You may or may not have seen the newest list of fifteen companies that could fail this year.
Some of the names may surprise you.
Have you ever had a Krispy Kreme, rented a movie at Blockbuster or eaten some pizza at Sbarro’s?
These three once-popular companies are in danger.
The reasons vary. I’m sure some of it has to do with the expansion that many of these businesses took on in the booming nineties, when nothing could go wrong. They grew and grew, they expanded and expanded, and now, like an overfilled balloon, are ready to pop.
While I definitely don’t want to see anyone fail in business, particularly a company that makes such delicious cream doughnuts, I do have to wonder if this decade will be that of the return of mom-and-pop shops.
This question came up on The View last week as well, and it is one that I’ve considered recently.
Are we stepping back in time now, where smaller companies may become popular again? Where the consumer goes to the corner deli to pick up meats and cheeses, the local bakery for donuts, a mom-and-pop coffee shop for java and the shoe repairman’s store to fix the heel that broke – rather than purchasing a new one?
Seems many of these big companies are shutting down shops (think Starbucks, when there is at least one store on every corner in California, it seems!) because they overexpanded. Now business is down and they can’t afford to pay rent and employees for all of those stores.
On the other hand, smaller shops run by locals are cropping up, even in the small town in which I live. A new wine bar was just opened, and so far it seems to be doing quite well. Consumers may not be spending as much as they once did, but they are still spending on things that interest them.
Realtors tell us that now is the time to make a move. Why?
- Rents are low
- People can’t fill the spaces they own and they need to lease them out
- People are looking to purchase items that are lower in cost than before.
Returning to the idea of lower prices and using second hand items is also popular. Sometimes mom-and-pop shops can specialize in these two things when large corporations may not be able to.
On The View it was mentioned that a company like Manolo Blahnik may not cut prices, but then many people – even those who could afford these beautiful creatures ten years ago – are not spending as much cash on a new pair of shoes nowadays. If that is so, where are they purchasing new shoes?
Does this mean that a mom-and-pop shoe store could come into town, open up, offer nice shoes for less, and do pretty well?
Could this be a wonderful time for small business?
Or are we all still too scared, and too in over our heads, to venture out into that world of the unknown?
Perhaps the wounds of lost clients and red bank statements are too hard to forget.
Quite frankly, I’ve seen a downturn in my business, but I am one of the lucky ones: I work from home, I don’t pay rent, and my family doesn’t count on me to pay the bills and put food on the table. Were I in this position, I know that I wouldn’t have the nerve to set out and open the doors of a new company.
When it is slow, as it has been, that’s okay.
I do see it happening, though. Those who are okay financially and who can look forward not just one year but ten years and have some backing may do okay. Perhaps it IS a good time to put out all bets and open the doors of a new brick and mortar business.
Just not for me. (Then again, I’ve never been a risk taker!)
Do you feel that this recession could push some larger companies out of business while opening up the doors for smaller mom and pop companies? Do you feel this is a good time to entertain thoughts of a new company?