Suddenly, products and services were no longer available. (Not only) Food was hoarded and businesses went bankrupt overnight. Crises like Covid-19 show the importance of a functioning market economy for all market participants, but also for the state community as such and can give previously unknown clarity.
In addition to the loss of tax revenue and the range of products and services, small local companies (SMEs) in particular felt the “loss of the marketplace” very directly. These “small” companies are usually not in the limelight, but provide a large part of the domestic economic output: tax advisors, consultants, coaches, lawyers, IT consultants, stage technicians or even writers “from next door”.
A Free Society Builds On The Understanding of Free Markets
The public marketplace with all its facets, and the potential contact with customers that it provides, is a prerequisite for entrepreneurship and independence.
In crisis the risks of self-employment show themselves in all their existence-threatening ugliness:
- the often underestimated corporate risk (without customers, no sales, means no income, despite ongoing expenses)
- the draining, constant performance requirement, despite illness, family demands, school dropouts, etc. and
- the 24/7 accompanying existential fear, also for family, employees, suppliers etc.
But independence means more than just increased risk.
There is an even more fundamental difference: In order to survive, the self-employed need a very specific, regulatory, practical and also mentally supportive environment. For the self-employed person to be successful, it is not enough to work off his tasks well every day and wait for the end of the month.
The development of the last few decades has brought many new services to a market that already was highly competitive. Mailboxes, email inboxes and apps are under constant fire from companies that are desperately trying to attract attention.
However, even with advertising, customers and sales don’t just come in automatically. While large network providers, electricity suppliers, supermarkets or fashion chains can still advertise their product, small lawyers, tax advisors, carpenters, masseurs or energy specialists can hardly do so. SME need more than just marketing, they need “human curiosity & openness to ” environment.
This environment, this “market place” first of all requires the actual encounter, that is, a physical meeting, albeit with a safe distance. But it also requires a mental encounter: This means intellectual openness and the social understanding that a marketplace is necessary, helpful, colorful and advantageous for all.
It is precisely this openness that is lacking in Europe. Whether for environmental, social, or political reasons: business and market criticism are becoming increasingly popular.
Constant Selling is the lifeblood of a successful (business) venture
A particular challenge for many small companies is the need to constantly present their own services and entrice new customers.
That is a rather tightrope walk for SMEs because nobody wants to be ingratiating or selling. Small or sole proprietorships have no budget to advertise on a large scale and wide range. In practice, what counts primarily is the personal appearance and the business card or website with which the entrepreneur can draw attention to himself and his services.
Europe Has An Ideological Problem With Free Markets
There is space and interest for this personal appearance in the Anglo-American, but also in Asian culture. The search for new business partners and customers is understood as a professional, meaningful and social social activity. Hence, achievement and success is encouraged, if not admired. People agree that conversations and business negotiations mostly lead to mutually beneficial agreements, “deals” are actively sought.
In Europe and especially in the Roman Catholic societies, even the word “market” is already suspect. People are supposed to meet (only) for cultural events or social or at least humanitarian reasons. The basic tenor is often rather cynical: Let´s have the convenience of technological progress, but without capitalism or time-consuming advertising and sales.
You might easily hear people argue: “I don’t need 20 types of yoghurt in the supermarket.” You can hardly explain the background of our economic system but respond shortly: “No, you might not, but we also don’t just want to have to eat your favorite variety.” European can be completely oblivious to the connection between market mechanisms and the variety of services and products. However, for a functioning market and thus for companies, having informed, interested, open and self-determined market participants can go a long way.
As an example of many:
The misconception of the GDPR
The implementation of the GDPR is an example of this misconception about market mechanisms: a potential (private or commercial) customer may not be written to or otherwise contacted by entrepreneurs before the latter explicitly and actively gives his consent.
However, this consent must also not be requested directly, unless the customer approaches the provider of his own volition. This may be justified and work where huge companies can generate desire, brand affinity and demand with appropriate advertising budgets and measures.
