Small Business Anti-Charisma

Small business

They say 80% of small businesses fail in the first few years. So if you're considering quitting your job and doing the whole entrepreneurial thing, then listen well because smart people pay business consultants good money to hear the advice that I'm about to tell you. Let me give you an insight into the difficulties.

Firstly bureaucracy is stacked against you. You may have a wonderful idea a scheme a plan a window of opportunity to be exploited by you or some other angle, but let me assure you bureaucracy of governmental and corporate nature will stifle your innovation and quash your plan. You didn't fail because you didn't have a plan; you failed because the system of commerce has evolved so that you cannot win. You cannot.

PAYPAL:

And you might think that the internet is a new free frontier that I have not considered, but once again let me assure you that the internet is not free and has already been stitched up by power holders such as Paypal Ebay, Amazon and so on. And by the way Paypal is not a bank they are not as stable as a bank and they often freeze accounts or steal money from accounts and dish it out to whom ever they choose. What's more with many millions of accounts paypal never delivers a coherent human response, they always send robotic response to complaint or a confused human response asking the same questions you already answered five times before to five separate "People" because its quite obvious their operators do not use their real names. Be careful!

Trademark and Copyright:

You want to sell Nike shoes in your shop? but Nike will not let you. So there you go a simple idea blocked by bureaucracy. You travel overseas and find a Nike supplier the margins are good, you sell some Nikes on Ebay and then because you yourself are not Nike, Nike complains and has you banned from Ebay. All the revenue gets taken from your paypal account and allocated by paypal back to the customers who now have both your money and their shoes! You are the only one who loses.

Two identical shoes one is a Nike the other looks the same but has no Nike "swoosh" symbol. One is worth something the other is basically worthless. So you see the symbol adds value. The symbol is known as copyrighted property and this means that that product can only be sold displayed etc with the express permission of the copyright holder. The logic behind this is that the Copyright holder spent much time money and effort developing their brand, so they ought to have the final say as to that brand's use. If its second hand you can sell it yourself, without the need for copyright holder permission, but if its a factory new product, generally speaking it is only valid for sale if it is sold through the channels set up by the copyright holder.

SO in this case Nike is based in USA, manufactured in China, and sold world wide by Nike France, Nike UK, Nike Brazil, Nike Country Xyz. etc.

These distributors are the deciders of which stores will receive permission to sell Nike. So if you are Joe Smith who quit the office 9 to 5, with the aim of opening your own little shop or internet retailer and then selling well recognised consumer brands such as Nike or any other well known brand for that matter - it could be Sony, Nokia, Polo, Lacoste, Hugo Boss, it doesn't matter, you will not be allowed by the copyright holder, because they only go with either flagship stores of their own, or with large recognised and established retailers such as Macy's, Harrods, Target, Kmart, Walmart Footlocker, etc. If you try to operate outside of this system you will get crushed.

So you see even the great idea of selling consumer goods on Ebay or other e retailer sites is just not stable enough to be viable as after a couple of months you will be crushed by the system. All brand copyright holders take a keen interest in protecting their power over their brand and they regularly trawl Ebay etc in search of "backyard retailers" like you were considering becoming.

What's more, even if you're not selling fake goods, it makes NO difference. If you are not the Copyright holder or the authorised reseller agent of those lovely factory new Iphones you bought in China and shipped back to the west, then you are going to get crushed when the trawling Copyright holders see your Ebay listings.

The tragedy is that if you did have access to and permission to sell these goods, you would get very wealthy. But you do not and can not have access to such value rich goods. The idea that only Copyright holder and Copyright holder's friends can sell Copyright holders product/s is quite monopolistic and just as present on the internet as it is on the high street.

A few years ago the internet was synonymous with the rise of two things: Porn and fake Copyrighted goods. This is a whole topic in itself, but it will suffice to say that that initial first wave of the revolution of internet commerce has quickly succumb to attempts by power holders to muscle in control regulate sensor your internet

Economy of Scale:

This next way the world crushes you and destroys your small business dreams is called economy of scale.

Did you know that BMW the luxury car maker only makes about 3%net profit margin on its gross revenue every year! That means that if you're lucky enough to buy a BMW and you pay $100 000 for it, then BMW share holders only receive $3000 of that total! That sounds like a bad deal for BMW right? But in today's commerce that is the norm. Basically in the start to finish process of developing creating and delivering a product to you the consumer, everyone involved in the process gets a bit of money so by the time the product reaches you it has passed through the hands of many different service providers. For example a chicken farm who sells chicken that eventually ends up in your local supermarket makes only 10 cents per bird net profit. The whole chicken processed and ready to buy costs you the consumer $9. Consequently the chicken farm must sell tens of thousands of birds every year if it is to generate enough revenue to meet its bills its staff wages and to make some profit at the end. So the result of this system is a peculiar one, the result is that only the big organisations corporations and big private companies will be able to produce enough product or sell enough product to be able to make any profit at all. Its all well and good that a 10 million dollar chicken farm has yearly costs of 2 million dollars but brings in a gross revenue of 2.2 million dollars: This may give the owner of the farm some $200 000 per year net profit. But if he has a bad year or any problems in that year - any problem at all, then he may only earn 1.98 million, in which case that year not only does he not make money but he actually ends in negative profit. Or he could have made the required 2.2 million gross revenue but found that the price of grain had risen eroding his profits to nothing or their was a drought that year or a bird flu epidemic etc etc. Even at the big end of town business is a worrisome and uncertain competition. There must be no excesses no waste no idling, because your competitors will crush you if your not johnny on the spot! So even big companies are vulnerable to market conditions, but they are in the best position to make some profit; not you the individual. So if you start your own chicken farm and hope to make money- forget about it. You sell 500 chickens a week to Tescoe or whatever supermarket, and this gives you a gross revenue of just 500 chickens multiplied by 6 pence. So your farm has earnt you 30 Pounds that week. But you have expenses for your little farm of say 1000 Pounds per week. (Note a supermarket chain would never take on a supplier with such a small ability in the first place, so you would not even be able to entice the supermarket to do business with you) The fact is that an organisation has the size to be able to exist and continue business on just 3% profit margin, but the individual does not have this option. An individual business must make a margin more like 15% to be viable. That is the reason why over the years and during the consolidation of world markets globally, "ma and Pa" style operations have proved un profitable in comparison to the greater efficiency of uber large corporations. This is the economy of scale. But it was not always this way!