Saturday, February 4, 2017


How many businesses have you seen go under?  Too many for me, particularly of start-ups.

Who is to blame?  Obviously some individuals made some mistakes.  Perhaps they were naive, inexperienced, or under financed.  You might think the blame was on these individuals who were foolish enough to start a business, but I think you have to include us consumers.

It is easy to criticize other's failings from a safe viewing spot.  I have been an employee, an employer, a consumer, a salesman and have seen many failed businesses.  As a salesman I am conscious that the need for a salesperson comes from the fact that everyone is a creature of habit.  We feel comfortable when not rocking the boat.

Large companies have an advantage (most of them earned it): volume efficiencies, credibility, but also consumer habits.  But the larger they are the more they tend to be remote and have no emotional attachment to your concerns.  They operate on formulas and although flexible something is apt to get lost.

It is easy to underestimate what is needed.  To be successful it is necessary to have a lot of up front expenses as attracting attention requires marketing.  Too many these days rely on free marketing. Social media can be very helpful and needs to be attended to, but is not enough in itself.  The underlying assumption is that if they build a better mousetrap that people will flock to buy it.

Experience is an often abused word, but is critical.  The mechanics of the process of business have to be learned.   Before one is a manager one should understand the details of the business.  Maybe more important learn how to work with people.  Obviously there are groups and individuals that are willing to advise and many of them can make a difference.  New entrepreneurs need to be selective and not too proud to seek help.

Another problem that illustrates why the individual must be prepared is that most consumers are creatures of habit.  A few are mercenary and will seize advantages wherever they can.  Many will give a new entrepreneur some encouraging words and go back to their old habits.  Others will try to take advantage of introductory prices and then seek out other introductory deals.  Many will bargain in bad faith.  To build a sufficient base of loyal customers requires a lot of effort and other resources. Marketing is a skill.  Accounting is a skill.  Purchasing is a skill.  Customer relations is still another skill.  Many details--you can learn some of them by making the mistakes or you can pay someone (hopefully trustworthy) to avoid some of them.

As a consumer I see the advantages of dealing with huge corporations--McDonalds, the Keg, Best Buy,   When traveling to unfamiliar places it is reassuring to see a familiar company and their formulas are usually well thought out.  But there are advantages of dealing locally.  If you want to understand a different culture one way is to buy locally

Big companies are able to take advantage of you and that is true the bigger they get where they gain access to very sophisticated tools.  You really can't be friends with the actual owner unless you travel in their circles.  There is truly a tried and true formula to make you feel comfortable, but it is a formula.

When you buy local there are many advantages.  Instead of shipping goods from the other side of the globe many of their supplies come from local sources with fewer pollutants and some of the money stays in the community.  You can get to know the owners and managers.  If you admire someone with the gumption to take a chance you will find many at the local level.  You can build a relationship that is well nigh impossible with big companies.

The consumer is king and everyone wants your hard earned (and any other kind) of money.  We all recoil from bad service.  The real key is how an owner deals with a problem.

At the same time there is no need to be afraid of goods from other lands and feel guilty because you like them  I love mangoes which I usually buy from a local vendor at the Farmer's Market.

I remember reading an autobiography of Sam Walton and at first thinking what a cut throat business man he must have been, but he surprised me.  He decided to focus on price.  He felt a local business man could give better service and if he didn't try to squeeze too much should be able to thrive.

The bottom line is some businesses might well deserve to go out of business, but not before we give them a chance to prove themselves and learn from their mistakes.

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