Chapter 12: The best cities for small business

http://www.financialpost.com/small_business/story.html?id=892376


Summary
According to recent analysis, big cities are not a good place to start a small business. Entrepreneurs are more successful in smaller cities than in the larger ones. Even though a lot of Canadians are concentrated mainly in the large cities, small businesses in these cities seem to be weighed down by the many taxes that the city places on businesses. “There are secrets to success, and the more you see start-ups and small businesses operating in your community, the better off the whole community is going to be,” Ted Mallet, CFIB’s chief economist says. CFIB (Canadian Federation of Independent Business) has set up a list of criteria that they evaluate the cities on. On that list of strong entrepreneurial success cities include a lot of cities from Saskatchewan, Alberta, and BC. It appears that Western Canada is better off than those cities in Eastern Canada.

Connection
In chapter 12, we’ve learned about cash discounts and allowances which could be applied to this situation. In determining which cities would be a good place to start small businesses, we can not neglect the actual business techniques that the owners use. Even if the city is a very suitable place to start a small business, the owners still have to come up with clever ways to attract customers. By having items on sale once in a while, customers are more likely to come into the store and have a look around and perhaps purchase something. When an item is on sale for 20% off, the bookkeeper has to include it in their books using the new account that we’ve learned – cash discounts and allowances.

Reflection
Sometimes small businesses can’t afford to have items on sale because they already don’t make a lot of profit off the products, but then there are times when they have to compete with the larger organizations that they just have to sell their items for less. Especially since the economy is going downwards, it’s a smarter decision for businesses to quickly sell whatever inventory they have at hand so they have more capital which will help their business survive the hardship. Having read this article, I’ve realized that it’s very true about how small businesses tend to not be able to survive the bigger cities. Because of the large competition in large cities, small businesses aren’t as likely to be able to survive.