The small business rises from the ashes of the large conglomerates.
With the news about Comet’s financial difficulties / falling profits and loss predictions for their 248 stores.
Comet lost 9 million last year and with a 15% drop in sales to date, the companies future looks to be bleak.
Comet is part of the Kesa Group which is looking for a buyer, but in these tough economic times they are somewhat thin on the ground.
Kesa is even reported to be prepared to pay a dowry to anyone brave enough to take over the ailing business of between £50 and £250 million.
Given these numbers it may well be better for Kesa to dispose of the loss making business than to invest in a major turn around project,
presumably given the falling sales figures Kesa doesn’t have the confidence to implement any further expense without guarantee of results.
Kesa is a strong international company so Comet is unlikely to go bust but is also not viable in it’s present form and would need extensive re-modelling and cut backs, it would probably do better as an online business as Woolworths has now become, but the transition is sure to be a bumpy ride.
What has this to do with the small business owner.
The economies of scale do not appear to be working as they did in the past, the super-sized business does have some advantages of scale but it can also come back to bite them.
In a falling market large businesses with their massive overheads rely on huge sales, that in this day and age and also for the for-seeable future are unrealistic.
The smaller business on the other hand can make use of multi tasking by both the employees / the owners, thus giving a more flexible approach to stock and the ranges of products.
The owner can be the manager and accountant as well as work on the shop floor, expansion and contraction of the business is a lot quicker and easier for times of greater sales such as the Christmas period and the slump times such as February and March.
The smaller business also has the advantage of knowing their local community and giving them exactly what they need, not what head office thinks they want.
Also isn’t it nice when you walk into a shop they know you personally by name instead of just being another face there to make a profit from.
Service is all important and often sorely missing with the larger business, customers like and expect personal service and will be loyal to the business that provides this, what’s more it costs the business owner little or nothing to give, and pays back dividends in the long run.
Its all about the capacity of the local markets.
A local market that can’t afford to support the large superstores may well support several smaller owner operated businesses, the financial madness that gave rise to the large stores over recent years is now gone at least for the time being but the public still need to buy, just with more care than they have done in the past.
Smaller business may not be able to carry the amount of stock as the large businesses but they can be more targeted in what they do stock, items can be ordered for next day including items not carried by the larger stores that often will not order any special items not normally stocked by them.
Prices are not necessarily cheaper in the larger stores, many items such as ironmongery are up to half price in smaller stores also a larger selection is often stocked as they are not pre-packed but sold singularly or by the dozen from boxes. Special deals can also be available from the smaller business as they often work via suppliers or co-operatives with increased buying power competing well with the large superstores..
This where the smaller business can step in by carefully evaluating the market and not over predicting growth in the next few years, they can then put together a sustainable business model that will survive these tough economic times.
The Internet is a great leveller for the Small Business.
These days with the internet the small business can have a much larger presence for much less cost and effort, an online shop needs a much smaller/ lower cost physical presence to be able to serve a wide range of products to a large customer base.
This is particularly true of niche markets that the larger business may not be able to compete in due to their enormous overheads when the smaller business can excel in this field.
With good internet marketing and the use of social media such as Twitter and Facebook even the smallest business can have a good internet presence, this will generate the owners regular fresh business for a fraction of the cost of traditional media advertising.
Conclussion.
We all need to prepare for more conservative times (no political pun intended) as and when things pick up, all well and good but until then it is no good expecting the financial madness of the last 10 years to to return.
For now it is necessary to plan for things as they are today with even some leeway for more financial decline, this way we can and will survive.
This article is just my opinion and obviously the large stores provide service and jobs to the local community, so for this reason they have a place in the market.
I feel however that due to the change in the Uk’s/world economic circumstances that the small business model with its fundamental strengths may well see a revival over the next decade or so.
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