Caveat emptor
Mom-and-pop businesses via technology are a great idea, but require scrutiny by the patrons.
USA Today features data showing the number of mom-and-pop businesses is soaring on a wave of new technology. Personal computers have made a huge impact in this field. In an age of amalgamation and the elimination of many small businesses, thatâÂÂs generally good.
But let the potential customers beware. The news can be good and bad.
Reportedly, more than a million grocers, tax-preparers and other microbusinesses sprang to life in the 1997-2000 period, according to the federal census. That was a 7.1 percent jump to 16.5 million companies, nearly triple the growth rate of all other firms.
Experts see microbusinesses as a key barometer of future economic activity because they can create thousands of jobs at a time when many major firms are cutting employment figures and thousands are left looking for new jobs.
A major rags-to-riches success story: Sam and Helen Walton began a five-and-dime operation in 1945 and it developed into the modern Wal-Mart retailing giant. Wal-Mart now employs about 1.3 million workers. Are other similar success stories being written now?
Says USA Today: âÂÂMom-and-pops are often started by a couple with relatives as the employees, if there are any. Such firms were 70 percent of companies in 2000 Ãi¿½” up from 69.1 percent in 1997.âÂÂ
States with the biggest mom-and-pop growth also have above-average growth in foreign immigrants. Immigrants are more likely to start firms because language difficulties shut them out of conventional jobs. So they create businesses, often stores that serve other immigrants.
But warning flags need to be noted.
Those who are inclined to do business with the âÂÂmicrosâ and the âÂÂmoms-and-popsâ are well-advised to check on their validity and their stability. The potential is there for excellent business operations, but there is also the chance that fraud, mismanagement and misrepresentation can do great harm.
One need only recall the dot-com collapses of recent times to realize that just because somebody has a computer and is adept at using it is no guarantee of soundness. One need only read some Internet exchanges to realize there are a lot of naive, crooked and devious performers in the field.
It would be outstanding if all the so-called mom-and-pop businesses would thrive, boost the economy and alleviate the unemployment problems. But it also is well for those dealing with such people to make sure of what is happening and to realize that some deals that sound too good to be true, probably are.
HereâÂÂs to mushrooming success for technology-driven businesses. The economy can use it. At the same time, look before you leap.

