Small vs Big Business – How We Feel versus How It Really Is
Long live small business
2016 is an incredible time to run a business. I won’t get into the argument of idea over execution, but I’ll state the facts. In 2015, 608,100 businesses started up in the UK – a 4.6% increase on the year before (581,173). The resources that we have at our disposal give us the potential to take any idea from thought to fruition.
As consumers, this avalanche of new brands makes it seem there is an overwhelming freedom of choice when it comes to what we buy. But once we take a deeper look, are we really that free? Oxfam International’s graphic on ‘The Big Ten’ speaks volumes about how we feel versus how it really is.
Nestle, Coca-Cola, PepsiCo, Kellogg’s feature amongst the ten conglomerates that own pretty much everything we’d ever buy at a supermarket.
Now let’s delve a little deeper into one industry and take look at like at the very bottom of the business food chain. Craft brewing began as a way for avid brewers to create their own batch of beer in their own home, sharing their recipes with other craft brewers and then distributing their brand to people that genuinely liked the taste. Small business marketing spend is small enough as it is, now imagine it at a scale even smaller than that – hobbyist.
Successful craft beers gained traction because of unique and great taste, not because they spent billions on marketing every year. A craft brewer wouldn’t invest thousands into their product on a whim, they’d first wait until they had created a beer that people actually enjoyed. Which means that for the most part, word of mouth was a craft brewer’s main way of marketing. In a world where there is so much competition, your beer had to stand out.
Years on, craft beer as an industry is now worth $19.6 billion in the US alone. So what happens then? The multinational organisations can’t help but worry that they’re going to be ousted in favour of what people believe to be better tasting beer. So they acquire. Acquisition isn’t always a bad thing. But when one of the key features of a successful product is that it isn’t a daughter company of a multi-national organisation – and then it gets bought out – what is left of the original brand?
Goose Island, Elysian Brewing, Golden Road Brewing, Breckenridge Brewing, Four Peaks Brewing, Devil’s Backbone, Blue Point Brewing and 10 Barrel Brewing were all acquired over the period of March 2011 to April 2016 by Anheuser-Busch. A company that already owns Budweiser and Stella Artois.
Again, where is the freedom of choice?
Once a small business joins the ranks of an incomprehensibly large organisation, suddenly the difficulty they had previously with marketing, distribution and manufacturing becomes far less of a financial burden. The previously competitive and thriving industry starts to mirror what we’re seeing across the whole of the grocery industry. Meaning less competition between the smaller brands, because the competition is between the enormous brands that own the competition.
Now to a company you might or might not have heard of: Jet.com – founded by Marc Lore, a former Amazon employee. Jet.com retails household shopping goods at prices that consistently undercut Amazon. Chances are you will hear of Marc’s start-up soon enough… because just recently he sold to Walmart for £2.5bn. This might actually bode well for the online marketplace – two mass sized online retailers competing head to head with one another is going to drive prices down surely? Everyone wins…right?
Not necessarily. Independent artists seeking recognition for their talent and trade don’t want to hear that their work is being retailed at a price less than it’s worth. Artists across all entertainment industries being financially reimbursed for their hard work is one of the most
pressing topics in the news. We often heard of musicians opting to pull their music from a particular platform because they are making little, if any money from it being there. The same goes for other art forms too – and it’s what has given rise to sites like Etsy, Artfinder and Threadless. Online marketplaces where artists can sell their work and be paid for what it’s worth. This form of online marketplace is what we need more of. Because at the top business level, these sites are competing against one another for visitors and sales – but at the actual product level, artists are going against each other on a design level to create the best product. Everyone is being paid fairly, the only obstacle is the confines of creativity.
There are now online marketplaces for independent artists in every field ranging from birthday cards to jewellers. Previously, if an artist wanted to really get noticed, they would have had to market themselves creatively, or invest vast amounts of money in getting their design on runways, galleries or in the press – especially if they were handmade. This review from Lovemrsmommy hits the nail right on the head, a dedicated site for handmade cards made her shopping experience that much easier and provides the artists with an enormous platform for their work to be seen.
The resources available to us in 2016 allow those with perhaps a little less business acumen and less in the way of confidence to finally be recognised for their talents – through online visibility and fair payment.
Ultimately, this is the way I see small versus big business and it is impossible to draw a line across each industry. Huge market share, in some fields, drives costs down – which is undoubtedly better for the consumer. It increases the likelihood of more frequent purchases, further increasing revenue for the brand themselves. But in other markets, brand domination simply suffocates the players at the bottom who are desperately trying to breakthrough into the public eye.
