The business world is changing. Young entrepreneurs are operating in an entirely different kind of economic environment than previous generations, and the businesses that millennials found reflect that. The reach and efficacy of small businesses have changed profoundly in the last several decades, and today’s small business ecology has different and more nuanced needs than the startups of yesteryear.
Millennial businesses are more globalised than ever before.
The primary engine of change isn’t some inherent difference in millennial entrepreneurs, but rather the effect that globalisation is having on small businesses. While the internet has been around for a long time, the technology is only now maturing to the point where we can comfortably and inexpensively work with someone on the other side of the planet in real time as easily as if they were in the same building. More importantly, startups now have relatively easy access to production materials, labour, and markets from all over the globe.
Traditionally, startups relied on relatively local labour pools, local materials, and local markets. Because of this, large competitors could easily outclass them. Millennials have changed the game, and are now challenging the dominance of big businesses. However, doing that presents new and unique financial challenges. To help them tackle these issues, financial institutions like Fifo Capital work hard to understand the challenges that 21st century entrepreneurs face.
Small businesses have to compete globally
Just a few decades ago, most of the products we bought and consumed on a regular basis were produced in the same area, or at least the same country in which we bought them. Very few products would have been imported, and those that were would have been made by very large businesses with enormous economic power. Consumers had to choose from just a few brands, all of which likely operated in similar conditions in the same general area.
Today, almost every business competes on a global scale. A costume designer in Melbourne might lose business to an enterprising small business in California or Hong Kong, or a small brewing company in Auckland might well make a killing exporting beer to Portland and Seattle.
To be on the winning side of this struggle, businesses need to be able to access funds to import and export resources and products. Small businesses don’t generally have the budget to proactively ship goods across the globe, so institutions like Fifo offer free standby facilities and stock loans that can be accessed to take advantage of these kinds of opportunities immediately when they come up.
Businesses need to be able to transact internationally
In the past, small and medium sized businesses didn’t have to deal with the same challenges in making everyday transactions that exist now. Buying, hiring, and selling all over the globe means making a large number of international transactions, which traditionally come with lots of extraneous fees. Wiring and exchanging money across borders is expensive, and it can severely impact a business’ profit margin, and their competitiveness in the long run. Big businesses with enormous budgets are more able to absorb these fees, which traditionally gave them an edge over smaller ventures.
To help businesses manage these costs, specialised foreign exchange services like HiFX allow businesses and individuals to exchange and send money all over the globe without incurring high (or sometimes any) fees. Big businesses also benefit greatly from these types of organisations, but it’s most significantly a boon to SMEs who otherwise wouldn’t have the financial bandwidth to operate internationally.
21st Century startups need 1:1 service at the bank
Because business is getting more complex for smaller businesses, millennial entrepreneurs can’t compete globally if they only get second-class treatment at their financial institutions. Traditionally, businesses that don’t generate millions of dollars in revenue every year are left with cookie-cutter customer service and miles of red tape that they need to navigate on their own.
This presents a problem for traditional banks, because these small businesses make up over 30% of Australia’s GDP, and over 25% of New Zealand’s GDP. They’re large organisations that can’t afford to micromanage small accounts. To fill this niche, more flexible franchised financial institutions like Fifo Capital have emerged to offer big business treatment to everyone. Not only do we offer a variety of innovative solutions for clients, we work with them to determine what course of action will be most beneficial to them and their business. Best of all, businesses can get their hands on the funds they need within 24 hours of applying, instead of waiting weeks or months at their primary bank.
Today’s businesses operate in a new world, and they need new and innovative solutions to help them meet the financial challenges this world offers them. By taking advantage of these new tools, businesses can compete with both their peers, and their larger, better-established competitors. Give us a call today to learn more!