The Concept of “Small Business” in 2009

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Ohg Rea Tone is all or nothing. He is educated and opinionated, more clever than smart, sarcastic and forthright. He writes intuitively - often disregarding rules of composition. Comment on his posts - he will likely respond with characteristic humor or genuine empathy. He is the real-deal.

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The Concept of “Small Business” in 2009

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When I was a child growing up in an Ozzie and Harriet neighborhood we had neighborhood grocery stores, hardware stores, gas stations with neighborhood mechanics, and a small bakery.  All of these businesses were mom and pop operations.  All were a joy to visit.  There was always a friendly face and a genuine desire to help the customer.  The environment of that time was one of mutual respect and support.  As Joe DiMaggio might say, “Nostalgia is not what it used to be.”  America has changed – and the mega corporations drive the economy.

The local Chamber of Commerce reports that 70% of new jobs are created by small business.  Some argue that the federal intervention in the economy was misdirected at the big corporations.  “Let them fail,” has been a common refrain.  Others proclaim:  Investing in banks and the auto industry takes us closer to socialism.  I think it was Henry Ford II who said, “The right to fail is as inherent as the right to succeed.”  Noble talk from a more simple time.

But times have changed.  Small Business in America in 2009 no longer means the neighborhood grocery store or hardware store or gas station.  Small business today most often means owing a franchise sponsored by the big boys, or an auto dealership, or a small niche factory producing plastic door window buttons for General Motors or Chrysler.  The grocery stores are all chain operations with headquarters in some big city.  The hardware stores are Home Depot or Lowes.   Down the road in St. Joseph, Missouri, a locally owned muffler and brake shop closed because of competition from Midas and Auto Medics – regional or national franchise operations. In the past thirty years all of the locally owned banks have sold out to national banking firms. A local bar and grill, in operation for 55 years, recently closed because of competition from the franchise stores of 54th Street and Ruby Tuesday’s.   There are only a few locally owned and operated restaurants left in St. Joseph.

I remember as a youth my parents talked about ‘Mr. Klamm” at the bank.  When my parents needed an infusion of cash for some sort of emergency they would say, “Let’s go down to the bank and talk to Mr. Klamm.”  I remember them coming home from the bank, relieved that their relationship with Mr. Klamm was strong and he helped them because he knew them to be honorable people.  Mr. Klamm did not have to reference their ‘credit score.’  The local bankers today are imported from San Francisco, stopping by on their way to a larger postition with the bank in a much larger city.

Even here in Punkin Center, Missouri, the gas station is some sort of combined over-priced grocery story and lottery center that sells gas on the side.  It is owned by some big oil company located in TIM-BUCK-TOO, Texas.

The point is this: Our economy is driven by big business.  Small Business continues to create more jobs in America – but the small businesses of 2009 are merely niche markets dependent on big business.  Some of these big businesses are so big that their failure cripples the local small business owner who’s livelihood depends on doing business with the big boys.  The local plant nursery receives most of their income by selling potted plants to the chain stores like Wal Mart or Home Depot or Lowes.  Local auto dealerships, with stellar management practices, are suffering the consequences of decisions made in Detroit and on Wall Street.

Hard working local people, willing to invest all of their money and 12 hour days for twenty years, try to achieve the American Dream of owing their own business.  They succeed beyond their wildest imagination, then are stunned to learn that the big boy dragging their wagon has gone lame.  With their heart and soul dedicated to their dream, they hang on, hoping the big boy will recover from Chapter 11.

There are efficiencies in big business not available to small business.  Cookie cutter buildings reduce building costs.  Centralized payroll, Accounts Payable, Information technology, and marketing maximize cost benefit ratios.  Massive purchasing contracts reduces per unit costs.  Centralized research grants the synergy of bright minds working together.

The tentacles of big business weave their way through the economic fabric of even the smallest of communities.  Even the small town farm hardware stores are national chains, sometimes with local franchises.

Have I made the point?  There continue to be great opportunities for the average Joe to own and operate his own business.  But these opportunities are increasingly connected to the health of the national economy.  Our federal government is taking the necessary action to prevent a total collapse of the economy.  Call it socialism.  Call it corporate welfare.  Call it anything you want – but the fact remains that few businesses stand alone in modern America.

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