All of us were conditioned to believe that only two economic theories exist. Socialism and Capitalism. A third one comes to mind, Communism? Hmm, I’m also confused… We also hear about the free market and entrepreneurship, which are supposed to be the “babies”, or seeds of capitalism. I beg to differ.
As a small businessperson, I am sure, you wondering why an article like this would be on this site. Its important for you to understand these concepts if you intend starting a small business, or are already in business. PLEASE NOTE, that I am not attempting to convince you of anything, or “poison your minds”, just sharing information, and you don’t have to believe it.
Firstly, in all socialist states some “free” enterprise exists. And a certain amount of “socialism” exists in “capitalist states.
Few, ever dared to question the difference between Capitalism/corporatism and free enterprise.
It is mistakenly assumed that a small business is just a smaller version of a bigger corporation, nothing could be further from the truth.
Historically, most corporations (not all) were created with the assistance of governments. Massive infrastructure and financial support was invested in the CORPORATIONS. To this day, any CORPORATION has guaranteed access to limitless cash from “institutional investors”, read corporate banks, which SME’s don’t have.
CORPORATIONS hate the “free” market, hence they merge and take over, the competition. Smaller companies do not stand a chance against these giants, when they start a price war and manipulate the “markets”. And of course, when CORPORATIONS refer to the “MARKET”, they mean Financial Markets.
If a CORPORATION is a bank, they can rely on government money, read TAXPAYERS money, to bail them out, if they fail in business (yes I know, governments have a responsibility to protect its citizens funds)
A shocking truth is that Government and the CORPORATIONS, DONT want small business to succeed. Despite claims to the contrary, government initiatives, to fund SME’’s etc, I don’t buy their so called commitment to SME’s
Lets explore this further. Many tenders give SME’s first preference. Many contracts are awarded to small businesses, no denying that. Why, then cant most government department’s honour their contracts and pay SME’s timeously. They know very well, that it creates cash flow problems. Oh,.. And don’t tell me its red tape. Government pays their employees on time.
CORPORATIONS are just as guilty when it comes to their small business suppliers.
They prescribe and dictate to their small suppliers, the small suppliers end up being regulated like employees. For fear of loosing their contracts, SME suppliers are then at the mercy of their corporate clients. What is free about free enterprise here.
Many SME’s have ONE corporate or government customer. This is dangerous, let me elaborate.
A single contract can be a good starting point in business. The danger, however, is that many contractors stay at this point. The comfort zone of a guaranteed income or “contract” turns these contractors into lazy people. I understand that no one likes uncertainty, and wants a stable business environment. But A REAL businessperson, markets, generate clients, trades etc. Look at it this way; a business with 100 clients would need to loose all its clients for it to collapse. With government and corporate contracts, it only takes one contract terminated, and the business is in serious trouble.
What about the other argument, that “people don’t pay, so I’ll rather work with government or big companies”. Duh! Big companies also don’t pay. And where do you suppose Government and Big Business get their income? The people, of course!
Someone once said, “everyone wants from government, but the government takes from everybody”.
What about a franchise? Just another scam, oops! scheme to lock your into some form of “employment”. And the franchisee PAYS the franchisor for his business/brand name. The “manager” of a branch pays his holding company. What a con? You cannot start your own brand so buy another companies brand/ franchise and we in business…!
And …and you dare not criticize government or the corporations in any manner, you will certainly loose that contract. Take them to court? Forget it. You will loose big time. Government and corporations love it, when small businesses take them to court. Cut your losses and move on.Your energies are needed somewhere else, not in court.
SO WHAT DO WE DO AS ENTREPRENEURS?
My Collins Concise Dictionary, defines an Entrepreneur, as the OWNER of a business enterprise who, by risk and initiative attempts to make profits.
Real free enterprise is finding an idea or a product that you have a passion for. Sell it to as many people as possible, and make sure they pay you. Create value, if you want people to pay. Set up your business with as little funding as possible (not impossible). No one ever claimed it would be easy, the joy of life, is overcoming its many obstacles, with your drive and resilience. Too many loans and credit will enslave you. The corporate banks want to keep you in debt, until you fail or die.
Believe in yourself, gain self-worth/esteem if you lack it, and trust only yourself. We rely on others, but don’t become dependant, BIG DIFFERENCE!
Economic circumstances, interest rates, skills, political stability and many other excuses don’t deter the enthusiastic Entrepreneur. It doesn’t stop the corporations.
The corporates grow their turnovers, year-on-year by 80 to 100%, in economies that supposedly grows at 4 to 6%. Do they know something we don’t know?
We need more entrepreneurs, not employment. What holds many people back is fear and doubt. Free enterprise will only thrive, if more businesses are established.
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Originally Posted by Marq
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