The government and business media and sideline observers want to call your business small. That categorization applies to more than 99% of business firms in the USA. So someone’s missing something about the nature of the business economy. Small business makes the biggest contribution.
The error lies in misunderstanding systems thinking. The reason why people start and nurture small businesses is that they have an imagined idea for a new and better future – a better product, a better service, a better membership club, a better environment for office workers, whatever it may be – and they work with other people to try to bring it about. The other people they work with may be customers, partners, supply chain elements or employees; the business owner figures out the best network. The network and the connections and the information flows are never small. Today, thanks to the internet and collaboration software and communications, the network is the whole world. Any so-called small business can link to and orchestrate the world’s resources, the world’s designers, and the world’s imagination to bring value to its customers. What’s small about that?
Cynthia Kaye is one small business owner and consultant who fully recognizes the implications of thinking about the scale of the network rather than the scale of one node. First, it requires big thinking. What is the best way to harness the global resources to which business has access? What is the best service for customers? What’s the best way to provide service to customers?
For example, in her own business of video production, she has defined many ways in which her company can be the best. For example, being the best at getting the most out of the client’s budget. That’s a compelling value proposition and a genuinely unique claim. To deliver requires knowledge, experience, imagination, creativity, relationships, control, and meticulous attention to detail – all of which can be combined in an unsurpassed combination recognized by clients as superior.
Economic growth and value creation come from using imagination and experience to create new knowledge: a surprise, a revelation, an exceeding of expectations. Imagination is not a product of scale but of creativity.
Cynthia translates this big thinking into big opportunity. Often, this comes from growing with a client. That growth can begin parallel with a small customer – growing together through co-creation and collaboration. It can also come from small business supplier serving big business so well that more and more revenue is directed their way. The resultant shared growth benefits both parties. Is that big or small? It’s actually unrestrained, unlimited, unbounded.
From this collaborative networked co-creation process comes big success. We know from Hermann Simon’s database of Hidden Champions that so-called small business can outperform big business in many ways, including higher revenue per employee, higher profit margins, greater employee retention, longer and stronger customer relationships, and more innovation and investment in R&D and new projects and capital equipment. Hidden Champions is a better descriptive term than small business.
Small business shouldn’t be hidden or ignored – it should be celebrated, lauded, cheered on and loved. Small business is the economic system that generates the prosperity we all enjoy.