By: Co-Editor, RS:
As the decade came to a close, I took a small amount of time to reflect on another year of my life and how the business world has changed. For one reason or another, I started to think about various businesses that used to be in my neck of the woods on Long Island, New York.
One of the things I started to realize is that despite all of the advances in technology its impact on business over the last 10-15 years, the overall effect has not been good for the entrepreneur or the small business owner.
Can you imagine if you wanted to open a hardware store in the suburbs of any large or small city? Good luck. You will never be able to compete with the likes of The Home Depot. How about opening an office supply business? Once again, good luck, as Staples or Office Depot buys in such bulk that one cannot possibly compete on pricing or national advertising.
My recollection of the beginnings of this trend of “Big Business” domination ruining it for entrepreneurs, started in the mid to late 1980’s. It seemed that on every corner of the universe you were able to find a neighborhood video store. Then in the late 1980’s after Wayne Huizenga acquired the Blockbuster name, we started to see these mega-video stores all over the place. There were times you could find numerous Blockbuster stores within a few miles of each other. This phenomenon crushed the small mom and pop video retailer as everyone enjoyed the variety that Blockbuster could offer the consumer due to its ability to carry more inventory.
In the late 1980’s, we witnessed this trend with retailers that sold video games; consumers could not wait to run to their local store to see what new games arrived for their Atari game system. Companies such as EBGames started to expand and once again, the small business owner was forced out of the market simply because they cannot compete on pricing when these large franchises bought in bulk. Today, EB Games has over 6,100 stores.
While the mega-franchises/businesses appear to create tons of jobs, they have also been a contributing factor to the large numbers of small businesses nationwide that have closed over the last 10-15 years. Think of the hundreds of thousands that have lost jobs due to the small business owner closing it’s doors. The entrepreneur and small business owner are the one’s that drive the economy.
Wal-Mart employs over 1.6 million people and approximately 90% of Americans live within 15 miles of a Wal-Mart. These are astounding statics, yet frightening how one massive corporation can control so many people and block thousands of competitors in its path.
The Federal Trade Commission (FTC) is an independent agency of the United States established by the Federal Trade Commission Act in 1914. Its principal mission is the promotion of “consumer protection” and the elimination and prevention of what regulators perceive to be harmfully “anti-competitive” business practices, such as coercive monopoly.
Coercive monopoly occurs when the monopoly prohibits competitors from entering the field, with the natural result being that the firm is able to make pricing and production decisions independent of competitive forces.
I never claimed to be an expert on the legalities involved in FTC enforcement or any other agency, however, if you think about what has taken place with these mega-companies it would appear that the FTC or some other agency really has not fully understood the impact of what these corporations have done.
It has become virtually impossible for the entrepreneur to start a business in a number of different industries. As mentioned above, a hardware store, a office supply store, a supermarket or even car rental company are now beyond the grasp of entrepreneurs.
As entrepreneurs, I think we really need to ask ourselves has big business ruined it for the entrepreneur? I think you all know my answer, what do you think?
, home depot , local store , national advertising , staples , wayne huizenga
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