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WHY AUSTRALIAN SMALL BUSINESSES FAIL



By John Ray

Let me tell you about the time in 1990 that I tried to buy an above-ground swimming pool. I was not bargain-hunting and I was not looking for anything unusual. An ideal customer, one would think.

What I wanted was an 18' circular pool (despite metrics having been official in Australia for a long time, pools still seem to be sized in feet) but the first shop I walked into said that they only stocked the 15' size. I left them to it.

The second pool shop I walked into was staffed by a lady who said her husband was away that day and she could not give me any prices I left her to it as well.

The third pool shop I walked into had one salesperson there and queue of about eight people lined up to buy chlorine etc. I figure that it would take around half an hour before I even got to state what I wanted so I left that lot to it as well.

The fourth shop I walked into did sell the size I wanted, served me promptly, had one installed out the back to show me what it looked like and could arrange installation next week. I therefore presented my credit card and they were promptly $2,000 richer.

But what about those other three shops that had seen the same $2,000 walk in the door and promptly walk out again? When businesses spend millions on advertising to get a customer through the door what can they possibly have been thinking of to be (apparently) completely unconcerned about a "big ticket" buyer walking in and then promptly walking out again? Why was only one out of four firms able to show basic competence at what they were doing?

Before I answer that, let me scotch any thought that pool shop owners must be particularly dumb. Computer people are generally held to be pretty bright but my experience with computer shops has left me wondering.

Also in 1990 I had been told that Amiga computers have very good software for helping pre-schoolers to learn to read and write etc. So I tried to buy an Amiga for my three-year-old, didn't I?

Naturally, as computers are complicated things, I wanted to see the use of the software demonstrated before I bought. So I went into the computer shop of one of our better Department stores and asked for a demonstration. I found that they could indeed demonstrate two teenage-type games to me. They could not, however, demonstrate anything else as "We cannot open the packs".

So I sought out a specialist computer store didn't I? Now I already had an IBM-type computer so I knew this was not likely to be a joyous experience. I seem to be invisible in such shops. As far as I can see, in computer shops everyone always seems to be on the phone and customers in the shop can just go hang. And those phone conversations are long. They just seem to be so much more interesting than the boring business of actually selling to a customer. Sometimes there is a receptionist who is not on the phone but she knows nothing about the product and her sole function seems to be to ask people to wait.

So I walked into a rather big example of such a shop at what should have been a quiet time of the week in the hope that maybe there would be one person there who was on the ball. But no, I turned out to be invisible again.

This time, however, the worm turned. I wandered out the back to what seemed to be the boss's office and asked the man there (who was of course, on the phone), "Is anybody selling here?" His response "Just wait out the front and someone will serve you". I said, "But have already been waiting for some time and no-one has said anything to me." His reply? "What do you want?" I said, "I want to buy a Amiga." "Don't sell them", he then said and returned to his phone call with evident relief. He did not want to be bothered with piddling $1,400 sale, did he?

So next I went to a small computer shop in the hope that a small firm might be keener. Again, of course, I was invisible until asked someone if anyone was selling here but I did then get some attention. Yes, he did sell software for pre-schoolers and the Amiga was indeed ideal for that but he had no software for pre-schoolers at all in stock at the moment so try him again next week. So I still did not manage to buy an Amiga.

I eventually saw a small classified advertisement in a Saturday paper by a man offering home deliveries of Amigas. And he delivered it promptly too. He turned out to be a Hungarian immigrant.

Now the episodes I have detailed are typical of my experience of Australian small business. I could detail many more such episodes and so, no doubt, could most Australians.

One way in which I might be a little different, however, is that I have been to both Hong Kong and California. I know what businesslike small business is like. In Hong Kong, and to some extent in California, the retailer seems to think that it is his/her job to ensure that you walk out with less in your pocket than when you walked in. And he/she does what it takes to bring that about. He/she actually makes an effort either to give you what you want or convince you that you want something else. The retailer actually gives the impression that he/she wants to make a sale! There are no invisible customers in Hong Kong.

But Hong Kong is closer than you think. When I take the train into Sydney city of a morning, it is not uncommon for around half the faces in the carriage to be Asian. And that is already beginning to show up in the shops.

Some time ago I went into a computer shop run by Asians. Guess what? Everyone was on the phone. But there the similarity with other computer shops ended. As soon as I walked in, the person nearest to me spoke something into his phone that must have been the Cantonese equivalent of, "A customer's just walked in. Call you back.", and I was promptly served. Hey! I wonder if that guy sold Amigas?

And everyone knows what it is like in a Chinese restaurant. You no sooner sit down than there is a menu in front of you. You have no sooner made your selection and closed your menu than there is someone by your elbow waiting to take your order. In other restaurants it can take half an hour just to get a menu! I wonder why I mostly eat in Asian restaurants?

At any event, it has already happened in Britain. Polite brown people from the Indian sub-continent of Asia now seem to run almost all the small businesses in Britain -- from laundrettes and grocer shops to Post Offices, small hotels and electrical goods shops.

Australia's Asians might come from a different part of Asia (East Asia) but they will do a similar justly deserved takeover in due course. "Old Australian" businessmen will just end up at the beach and on the dole, where they generally seem to belong -- modern-day Pacific islanders. Australia is, after all, the largest Pacific island. But it's their choice. Perhaps even a reasonable choice in a welfare State.



Article posted by John Ray, May 11th., 2003



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