Smaller Might Be Better

Wednesday, 2007-January-31 at 08:34

Ten Reasons Why A Small Business Is Likely To Be Better-Managed Than A Larger Business

  1. They can't pretend that firing workers will solve their problems.
    I mean, come on.  We've been seeing the same response ever since Robert Allen of AT&T cut 40,000 people in 1996.  This was followed by their continuing decline until one of their descendants bought them and took their name.
  2. No multi-million dollar CEO paychecks.
    Does anyone seriously not know that these packages are money stolen from the stockholders that own the companies and the employees that do the work that produces that money to begin with?  Does anyone actually read all those management studies that show that the best-run companies tend to be flatter structures, with distributed decision-making processes?  Is this the 1880s again, with rigid top-down management and keep all the rewards for the owner / manager?
  3. No crowd of kowtowing suck-ups telling the boss what he wants to hear.
    In a smaller business, employees know that there are other avenues of employment available, so they will tell you unpleasant things, sometimes using the crudest language imaginable.
  4. No virtually unlimited bank account to throw at any problem.
    In smaller businesses, you have to make do with what you have, using your (and your employees') creativity to stretch things beyond their expected usefulness.  You have to learn to do more with less and to repurpose everything and everyone in your organization to fit the current need.
  5. Limited number of customers means that you have to listen to their concerns.
    Large companies generally ignore the concerns of the individual, even when it would not cost them much to please that customer.  Smaller companies that do that eventually chase all their customers away.
  6. No political clout means that smaller businesses have to rely on doing what they do, rather than on some patron in government bestowing special favors on them.
    Smaller businesses save money by contributing smaller amounts to bribery campaign funds, too.
  7. Fewer employees makes a smaller empire.
    The manager probably has to go get his own lunch, instead of wasting company resources on his personal pleasures.  And there are fewer people to blame when the manager's plans fail.
  8. No stock, no outside investors?  No stock scandals.
    There is a much lower temptation to spend your time with "financial engineering" when finances are very limited to start with.
  9. No market power.
    Aw, gee, you mean you can't act like your mobile phone carrier or cable television company does?  You'll just have to win customers by being good to them.
  10. Cannot afford to blow millions of dollars on unfocused advertising.
    Your paid advertisising must be targeted at the specific kinds of people who are most likely to purchase from you.

Entry filed under: Entrepreneurship, Small Business. Tags: .

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