Why It’s Harder to Be a Small Business Owner than a Big Business Manager


Key Points:

  • You can lose your house
  • You can face public humiliation
  • You are not insulated by public money or banking support
  • There is no team, it’s just you.

Managers of big business get paid more than owners of small business, on average.  Public servants also on average get paid more than the owners of small businesses.  They get a higher reward than the small business owner, on average.

Yet small business owners take on far more risk than the other two groups.  If a small business owner fails to ‘perform’, he or she could lose their home.  They can be humiliated in their community as business failure is often seen and judged by others.  Financial losses in New Zealand are equated with personal failure and we judge this group harshly, unlike in the US where business failure can be equated with risk appetite and bravery. There is a mismatch between risk and reward.

If your small business is failing, you can be sure that the banks will not be predisposed to help you.  In fact, COVID 19 gave us a perfect example of banks’ failure to back small business.  They stepped back, notably and demonstrably, from their small business client base – the government had to step in.

There was also a lot of quite ‘judgy’ commentary from the general population about the government loaning money to businesses that may still fail.

Yet, no one seems to mind that we are bailing out, again, our national carrier at vast expense. In other words, we seem OK with bailing out inefficient larger businesses and much more judgemental about helping our small business owners.

All business owners are sometimes lumped together, but the point is that there are significant differences between Air New Zealand and the Chia Sisters.  Air New Zealand is government-backed, well funded with significant financial assets and the Chia Sisters are two courageous businesswomen from Nelson.  Both lost 80% of their revenue. One company decided to blatantly use its customer’s money, twice. Once by refusing refunds and twice by taking government money.  The Chia Sisters pivoted to new products and developed their online presence to save their business and their families assets. They also stayed true to their values, including being mindful of the environment and good to their people. Air New Zealand, not so much.

Not all business is equal.  Big business is practically bureaucracy and small business is innovative, courageous and present in their communities.

The final inconsistency in the picture is that the small business owner is often alone. When our revenue disappears and the world has turned itself upside down, we are alone with our spreadsheets, our stress and our decision making.  Big business has teams of financial experts, Boards and asset backing.   We are alone in our waka, without familiar stars.

We should be considering ways to correct the imbalance of risk and reward for our small business owners.


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