2016 is an incredible time to run a business. I won’t get into the argument of idea over execution, but I’ll state the facts. In 2015, 608,100 businesses started up in the UK – a 4.6% increase on the year before (581,173). The resources that we have at our disposal give us the potential to take any idea from thought to fruition.
As consumers, this avalanche of new brands makes it seem there is an overwhelming freedom of choice when it comes to what we buy. But once we take a deeper look, are we really that free? Oxfam International’s graphic on ‘The Big Ten’ speaks volumes about how we feel versus how it really is.
Nestle, Coca-Cola, PepsiCo, Kellogg’s feature amongst the ten conglomerates that own pretty much everything we’d ever buy at a supermarket.
Now let’s delve a little deeper into one industry and take look at like at the very bottom of the business food chain. Craft brewing began as a way for avid brewers to create their own batch of beer in their own home, sharing their recipes with other craft brewers and then distributing their brand to people that genuinely liked the taste. Small business marketing spend is small enough as it is, now imagine it at a scale even smaller than that – hobbyist.
Successful craft beers gained traction because of unique and great taste, not because they spent billions on marketing every year. A craft brewer wouldn’t invest thousands into their product on a whim, they’d first wait until they had created a beer that people actually enjoyed. Which means that for the most part, word of mouth was a craft brewer’s main way of marketing. In a world where there is so much competition, your beer had to stand out.
Years on, craft beer as an industry is now worth $19.6 billion in the US alone. So what happens then? The multinational organisations can’t help but worry that they’re going to be ousted in favour of what people believe to be better tasting beer. So they acquire. Acquisition isn’t always a bad thing. But when one of the key features of a successful product is that it isn’t a daughter company of a multi-national organisation – and then it gets bought out – what is left of the original brand?
Goose Island, Elysian Brewing, Golden Road Brewing, Breckenridge Brewing, Four Peaks Brewing, Devil’s Backbone, Blue Point Brewing and 10 Barrel Brewing were all acquired over the period of March 2011 to April 2016 by Anheuser-Busch. A company that already owns Budweiser and Stella Artois.
Again, where is the freedom of choice?
Once a small business joins the ranks of an incomprehensibly large organisation, suddenly the difficulty they had previously with marketing, distribution and manufacturing becomes far less of a financial burden. The previously competitive and thriving industry starts to mirror what we’re seeing across the whole of the grocery industry. Meaning less competition between the smaller brands, because the competition is between the enormous brands that own the competition.
Now to a company you might or might not have heard of: Jet.com – founded by Marc Lore, a former Amazon employee. Jet.com retails household shopping goods at prices that consistently undercut Amazon. Chances are you will hear of Marc’s start-up soon enough… because just recently he sold to Walmart for £2.5bn. This might actually bode well for the online marketplace – two mass sized online retailers competing head to head with one another is going to drive prices down surely? Everyone wins…right?
Not necessarily. Independent artists seeking recognition for their talent and trade don’t want to hear that their work is being retailed at a price less than it’s worth. Artists across all entertainment industries being financially reimbursed for their hard work is one of the most
pressing topics in the news. We often heard of musicians opting to pull their music from a particular platform because they are making little, if any money from it being there. The same goes for other art forms too – and it’s what has given rise to sites like Etsy, Artfinder and Threadless. Online marketplaces where artists can sell their work and be paid for what it’s worth. This form of online marketplace is what we need more of. Because at the top business level, these sites are competing against one another for visitors and sales – but at the actual product level, artists are going against each other on a design level to create the best product. Everyone is being paid fairly, the only obstacle is the confines of creativity.
There are now online marketplaces for independent artists in every field ranging from birthday cards to jewellers. Previously, if an artist wanted to really get noticed, they would have had to market themselves creatively, or invest vast amounts of money in getting their design on runways, galleries or in the press – especially if they were handmade. This review from Lovemrsmommy hits the nail right on the head, a dedicated site for handmade cards made her shopping experience that much easier and provides the artists with an enormous platform for their work to be seen.
The resources available to us in 2016 allow those with perhaps a little less business acumen and less in the way of confidence to finally be recognised for their talents – through online visibility and fair payment.
Ultimately, this is the way I see small versus big business and it is impossible to draw a line across each industry. Huge market share, in some fields, drives costs down – which is undoubtedly better for the consumer. It increases the likelihood of more frequent purchases, further increasing revenue for the brand themselves. But in other markets, brand domination simply suffocates the players at the bottom who are desperately trying to breakthrough into the public eye.
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