Monthly Archives: August 2016
As a small business owner, you may have dreams of your company becoming the next Amazon or Apple, or you might be content making a splash in your local community. Either way, you may wonder how you can make it against large companies that seem to have the people and resources to do the things you can’t do. Just because your business is small, that doesn’t mean you can’t think big. Below are four ways you can grow your small business without a big budget. Find your niche Big businesses tend to appeal to wide, general customer bases. As a result, customers with more specific needs are left out, because there’s not enough profit potential for a big company to cater to those customers’ needs. However, a small but eager customer base can be perfect for a smaller business.
“Step No. 1 is to recognize that a larger business is not necessarily your competition. Ask yourself how you are different,” Joanne Chang, owner of and chef at Flour Bakery + Café and Myers + Chang in Boston, said in The Wall Street Journal. Identifying and focusing on your niche also lets you work to your strengths and develop market expertise and loyalty. “Many are afraid to eliminate part of a potential market,” James Clear, founder of Passive Panda, wrote in an American Express Open Forum blog post. “It can seem scary, but you need to focus on your core customer if you want a clear path to growth.” Danielle McPhail, founder of eSpec Books, said she has seen this in the world of small-press publishing. “When you diversify too much when you’re small, then you can’t maintain your market,” she said.
“I’ve worked with a lot of small presses, and when I see them self-destruct is when they start making imprints to reach different markets and they don’t have the support structure to reach that different demographic.” Put your efforts into innovating One way to innovate an industry is to find a problem that most businesses are ignoring. “Don’t be afraid to solve the hard problems that everyone else avoids,” wrote Clear. “There is a lot of money to be made when you’re the first person to fix something.” “Because you have passion and because you can tap into agility, you have a perfect mix to better innovate,” Pam Moore, founder of Marketing Nutz, wrote in a blog post. “It doesn’t require an intense board meeting to kick off an idea for further research. You can simply plan it and do it.” When you innovate, be sure to keep in mind your market and customer base. McPhail encouraged small business owners to diversify within their existing product or service scopes but warned against branching out into completely different demographics.
Seasonal-business owners have a short window to earn money, and those funds have to last them all year. You might be wondering how these businesses make that work, but successful seasonal-business owners have tricks that ensure their seasonal businesses earn money all year long.
Whether you’re gearing up for your holiday season peak or slowing down after your summertime rush, here’s how you can keep your business profitable throughout the year. Minimize and manage off-season expenses The first and most important step in managing your finances is getting a good understanding of your expenses in the off-season and then thinking of ways to minimize them, said David Goldin, president and CEO of business financing provider Capify .
Goldin advised reducing your business hours and days, lowering your staffing requirements, and cutting back your marketing and ad budgets to save money. You can also renegotiate some of your vendor contracts and recurring services, to see where you can scale back, he said. Find natural ways to repurpose your equipment Gary Fouts, owner of multiple seasonal small businesses, said the best way to keep a seasonal business profitable is to operate two or more businesses whose off-seasons complement each other, and that can share equipment. For example, Fouts runs a landscape management company, an outdoor lighting company and a Christmas lighting add-on service, all of which drive referrals for one another. “Another way to extend billing and revenue is to set up multimonth payment cycles to clients, and encourage early bookings through incentives,” Fouts said. Fouts also noted that his Christmas décor business has many other purposes outside of the holiday season, which helps carry his success throughout the year. “Several weddings use twinkle lights in their décor,” he said.
Seek out opportunities with businesses that have longer seasons Toffer Grant, founder and CEO of prepaid business Visa provider PEX Card, recommended looking through your inventory at the end of your peak season to see if anything can be sold off. “A business has to determine [if] it is worth keeping money tied up in gear and supplies that sit around until the following season,” Grant said. “Recoup some of the money by selling materials for what was paid, or even at a small loss [to] cash out those items.” Fouts said his objective is to get the inventory as close to zero as possible before the end of the season.
“We’ll run a special on whatever color or type of lights we have in excess, sell off inventory to franchisees in the network or other companies,” Fouts said. “If, at the end of the season, there is still an excess of a certain color or type of lights, we’ll store them during the off-season.”
Smart businesses know that it costs less to retain existing customers than it does to acquire new ones. That’s why so many brands are focused on loyalty marketing — campaigns designed specifically to bring in repeat business and referrals. But it’s not enough to just send out a generic, “Hey, come back!” email to previous customers. In today’s market, you need to personalize your loyalty campaigns to fit your customers’ needs.
“Loyalty marketing needs to be personalized because, at its core, you are asking for a deeper relationship with your customer,” said Jason Greenspan, CEO at tech hygiene company WHOOSH!. “Would you ever think of giving a loved one a birthday cake saying, ‘Happy Birthday, Customer?’ Of course you wouldn’t.”
There’s plenty of proof that personalized marketing works, too: Recent research by Virtual Incentives found that 56 percent of consumers surveyed feel personalized incentives improve their consideration of a brand, and three-quarters said these incentives make them feel respected as a consumer. Another survey by Accenture Interactive revealed that 65 percent of customers are more likely to shop at a retailer that remembers their previous purchases.
However, there’s a fine line between personalization and privacy invasion, and brands need to be aware of how they’re coming off to consumers. Sixteen percent of those surveyed by Virtual Incentives described personalized offers as “creepy,” and a quarter said they felt these efforts are a violation of their privacy.