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This is why so many small and medium-sized businesses don’t use tools that bigger firms take for granted. It’s not that small business proprietors are unusually backward or that good tools don’t exist: distribution is the hidden bottleneck.

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A major challenge facing our SMEs is the lack of adequate working spaces. Even some of the most successful small-scale manufacturers in areas like furniture making, steelwork, and metal fabrication operate in cramped spaces, which restricts their capacity to expand, increase production, and create more jobs. This limitation on space directly impacts their growth potential and ability to contribute further to the economy.

The solution of important problems may be delayed because the requisite tools are not perceived. Or the availability of certain tools may lead to an awareness of problems, important or not, that can be solved with their help.

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Small business have more to fear from government than big business.

Most businesses get zero distribution channels to work: poor sales rather than bad product is the most common cause of failure. If you can get just one distribution channel to work, you have a great business. If you try for several but don’t nail one, you’re finished.

A third way to waste a bottleneck’s time is to make it work on parts you don’t need.” “You mean spare parts?” asks Bob. “I mean anything that isn’t within the current demand,

Furthermore, the drain of a depression upon the reserves of business puts a disproportionate strain upon the modestly capitalized small enterprise. Without such small enterprises our competitive economic society would cease. Size begets monopoly. Moreover, in the aggregate these little businesses furnish the indispensable local basis for those nationwide markets which alone can ensure the success of our mass production industries. Today our smaller corporations are fighting not only for their own local well-being but for that fairly distributed national prosperity which makes large-scale enterprise possible. It seems only equitable, therefore, to adjust our tax system in accordance with economic capacity, advantage and fact. The smaller corporations should not carry burdens beyond their powers; the vast concentrations of capital should be ready to carry burdens commensurate with their powers and their advantages.

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It’s better to think of distribution as something essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business — no matter how good the product.

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All the alleged key causes of SOE [State-Owned Enterprise] inefficiency—the principal–agent problem, the and the soft budget constraint—are, while real, not unique to state-owned enterprises. Large private-sector firms with dispersed ownership also suffer from the principal-agent problem and the free-rider problem. So, in these two areas, forms of ownership do matter, but the critical divide is not between state and private ownership—it is between concentrated and dispersed ownerships.

Small is not beautiful in business. Build businesses that scale. Deliberately establish business models that scale.

Time spent working hard is often better spent identifying where the bottleneck is located.

Working hard on the wrong thing leads to frustration, not progress.

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