Wednesday
Australian businesses are burdened by regulations (useless ingredients), taxation, litigation and debt. All are increasing.
Change is a constant; the speed and scope of change is not. The marketplace is now changing dramatically – and quickly.
It is not small business operators that are at most threat, it is the corporations. Small operators can make fast adjustments. That won’t necessarily save them, but it gives them a fighting chance.
Big corporations move with the speed and agility of a snail caught in the sun. They are set up for one set of circumstances and have a vast bureaucracy to ensure that every rule applicable to those circumstances is followed to the letter. They tend to be run by administrators, not business people. Unlike entrepreneurs, they are change resistant and have to be repeatedly prodded in order to change anything.
That is not always stupidity; change across a large organization takes a lot of hard work and focus to implement.
Corporate advantage is mainly in the area of brand recognition, buying power (including advertising) and economies of scale. None of these are sufficiently powerful to keep alive a business that has failed to react quickly and intelligently to a changing market.
This is, at the moment, primarily a problem for fixed-location businesses. They have reached a point of regulatory overreach and are struggling to survive. Very few corporations will be nimble enough to get out of the sun before they are fried alive.
On top of that, add on the corporate debt and the falling rate of interest and the scale of the problem will, for most, become insurmountable. It will start with a recession, then it will really get bad.