A Global Ecomony

The American dream was to own a small local business. It was having a 4 bedroom home with a white picket fence. It was having two sons and a daughter and a family dog. It was a nice dream.

But now, the world is different. That means America is different too. Owning a small community business if fine, but it's not necessarily the path to prosperity it once was.

Local economies have been replaced by a global economy. If you don't believe that, just ask anyone that's recently been on a job interview for a major corporation. They are no longer focused on community and much more focused on what you can do to help their business reap the rewards of emerging markets.  

There's both good and bad for business owners due to this change.

The Good

A small business owner with a community of about 20,000 people had a very limited group of potential customer in the past. Depending on the items they sell and the average lifetime value of a customer, your growth mostly had a very real and hard cap that was easy to estimate.

However, with the assistance of the Internet, many businesses have greatly opened up their potential customer base. Instead of only being able to target the nearby community, they can sell they goods or services, again depending on what they actually sell, to their neighbors and to people on the other side of the world.

The Bad

The opening up of potential reach of a business due to the Internet and e-commerce comes with some problems for smaller business owners. If you have more reach due to technology and globalization, that means other business owners do too. instead of only having local competition, you now may have worldwide competition.

For example, when someone wanted to buy a small appliance, like a blender, in the past they would get in their car and go to a local appliance vendor. Now, many people will skip that and head right to their computer where they can buy from a reseller sourcing their product direct from a Chinese warehouse.

It's very difficult for an SMB to compete with the types of businesses that have massive supply chains and special exclusive deals with these overseas manufacturers using cheap labor.

Adaptation

As technology and trade deals open up the world to a more globalized economy, small business owners must learn to adapt their offerings. While they may not be able to compete in price, they can offer elite service and personalized attention. This is even more important for service industries, but superior customer service can make a major difference in winning over repeat cliental for product based small businesses too.

All in all, the opening up of the world economy may have had a positive impact for consumers that choose to support their community businesses. They may not see a difference in their wallets, but they may receive a more pleasant shopping experience. And, they may appreciate their local business owners more after a few poor experiences when dealing with faceless online vendors.

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