With the self-employed IT specialist or consultant, writer, coach or trainer, however, it can be safely assumed that practically nobody will ask for advertising brochures on their own. With the GDPR in place, entire industries can be found without any basis for legally addressing new customers with economically justifiable means. At the same time, one can observe that spam mails from dishonest companies have by no means decreased, and mail advertising from large companies also seems to have hardly decreased.
Do entrepreneurs need personal contact to survive? You bet!
Now, as the economic fallout from the shutdown is making itself felt, something is being written about local marketplaces and the importance of buying at home. People are becoming aware that their neighborhood, their city, their region can only survive economically if the cycle stays in motion.
What does my Freelance Neighbor actually offer?
How often have I seen neighbors and even family members surprised to find out after a purchase that they could have bought the same products or services directly from their cousins, classmates or friends (and on the same or better terms)!
Because selling in person is by and large taboo in Europe, the fitness trainer bites her tongue at parties rather than selling her achievements and courses. There is always the danger that she could appear intrusive or even a salesy. At the next meeting, however, it turns out that the woman you got along so well with at the party has booked another sports coach directly in the fitness center.
Is Online Marketing the Answer?
The only channel left for small businesses is almost unaffordable online advertising. But here a recent experience in Vienna/Austria shows the widespread hostility towards advertising and entrepreneurship, despite all lip service. If you really wanted companies, you also have to allow them to actively offer themselves and their products.
If a small company like mine is willing and financially able to place a paid ad, it should not have to think twice about its offer for fear of being accused of advertising too aggressively!
Even Online Marketers are worrying about being too salelsy!
This, however, is exactly what happened when we tried to market one of our books (this is the page we wanted to link to, judge for yourself) via an online advertiser dedicated to EPUs and boroughs in Vienna. The answer from the online marketplace we received?
“The presentation [of this CD box, note A] was a rather misleading sales page for me.”
Viennese Online Marketing Agency, (co)financed with public funds
Our paid ad was declined for reason of being too aggressive!
It sounds like a mockery that the same “highly moral” agency is still tapping public funds from the Vienna Business Agency in order to support SMEs in the Grätzl. With this moral arrogance and fear of selling, we in Europe don’t need to worry about competition from Asia or the U.S.A. We are already finishing our companies ourselves.
Mit dieser moralischen Überheblichkeit und Verkaufsangst brauchen wir in Europa keine Sorge vor der Konkurrenz aus Asien oder den U.S.A. haben. Wir machen unsere Unternehmen so schon selbst fertig.
We need a European way forward
If, as a society, we seriously value freedom to shape one’s profession and life, we need a society that values its elements such as the market, advertising and the culture of supply.
This is by no means difficult to attain, but the change must take place in the mind!
- To do this, school teachers need to be required to know and understand market mechanisms personally.
Internships in small companies with corresponding customer frequency should become a compulsory part of the pedagogical curriculum in teacher training.
- Schools should incorporate projects that foster marketing and selling products or services.
Our children are sent out onto the streets to beg for Churches and Caritas without hesitation, but buying fruit themselves and selling fruit juice for pocket money at the school festival is rejected as being too profit-oriented. Instead of focusing on the acquisition of grants and donations, the mechanism of supply and demand should be experienced and learned.
- Decision-makers, especially in politics, should have felt the rough wind, especially in the sale of a local SME, for at least a certain time before their parliamentary representation.
Last but not least, it´s time in Europe to seriously and honestly grapple with the question of how much freedom we really want for ourselves and our children. It has become all too easy and socially acceptable to denounce the mistakes of capitalism.
It should be at least equally appropriate and socially acceptable to name the advantages and freedoms of capitalism. If we want a creative, sustainable, free and entrepreneurial Europe in the 21st millennium, we need to rethink and strengthen a society that values entrepreneurship with all its facets. Better to tackle the above steps today than tomorrow.