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Finance , Small Business , Smart Advice – January 17, 2019

Interests of Big and Small Businesses Are Sometimes at Odds

Photo: Tsezer/Getty Images

The issues facing big and small businesses are not always the same. 

Big businesses generally have greater infrastructure and management depth that allows them to delegate specific issues (like labor law, contracts and taxes) to employees specifically trained to handle those issues. Smaller business do not have this luxury. 

Bigger businesses normally have a longer history and stronger finances, both of  which provide greater access to capital and results in more financial security. Smaller businesses generally need to focus on day to day cash flow and often struggle while raising capital. Lenders tend to prefer larger loans to big businesses and shy away from smaller loans to small businesses. After all, the smaller loans often come with a higher risk and a lot more background work. 

Small-business owners juggle many issues a day and often need to make quick decisions without the support of anyone else in the company. This urgency to make quick decisions and move on adds a lot of stress to an already stressful job. The small-business owner doesn’t have the time or resources to perform detailed research nor lobby to make the business climate better. That’s why small businesses need organizations like the various chambers of commerce and trade groups in Hawaii.

Larger businesses do have more resources to research issues and lobby for change, but their goals are sometimes at odds with what smaller business want or need. For example, bigger businesses such as banks, hotels and large retailers do a lot of business with unions and tend to support their activities. Smaller businesses do not and are often harmed by union demands. Rail is another example: Larger businesses benefit from rail construction and related disruption, partly because it drives more business to them at the expense of smaller businesses. 

If you are a small business, pay attention to what larger businesses are focused on to change Hawaii. You may find these changes do you more harm than good. 

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