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Is the Traditional Small Business Economy Over?

February 25, 2012 - Ernest Hohmeyer
Is running a small business today a quality of life improvement or decline?

If running a small business today does not provide the hope to get ahead or at least put enough away to retire before the age of 99, what does that mean to our economy?

When the economy sputtered in the 1970’s it was small business that provided the turnaround.

And it is once again small business that is being asked to lead the charge out of this muddled economy. The new tools of the internet and social media offer the capability of even micro-enterprises to reach the world. We once thought we could conquer anything and now we are disgusted that we cannot change our own government.

To the Rescue

We are even asking small business to fix these ills of the world too. The triple bottom line, the new Noetic Business model where Michael Haupt urges businesses to “to step into the unknown and create a truly better world,” are the latest examples for small businesses to lead the way.

But can they?

Is the reign of small business or at least the way we perceive them coming to an end?

Just as the 1970’s brought the end of not only corporate dominance in the economy but traditional corporate thinking, is small business and what we have perceived as necessary for small business success also antiquated? I lamented the fact when our video and book stores closed. Visiting these places was also part of a social hour, a chance to feel like I was part of a living community. I did not mind when I had to order books they didn’t have. It was another excuse to be in the community again.

My kids miss this too. But they were quick to adapt and show me what we could do with Netflix, Amazon and many others. I revolted for a while not wanting to wade through the impersonal database of information.

My kids though are wired differently. The computer, web phone and iPad are part of their appendage and I believe influences how they think like synapses in your brain. They have no problem doing all of their shopping on-line even when they do not have too.

Businesses & Community

What does that mean to today’s downtown? Is the internet the 21st C threat as strip malls were in the 20th C? Can retail stores stay – retail stores in this new age? If they cannot what will they have to do?

And it’s not just our retail stores. National Geographic Traveler ran a cover story on the decline of family operated tourism facilities.

It seems that the simple small business models of selling books, videos or simply renting a motel room or operating a restaurant is in peril.

I was at one of those community business meetings the other day and was struck by a conversation by several businesses about not wanting to pass on their business to their children. It was “too many hours,” “the business had consumed their life.”

Quality of Life?

But eventually I discovered what they were really saying. It was not the long hours or the hard work; it was that they believed they were not getting ahead. In fact many were lamenting that they were doing more but getting less. Most importantly though I could sense that they did not believe it was away for their kids to get ahead.

Afterall, that is what we want for our kids - a better life.

My own parents were immigrants and America gave them an opportunity to start a new life away from war-torn Europe. They were able to find work and eventually buy a house.

Entrepreneurship was a dream to them. It was the ultimate American dream – to be your own boss. It was a way for you to take that next step in the quality of life ladder.

And eventually they did – and they were fortunate enough to do it here. Entrepreneurship allowed them to come to the Adirondacks and live their dream.

A father myself, I understand now that in large part my parents were motivated to provide a better environment for their kids. They wanted us to grow up in the country and be part of a small community. They also felt that the business that they were building would be an opportunity for us long after they were gone.

New Challenges

Our kids are not stupid.

They see the struggles that weigh down the family day-to-day. But more importantly they probably do not see a way to get ahead - at least not in the business model that many of us operate today. They know that new thinking is required and in many cases not just a new gimmick but a revolution to the way the business operates.

And it scares them that if their “Mom and Dad” are struggling to find the answers, they may not either. We struggle to see hope for their future in our business and they do as well. National Geographic Traveler reports that increasingly generational businesses are vanishing.

So what does all of this mean at a time when we are screaming to "buy locally," and encouraging “localvesting”? A New Economic Model?

Are there new opportunities out there?


But it may not be the way we see our downtown now. It may not be filled with those iconic bookstores or retail shops. It may be more of a mix different businesses working together – our own mini –malls – where a bookstore joins forces with an eatery and a music store. Perhaps business consortium's where a retail clothing shop combines their wares with several other complimentary businesses like a fabric store or seamstress.

The new business model may be cooperatives of several businesses working together, sharing space, labor and marketing power.

The “Mom & Pops” may become multi-faceted cooperative companies of several businesses.

Certainly to grow, they will need to consider an on-line presence. Perhaps on-line community networks can be formed where “Shop the Capital of the Adirondacks” is a cooperative business that handles on-line sales for a whole group of micro-enterprises.

These may not be the answers.

We may just need to be aware that the way entrepreneurship saved us before may not be the way it can save us again.

Our children may not view our business as a quality of life enhancement and for us that is a sad thing as we have poured our own lives into it. My father at least knew that before he died, the business legacy would go on.

Tomorrow May Not Be Today

For every new challenge, there is a new opportunity. But it may not be in the entrepreneurial model we are used to.

And that may be the hardest part for us to get over. To admit we may not know and to try new ideas, even to the point of talking to our perceived local competitors to form new alliances.

We are reminded more than perhaps we like, that this is the root of entrepreneurship: to question everything, be innovative and take calculated risks.

Yesterday is gone and tomorrow may have nothing to do with today.

We may need to realize that the same old economic engine is past its prime and new models may need to be developed.

But ingenuity is what makes America great.


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