I’m not a financial expert and therefore my opinion of the current economic situation is the quintessential man-on-the-street view. Sure, I don’t understand all of the ins and outs of the market or the long term effects of a lot of the things that have taken place in the last year, but I do feel that economic laymen like me have a very important vantage point of this whole crisis. From up here in the nosebleed section, we have a crystal clear view of all of the players on the field. We see every missed call and fumbled ball. The players on the field may be doing all the work, but we get to see the big picture, like who’s playing great and who needs to retire.

I bring this up, not to criticize any certain businesses, or banks, or political parties, but simply to point out that there is one serious problem with world-wide economics right now: the large corporation. I know, there are a lot of benefits to large corporations and a lot things that they can do for society as whole. I’m not arguing that large companies are evil, only that they are not as effective as small business. I am arguing that it’s people like me and the readers of this website that are going to change the economic crisis for the better. It’s the small businessman and the college dorm startups that are going to bring about few more years of economic stability.

Why is that? For 3 good reasons:

1. Agility -

small businesses are fast and agile in changing times. They can spot trends occurring and act on them fast, be they good or bad. They can shift when they need to with relatively little effort. Large corporations have rules and bi-laws and channels of communications. You have to get the approval of 10 to 12 different people to make even mid-level decisions and if even one of those people disagrees you, or is simply in a pissy mood that day, the company is stuck floundering in a changing marketplace that very quickly passes it by.

This wouldn’t be so bad except that when large businesses suffer, so do consumers, as there are usually very few products that can replace those of large businesses. Small businesses also tend to be able to avoid the traps of tradition. If you’re the CEO of Macy’s there’s a lot of tradition on your shoulders; you have something to live up to. You will be less likely to go out on a limb and take a risk for fear hurting your brand or destroying over 100 years of work. It’s an understandable fear, but not one that leads to a healthy capitalistic market.

We need small companies that are going to be able to not only read current trends, but react to them quickly enough to provide the services and products required by society. With fewer corporations, we might not have found ourselves in the trouble we’re in right now. Economic downturn is inevitable, that’s just the nature of capitalism, but I firmly believe that small businesses could’ve reacted quickly enough to do away with detrimental practices. They also would’ve been less likely to participate in those practices in the first place, but I digress.

2. Hunger and Competition -

small business owners have to stay hungry, they have to have Rocky’s Eye of the Tiger. There are so many other small businesses out there that are doing the same things and providing the same services, small business owners have to constantly struggle to be the best; to do something bigger and better. This competition is great for the consumer because they are given a wide variety of products and services to choose from as well as products that they can be sure are the absolute best available.

The economy doesn’t need a handful of large corporations that control 90% of the wealth and business in the country. It’s detrimental to the consumer and to the market. There isn’t enough money flowing back and forth and these sole providers can charge whatever price they want, as their product or service has no equal replacement. Look at oil companies for a prime example.

3. High Turnover Rate -

I know it may not seem like it in the face of the federal bailouts that have occurred and all that the U.S. government has said on the subject, but businesses dying off is actually a good thing. Small businesses are notorious for dying quickly. Nearly 50% of small businesses don’t make it past the five year mark. I know that on the surface that sounds bad, but you have to remember that a large factor in the death of these businesses is that they didn’t provide social value in a large enough quantity to warrant the public keeping them around. They were largely useless and capitalism tends to be quick to let you know of your uselessness. We must also remember that this number doesn’t mean that these business owners simply faded into obscurity with their tails between their legs. It doesn’t reflect the amount of small business owners who went out and simply started another company.

High turnover is a good thing because it’s like weeding the economic garden. We tend to run into trouble when we keep around businesses that should have failed, a la the bailout. Sure, we would’ve had harder times if many of these businesses had failed, but the economic long run would’ve been far healthier. If you have a hard time with the concept of healthy turnover, just think of these small businesses as the cell in your body. On a minute by minute basis, your cells are dying and being swept away and replaced by brand new, healthy cells, which will in turn die off within a few months or years. If this constant replacement didn’t occur, you’d be stuck in a cesspool of dead and decaying cells, too sick to do their jobs and standing in the way of newer, healthier cells that could save you.

This is the economy as it stands today.

I’m not advocating the overthrow of large corporations, that wouldn’t lead to a healthy market either. We can’t simply toss them out and think it will solve our problems. Large corporations aren’t actually the cause of the problem, they are simply a symptom. What we need to start focusing on is the building up of small businesses that can actually challenge the way that large corporations do business. The forming of a new marketplace that can force these large companies into becoming more agile, progressive and competitive.

We need the entrepreneur and the small businessman more than ever. When I started Daniel Roach LLC, there were people who thought I was crazy to try to start something right now. “People aren’t buying anything!” they said. “The economy is bad, even big companies are suffering right now. If they can’t survive, neither can you.” I haven’t listened to them and I don’t plan to. The very things that are killing large businesses are also the very things that can keep my little tugboat of a company alive.

I encourage all of you self-employed and self-empowered readers out there to rise up and start your small businesses. Now is the best time, as the competition is thin at the moment and everyone will underestimate you. We need you out there on the field playing with and challenging the big players. Let’s go score a few goals for the home team and see if we can’t change some things in this world.