I've been on my entrepreneurial journey since I was 15, and I'm still going strong. According to the European Union, 99% of companies are small and medium-sized enterprises (SMEs). I believe the actual global figure could be even higher.
A while back in Finland, people thought if you owned a small business, it was because no one else wanted to hire you. Maybe it was because of your skills, maybe you were too proud, or maybe you just didn't work well with bosses.
Fortunately, entrepreneurs are now often seen as heroes. Starting a business is cool again, and schools, universities, and even kindergartens encourage youngsters to become entrepreneurs.
The Growth Illusion
We can't ignore the fact that what we really need isn't more new entrepreneurs, but more entrepreneurs who are growing their businesses. When a new company starts, it often costs the country money, taking advantage of public grants, tax benefits, and other supportive incentives.
Only when the company begins to make money can it start to pay this back. And if it can hire people, it can give back even more. That's why, from an economic perspective, it's better to have more growing companies rather than just more new entrepreneurs, self-employed individuals, and freelancers.
Central banks have been known for injecting money into economies for over a decade. This prolonged period of financial easing has led to certain sectors overheating. For instance, we've seen significant growth in housing and industries operating on razor-thin margins, thanks to easy access to cheap capital.
With the recent rise in interest rates, the cost of capital has increased, demanding higher profits and tighter control over expenses. Many companies that expanded during the cheap capital era have gone bankrupt.
Scaling Up in a Tight Economy
Consider this: those 99% of small businesses, content in their local bubbles – be it a small-town diner, a downtown florist, a suburban gym, or a rural bookstore. They're not on track to become the next Facebook or Tesla. But should they even aspire to that?
Here's where it gets interesting. What about the next generation, the entrepreneurs' kids? Are they destined to inherit these one-person ventures, trapped in an endless cycle of hard work with minimal rewards? Or could they revolutionize these small-scale businesses?
Revolutionizing Small Business: The Path from Local to Global
Imagine if these young minds started rethinking these businesses not just as a means to pay bills, but as potential franchises, systems that could be replicated and scaled. What if they turned into mentors, sharing their knowledge with other business owners?
They likely have a wealth of 'silent wisdom' – efficient practices, energy-saving methods, resource management, and ways to achieve more in less time, perhaps even utilizing AI.
To do this, they need to embrace two critical changes:
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Using English for communication, and
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Being bold enough to share their unique insights and experiences.
This isn't just about small-scale growth but a potential revolution in how we view and expand local businesses. The question is, do they have the courage to break free from tradition and take the leap?