As a nation, we should care far more about small business and their place in our economy. Small business owners have been threatened by the rise of the large, powerful companies which are hollowing out profit opportunities for our business community. And I’ll tell you why we should care.
Large companies are vulnerable to external shocks in a way that numerous smaller businesses are not. By their nature small business is diversified. This is not a strategic outcome, but the natural effect of 480,000 different individuals in New Zealand having 480,000 ideas about what their business should be, and sell. A handful of large companies can never compete in resilience with a large number of innovative, entrepreneurial smaller businesses. Fonterra can get taken out by a drop in milk powder prices, or a reputational shock. Air New Zealand, as we have seen not for the first time, can get taken down by world events outside of its control.
Smaller companies find ways to pivot swiftly and create a powerful base for the economy.
Smaller companies will always find more imaginative ways to react and respond to external shocks, partly because it’s a lighter vehicle to turn but also because their house is on the line. They had better find a good answer if they want to feed their families and retain their home. Necessity is the mother of invention. Consider Peak Fitness in Havelock North with its premises suddenly closed due to COVID-19, pivoting immediately to its online Personal Training programmes, or innovative recruitment companies like The Talent Hive in Christchurch, pivoting to HR services to help businesses deal with the fallout.
Another reason we should care about is that small business owners care about their people more. We hear many stories of workers being exploited and it happens. The law should protect the weaker people in any transaction and labour law should look after the employees in an advanced economy. However, in smaller companies, the dynamic is quite different from larger businesses. Air New Zealand laid off 4,000 people. It probably had to.
It’s a lot harder to look someone in the eye and lay them off when it’s just you, them and maybe 2 other people. It’s personal. It’s incredibly hard, and it should be. You are threatening someone’s livelihood. Every redundancy leaves a scar and no small business owner will do it lightly. The connection between people working for the business and the owner of the business is deep, it’s personal, and both sides are the richer for it, no matter how challenging it is.
We should care more about our small business community because they meaningfully employ many New Zealanders, they diversify our economy and they, ultimately, will find innovative ways to grow business in the new time of COVID.
We certainly care at Beany about our small business owners and want them to prosper, check us out at beany.com.