How Times Have Changed
As big chains became more and more appealing to consumers, mom and pop stores began to be put out of business, a trend which continued until the idea was all but extinct.
Today, however, the Internet age has brought about a resurrection in the idea of the ‘mom and pop’ stores. Because the World Wide Web offers opportunities for cutting overhead (rent, employee wages, even stock can be greatly reduced) as well as marketing costs, the new frontier for business seems to be online.
It’s a fact that has led to a great increase in the amount of small businesses operating and enjoying success over the last couple years or so.
In the past, the current recession might have proved lethal to a small business, but again the Internet age seems to be working in favor of small businesses in this area.
People are more aware than ever about the practices big chains engage in, in order to keep their costs low.
Mom and pop stores are also able to get into direct contact with suppliers rather than go through a middle man, and both factors help strengthen the prospects of small business in tough economic times.
More Flexibility
Moreover, recession means that the more flexible approach so necessary at all times within a small business allows business to roll with some tough punches.
Conversely, big chains have a bureaucracy that is too large to make the quick adaptations necessary to survive (this is particularly true in areas of price, the number one most important factor to consumers during tougher economic times).
Because of this, small businesses should actually have a better chance of riding out and even thriving within a recession than their big competitors.
The key thing to keep in mind is that a lot of the time, big chains, stores and so on, don’t have much to offer a customer or client beyond what the little business can do.
They have the same product, and there may be some leverage in terms of buying power from suppliers, but that’s about it. What they are really charging for are things such as customer service reps, janitorial services, uniforms, and name recognition. In theory, small businesses should have prices beat based on lower overhead alone.
This has certainly been a major factor in favor of small businesses in past recessions. Several businesses, including Microsoft and Hewlett Packard, got their start during recessions.
They were able to exploit the weaknesses of competitors (in effect hitting while they were down!) and grow businesses that were based on customer demands.
In other words, the no-frills approach necessary to most small businesses is exactly what consumers are looking for during a recession. It cuts costs and earns credibility, so for many small businesses, the recession can be a time to make great strides forward.
