The short answer is this: we don't really
know. The long answer: a combination of factors, most of which are out
of the control of small business operators.
Tectonic change in technology would perfectly explain why mechanical
typewriter or video recorder repair shops no longer exist. Lack of
operating capital is another major reason for going under, as well as
the burden of debt which can choke even a once thriving operation.
Recession or a war are more drastic factors. But all these reasons are
as obvious to the business owner as they are to the outsider.
However, as a third generation small business owner myself, my main interest is in those less obvious factors which make a small business go out of business.
And just because those factors lie beneath the surface, appear
infrequently, or perhaps don't really affect daily operations, they are
commonly overlooked until it's too late.
The more we study Australian pocket watches and the porcelain dials that
proudly bear the names of once thriving businesses, it's harder to
ignore the rather sombre fact: most of those businesses are gone,
Yet somehow, a few of them are still around. Those watchmakers and
jewellers have not only survived but prospered, remaining both reputable
Is there anything to learn from watchmaking history? What is the secret of success and longevity?
Or perhaps, should we rephrase our question: How can (small) business stay in business?
Here are just a couple of my thoughts, refined over the years, but still a work in progress:
No matter what we call ourselves, what we specialise in or what kind of service we provide - we are all in the retail business.
Our core business should be selling ourselves and our business
philosophy. Only then, our products and services. Retail is tough,
competitive, cut throat business.
I have seen too many shy professionals, reputable experts in their
field, who are overly introverted. Watchmakers are the perfect example
of such retail-averse operators. They love to be 'discovered'
while tucked away from passing traffic. Yet watchmakers and jewellers
who have 'made it' are those who are always striving for the best
exposure they can get; a shop at the most prominent location. For them,
selling is not a dirty word but an art form which they have mastered to
2. Direct engagement with customers is the only way to engage
This means two things: first, no subcontracting. If I am to repair a watch (or make a ring or build a house) I'll make it for YOU,
the paying customer, not for the middleman. Not just because I'll make
more profit (cutting out the unnecessary middle man) but because I want
to be YOUR builder and build my reputation with YOU as a result. Such a
relationship is long lasting, profitable and will bear fruit in many
decades to come.
The second rule of engagement: TALK to your customers. Whether it is in
the form of advertising, engaging in a meaningful conversation over the
counter or writing a daily newsletter - disengaged businesses that are
out of sight have no future.
I cannot tell you how frustrating it is to deal with some of our
suppliers. While we have no choice but to place our orders with them on
regular basis, they are so disengaged that it is just a matter of time
before they'll be completely wiped out. One particular spare parts
supplier has changed hands 3 times in the past 25 years. The only reason
they are still in business is for the monopoly on the supply of certain
parts. In 25 years I have not received a single 'we appreciate your
business' via email or phone. Not once. We spend thousands of dollars
with them every month, but we could easily spend twice more if they just
said 'thank you' and delivered parts promptly.
3. In order to stay in business, small businesses must grow
For the good part of 30 years, my grandfather and my father - both
watchmakers - operated two watchmaking businesses. They ran two separate
shops, trained apprentices and employed staff, all while competing with
each other! That's right: instead of working together, they worked against each other. This
is probably the most disheartening reality of my youth and the reason
why I hated watchmaking for so many years. One can only imagine what the
two of them could have achieved if they had worked together,
complementing each other.
My grandpa was an excellent salesman and a very competent watchmaker.
However, he couldn't save money if his life depended on it. My dad was
always keen to talk, debate, express his own opinion and was very much
liked by customers for being a 'down to earth man'. At the peak of his
career, mechanical watches were replaced with cheap battery operated
ones and he completely missed the trend. He is still a good watchmaker,
but an awful salesman, and totally incapable of hiring and retaining
employees. So to this day, at the age of 79, he still runs a one man
show. He is in love with his business style, and so is his competition.
I am trying to learn from their mistakes. For us, slow but steady
ORGANIC growth is the only way forward. Dealing with apprentices and
assistants is not easy, but the objective is to create an environment
where young people with different sets of skills will work together, in
harmony, for YOUR benefit.
Josh can machine anything, he is technically much smarter than me and a
better chess player. His mind is a mind of a practical engineer, a mind
which works fast. Andrew is a wonderful, respectful, appreciative,
reliable and incredibly honest young man. He is a fast learner, firmly
on his track to becoming one of the best watchmakers AND machinists in
Sydney. Gemma is tower of strength with fantastic attention to detail,
impeccable customer service and amazing management skills. She makes my
life easy and she is simply irreplaceable. Young Michael, who has only
been with us for one year, has a true and very rare gift of knowing the
value of everything. If I drop dead tomorrow, he should be in charge of
buying and selling. And Emily from Liverpool - who recently joined us
and will only stay in Australia for a few more months - is contributing
like there is no tomorrow. I can only imagine what the future will bring
for a small team dedicated to a common goal: to serve you.