The single greatest advantage for small businesses is that they are adaptable, changeable, so marvelously malleable. Small businesses, at least the smart and successful ones, figure a way to respond to what their customers need right now – even if it’s something the business didn’t expect to do. Or want to do.
Examples abound. One of my favorites is the story of brothers who dreamed of setting up a bookkeeping business and did so after World War II. They did accounting work, collections and the like for businesses, and they even prepared companies’ tax returns, often as a free benefit.
Actually, the brothers didn’t much like preparing tax returns. They considered it low-end drudgery. But they couldn’t seem to escape it. Individuals who worked at the brothers’ business clients started asking the brothers to prepare their personal tax returns. That was even lower than preparing corporate tax returns.
Fate struck in 1955 when a newspaper ad salesman convinced the brothers to buy an advertisement touting their tax preparation service. The ad was small, but the next day their office was flooded with customers. Even so, the brothers weren’t sure this was a good thing; it distracted them from their dream business.
Eventually, the brothers, named Henry and Richard Bloch, slapped their foreheads and recognized the business opportunity represented by those teeming masses out in their waiting room. They sold their bookkeeping firm to their employees and formed a new business, intentionally misspelling their name, and H&R Block was born.
Like I said, similar examples abound. They stretch through the ages and across the U.S. map. You’ll find another example in an article on the front page of this issue.
CyberDefender sells antivirus software and has a call-in service to help customers as they install the software. But they noticed many of the callers’ problems weren’t really with the software but stemmed from the fact that most folks simply don’t know much about their home computers. They typically have basic problems, like too little free space on their hard drive, but don’t know whom to ask for help.
Rather than get exasperated at all those cyberdolts out there, the company decided to help them (at a rather steep price of $300 a year). A new business line was launched, and, as you can read in the article, suddenly CyberDefender is expanding rapidly in downtown Los Angeles and hiring hundreds of people. Last month its stock started trading on the Nasdaq. And even though the new company has lost a good deal of money, it is one of L.A.’s fastest-growing public companies.
Much of that growth comes thanks to the fact that the business is close to its customers. The decision-makers could tell what the customers needed right now. What they wanted – and this is the important part – was a bit different from what the company was selling, and they tailored a business to meet that demand. Just like the Bloch brothers before them. And just like a zillion other entrepreneurial business owners before them.
Think about it. For a big country, we have a lot of small businesses. Example: Canada has 20 domestic commercial banks, but the United States has more than 7,000. That’s a lot of decision-makers close to their customers.
All those small businesses are crucial to making the U.S. economy strong. Huge corporations and institutions may be great at cost efficiency and delivering consistent products and services all over the map and at all times of the day and night. But it takes small businesses – at least, the enterprising and entrepreneurial ones – to see what people want right now and quickly come up with a solution. That makes our economy nimble, responsive, marvelously malleable.
Yes, a great advantage for small businesses is that they’re so very adaptable. But one of the great advantages for the United States is that we depend so mightily on our small businesses.
Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].
