service.

Although it's easier than ever to start a small business, I don't think we're quite there yet. Large corporations still have economies of scale to their advantage. But, I'm hopeful that we're trending in the right direction. I'm hopeful that soon, small entrepreneurs with a good business ideas can make reasonable profits staying small and fitting in somewhere in that massive, global supply chain. In that type of world, we all benefit.

Re: Why Small Businesses Are Starting to Win Again

#36

Post by DanBC »

blumkvist wrote: post #33
morgante wrote: post #32

Earlier quoted context omitted.

I think you're being needlessly pedantic. A corner hardware store is absolutely 100% a small business. What possible argument do you have for claiming it is not?

The way it is treated by tax authorities and the administration. If that's not enough for you, I don't know what is.

Are you talking about an independantly owned corner hardware store? I can see your point if you're talking about a chain of stores.

The definition you used does not specify minimum employee levels and I'm a bit confused why you added those minimum levels.

Re: Why Small Businesses Are Starting to Win Again

#37

Post by blumkvist »

morgante wrote: post #34
blumkvist wrote: post #33

Earlier quoted context omitted.

The way it is treated by tax authorities and the administration. If that's not enough for you, I don't know what is.

I'm going by what nearly every normal person in the world considers a small business. For example, Wikipedia: "Typical examples include: convenience stores, other small shops (such as a bakery or delicatessen), hairdressers, tradesmen, lawyers, accountants, restaurants, guest houses, photographers, small-scale manufacturing, and online businesses, such as web design and programming, etc." If you truly believe that a…

Why should I enter a store and tell them something like that? And even if I do such a bizzarity why should I care that a clerk laughs at me?

Re: Why Small Businesses Are Starting to Win Again

#38

Post by blumkvist »

DanBC wrote: post #36
blumkvist wrote: post #33

Earlier quoted context omitted.

The way it is treated by tax authorities and the administration. If that's not enough for you, I don't know what is.

Are you talking about an independantly owned corner hardware store? I can see your point if you're talking about a chain of stores. The definition you used does not specify minimum employee levels and I'm a bit confused why you added those minimum levels.

Yes, a chain of such stores sounds like a small business. A single location sounds like self employment. Micro business is the legal term, at least in the EU.

Re: Why Small Businesses Are Starting to Win Again

#39

Post by s_baby »

Rapzid wrote: post #22
syllogism wrote: post #18

This was a frustrating article, because I think it's almost right, but not quite. It's not that mass-production kills quality or "intangibles". We don't have to assume boutique products have a quality advantage. It's just that scale is most effective on price, and price sensitivity is not linear. Once products are cheap enough, price discrimination stops being decisive. > The true-differentiation strategy seems to wo…

Craft beers are "mass produced", just not in the quantities of Budweiser. They still use huge kettles, precisely controlled quantities of ingredients, etc. They also tend to use higher quantities of good, natural ingredients and the like. SO yes, mass production in and of itself doesn't necessarily drive quality. BUT. The size of the company can. Very large companies, particularly public but not limited to such, star…

Craft beers are mass produced but sourcing ingredients that meet their requirements may or may not be scalable.

Re: Why Small Businesses Are Starting to Win Again

#40

Post by AnthonyMouse »

yuhong wrote: post #27
AnthonyMouse wrote: post #24

Earlier quoted context omitted.

> Very large companies, particularly public but not limited to such, start drifting toward the cheapest product they can get away with while maximizing profit. That's their obligation to share holders after all. This is largely a myth. Corporate executives have an obligation to shareholders, but that obligation is not to maximize quarterly profits. Short term profit maximization at all costs is generally not in the i…

I wonder why they are so common though.

My theory is that we have too much diffusion of ownership. When Foo Corp is majority owned by four dozen mutual funds which are in turn owned by ten million different people, there is nobody minding the store. The mutual fund managers are picking a stock to make up ~1% of their fund, and they have the same perverse incentives as the executives. The individuals who are the real parties in interest don't even know what companies their money is invested in.
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