The only thing that’s certain for small businesses heading into the future is that it’s going to become increasingly difficult to compete with big businesses. And big companies – always driven by the urgent need to expand – will continue to look to the little guys’ market share as a way to satisfy their feeding frenzy.
Given this, it’s to be expected that a lot of small businesses are going to disappear by the end of this decade. Any company that is struggling along today with an old-school business model is at risk. Because so many small businesses fall into that category, odds are the closure rate of existing businesses will look a lot like a mass extinction.
But the disappearance of even a large percentage of small businesses doesn’t necessarily sound the death knell for small business. Small business isn’t dying. It’s just changing, driven by market forces that no company, large or small, can resist.
If You Can’t Beat ‘Em, Join ‘Em
Right about the time that Wal-Mart was ravaging the countryside, killing off independent shop owners and small town retail cores, eBay was exploding online. And although it might be next to impossible to run an independent retail boutique in the shadow of the big box, it is possible to run a profitable online retail boutique inside eBay.
Today, more large businesses are looking to expand their reach by becoming the conduit through which small business grows and succeeds. That creates significant opportunities for existing small businesses to carve out a new niche, and for entrepreneurs to find opportunities to explore.
Everything is becoming automatic. Our cars even read us text messages automatically. Now, the same automation tools, such as online inventory management, that have given market leaders an unbeatable technical competitive edge, are available to small business owners.
Essentially, a small business can hitch its wagon to the technological capabilities that make the big boys’ operations so efficient. This will enable cutting-edge small businesses to behave more like their behemoth competitors. It will also make it increasingly difficult for small businesses that cling to old ways of doing things to survive.
Social marketing companies like LivingSocial and Amazon create opportunities for small businesses to promote themselves effectively. Search engine optimization firms enable small businesses to compete effectively for Web traffic. Massive social media sites like Facebook provide a wide range of marketing and promotion opportunities.
Digital marketing is comparatively inexpensive, and a savvy business owner can do a lot by him- or herself. That is creating a new competitive landscape in which a very smart, creative entrepreneur can keep stride with the collective IQ of a larger firm.
The bottom line is that today’s small businesses are facing extinction. But some of them have evolved already; others are in the process of evolving; and there are millions of entrepreneurs waiting in the wings, who will succeed with rapidly emerging new-economy small business models.