Yes, you're right. It's also easier to run a business where payroll is the last supplier, and if there's no cash we all just get short paid, instead of the case where employees are paid first.
And I get the MBA effect especially as we see that segment in the business news all the time.
But most businesses aren't big. Most don't have so MBA. Most don't make wild profits. Most are happy if they make it through the month, build up sufficient reserves, grow production over time and so on.
Profit is not just "extra money for owners", its also the part that provides income security in tough times, that buys new machines, that covers over the slow seasons, that secures cheaper supply lines and a million other things.
It creates resilience against the ever changing nature of the world. A business that runs at break-even are one tiny event away from closing their doors.
Squeezing every penny is not always about wild profits. Sometimes it's just keeping the lights on.
Careful there. While it may be true that there are more than 10 tech companies (MAANG x2) that doesn't actually reveal a lot about the skew of the landscape, as 'most' in this case means by absolute number and not weight.
Beer is no different. There's better than a 9/10 chance that microbrew you're holding is owned by one of two companies - Miller Coors or AB Inbev (and of the two it's far more likely to be Inbev). At least, this was the case a few years ago when I was still paying attention.
If you were to count by market share or even heads employed, I think you might find that "most business" is goliaths, not davids, and in this story, david loses.
Perhaps if we had kept antitrust solid it wouldn't be so hard to keep the lights on.
There are certainly market segments (like say cars) which have consolidated to the point where there are a handful of players, and they're all big.
Not yet mention that "big" has a different definition everywhere - I'm going to suggest an arbitrary limit of > 500 employees.
Again, it depends where upu live but if you look gard you'll see most businesses are small. Corner stores. Factories. Plumbers, electricians, car repair, and so on. Franchises.
There are not just "more than 10" tech companies, there are tens of thousands of them. I have 3000 tech customers and they are 99% small (by this definition) and I operate in a market so niche it would make you eyes water.
The vast majority of businesses are tiny. They are not on any stock exchange. They have < 10 employees. You will never read about any of them anywhere.
Beer brewing is very consolidated, but even there micro-breweries are gaining traction. Chances are though that if you bought your beer in a national chain its not a micro brewery.
> Profit is not just "extra money for owners", its also the part that provides income security in tough times, that buys new machines, that covers over the slow seasons, that secures cheaper supply lines and a million other things.
This seems like an old-fashioned view on the nature of business. It may have been true 50 or 60 years ago (at least) but I think it's the exception rather than the rule today. Cutting loose your employees is what provides income security in tough times (for the employees not cut loose). Loans buy new machines. If you have a couple slow seasons you'll simply be bought by some private equity firm, loaded up with debt, then driven into the dirt along with any pension obligations etc., the firm may have had.
I see your viewpoint posted a lot. There's certainly a cynicism that comes from following the news, or seeing listed-company-news as applying to all companies.
Your view is likely biased towards the US though - most countries don't have a PE industry. Also most businesses aren't attractive to PE in the first place.
You need to look past the headlines, past the news. As you drive consider each building you pass. That mom-and-pop store. That corner franchise. That Indian take-aways.
Most businesses aren't Apple or Google. Those are the exceptions, and despite their vast numbers they are a drop in the bucket of the n billion people employed world-wide.
Yes it's an old fashioned view on the nature of business. But it's also the reality for millions of small businesses today.
Late stage capitalism is eating the heart of the US yes, but fortunately it hasn't spread to most places yet. And even in the US good businesses do well, if you care to see them.
My view is biased toward to the US because that's where I live, yes, but also I think as the epicenter of global capitalism it sets the pace for the other, lesser, capitalisms around the world.
You're right that, by the numbers, there are a lot more small companies than large companies. But it's the large companies that steer our political and economic institutions. And, in many or most cases those smaller companies will have to compete with the larger ones, and certainly rely on at least some of them for their operations.
And I get the MBA effect especially as we see that segment in the business news all the time.
But most businesses aren't big. Most don't have so MBA. Most don't make wild profits. Most are happy if they make it through the month, build up sufficient reserves, grow production over time and so on.
Profit is not just "extra money for owners", its also the part that provides income security in tough times, that buys new machines, that covers over the slow seasons, that secures cheaper supply lines and a million other things.
It creates resilience against the ever changing nature of the world. A business that runs at break-even are one tiny event away from closing their doors.
Squeezing every penny is not always about wild profits. Sometimes it's just keeping the lights on.