How To Make Your Business Stronger
by Tom Egelhoff
Each day it becomes tougher and tougher to hold a business together. There is more competition, higher costs, more laws and regulations, and less customer loyalty. Strong businesses survive tough times and situations, weak businesses do not. Here are some ideas to help you make your business stronger.
Not all of the suggestions offered here can be used by every business. However, the more of each you can adapt to your business the stronger it will be.
Is Everyone A Customer?
I don't know of any business that can say that every individual is a customer. If that were true there would be any need for "target" markets. More and more businesses are looking for their "niche" in the market.
There's nothing wrong with identifying a target market, the problem is the size of that market. The smaller the niche the tougher it is. The pie is smaller and competitors will take a larger piece. Look for ways to expand your customer base. Develop new profit centers within your business.
Are You In Demand?
There are things we want and things we need. Things we want we can usually do without. Almost every home in America has a TV set. Every home in America could probably do without one. Needs however are another matter. There are things in life that are true necessities. We must have them, regardless of how much they cost.
Is there a demand for your product? Is it a necessity? Do people need it regardless of price? If so, you have a winner. If not, is there a way to create a need? The list of absolutely essential products is fairly short. There is a gray area between essential and a want. Try to position your product or service in that gray area. See Chapter Seven: Positioning in your copy of "How To Market, Advertise And Promote Your Business Or Service In A Small Town."
Personnel Costs or Saves
One of the great things about small businesses is they often create jobs. On the other hand labor is expensive if it is unproductive. Almost everyday I pick up the paper and read about some Fortune 500 company laying off several thousand workers. To me the headline should read, "We are really poor managers and others are going to have to pay for our mistakes."
Loyal productive employees are the backbone of every strong business. Encourage, support and develop those who demonstrate loyalty and are team players. Eliminate those who do not. Cut labor costs if you can.
Where Is The Need For Your Product?
The greater the need for your product, the stronger your business will be. The strongest products are those that must be purchased over and over again. In addition, they are also products that can't be easily substituted. The need is so great customers can't do without it. See: "How To Make Your Business Unique."
Cost Of Doing Business
Most new, and some older, businesses fail do to poor management and/or lack of capital. Both fall under the umbrella of "overhead." How much does it cost do business each day? Every business I know wants to operate with a lower overhead. Review every part of your business at least quarterly. Where are costs going? What can be done more efficiently? See "Financial Statements: How To Read And Profit From Them."
Copyrights And Patents: Can I Protect My Idea?
Strong products are difficult or impossible to duplicate. I can't protect the idea of a brown, fizzy, sweet, cold drink. I can protect the formula for Coke. Clumping cat litter is the perfect example of an idea that can't be protected and can be easily duplicated. There must be hundreds of combinations of ingredients that will produce clumping cat litter. Each manufacturer can protect his own combination of ingredients but not the product idea. Strong products and companies are almost impossible to duplicate.
Cash on Hand and In Banks
You see the above headline on financial statements. Strong businesses do not generate huge cash expenditures or large investments in equipment. Do you have to sink some money in your business from time to time? Sure. Someone once said, "I never invest in anything that eats or needs repair." Why, because if not handled correctly they eliminate profit. Strong businesses keep investments as low as possible.
When you issue credit to customers they are operating on your money, not theirs. Taking credit cards is not the same as extending credit and being your own collection company.
If you extend credit, try to move closer to a cash business. Give the intrest charges as a discount for cash to customers.
Regulations And Government Red Tape
Show me anything the government puts its hand in that gets cheaper. If your products or services fall under some form of regulations, there isn't a whole lot you can do about it. Your customers expect a product that is safely produced.
If there is a cost, and there usually is, in meeting specific regulations this can place a hardship on a business. If you are in a better position than your competition to handle that cost this can be an advantage.
Mobile: Can You Do Business Anywhere?
Can your business be done anywhere? More and more businesses don't depend on their surroundings for their livelihood. There are many businesses here in Bozeman, MT that don't do any business at all in Montana. With faxes, internet and a phone system many businesses can be anywhere.
The Last Word On Business Strength
The most important part of any strong business is you. You provide a strength that the business can't produce. Your business keeps you fascinated. You hate to leave at night and can't wait to show up in the morning. Your enthusiasm is the life blood of the business. It infects your employees and customers alike. Competitors are powerless against it. The true strength of any business is in you.
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Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 888-550-6100 or PO Box 271, Bozeman, MT 59771-0271
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