Setting Up Shop – Starting a Small Business

Making the decision to set up shop as a new small business can be one of the most exhilarating, and yet also one of the most challenging for most people to make. Here are three suggestions to reduce some of the challenge associated with starting a new business venture:

  1. Choose businesses with lasting demand, whenever possible
  2. A new business based on a short-term fad can work for a little while. However, a lasting business should be based on trends which are more likely to be continuous, since fads will come and go. Even if the demand should change, a business based on an ongoing trends will be able to adapt more easily than one which is based upon only temporary events. Carefully consider customer characteristics (demographics, psychographics, etc.) to improve the selection of a business which has customers with lasting demand(s) for the products and services that you offer.

  3. Choose businesses in superior locations
  4. Some geographic areas will naturally be better locations for target customer markets. All else being equal, customers tend to prefer closer locations to those which are far away, unless your product or service is capable of being provided remotely, at little or no cost. Locating near customers who have established patterns of buying from your type of business is ideal, and most likely to result in better business results overall. Look for indicators (new housing developments, apartment complexes, etc.) which will closely match the target customer characteristics, and market segments you seek to win over.

  5. Choose businesses which are in high-growth industries
  6. All things considered, it is best to pick a business in an industry which is experiencing high growth, as it is much better to get some of an available market, as opposed to having complete dominance of a market where there are nearly no customers left to serve profitably. Entering high-growth markets can also lead to profitably specializing in sub-segments of that market, as your firm develops more expertise. However, also realize that every industry eventually experiences a slowdown as well, so be certain your business plan includes preparation for surviving the inevitable slowdown, once it does occur. Your business should be somewhat diversified by then, to reduce your risks of depending entirely on one market.

In summary, it is best to choose a business based on lasting trends, which is in a superior location, and which is in a high-growth industry. By doing so, you maximize the odds that your business will succeed, and last well into the future.

Copyright 2010, by Marc Mays

Taking Advantage of the Trends of 2012 in Your Small Business

Well, as a former businessperson in retirement I am often contacted by a small business startups and asked questions about how best to do business in such a dismal economy. In fact generally the questions are accompanied by excuses and complaints. Indeed, just as the economy presents challenges, hardships, and crisis for small businesses, I would submit to you on a reciprocal side it also unveils excellent opportunities at every turn. Indeed I’d like to talk to you about this for a moment if I might.

Is it possible to take advantage of the economic downturn and slow growth economic trends? Is it possible to take advantage of other cost-saving strategies to improve efficient marketing in 2012? Yes it is, and let’s go ahead and talk about this for a moment

Slow Growth Economy

A slow growth economy means your competition is not expanding as fast as it normally would. It also means if you’re starting a new business you’re going against businesses that are well-established, but ones which are also experiencing challenges with cash flow and have been beaten down. If you come into the market hot and heavy, they may not be able to compete, they don’t have anything left in them.

Consumers – Low Cost High Volume Strategies

Gaining market share very rapidly in a downturn economy is pretty easy if you use a low-cost high-volume strategy to gain market share. This also creates an abundance of referrals, and a very large customer base extension to perhaps market segments you would normally not have.

Inexpensive and Over Qualified Labor

Downturns in the economy also mean that fewer people are employed, and that means some top-notch people who are over qualified will be willing to work for you at half the salary. This means you can put together a significant team of experienced employees. When the economy is cooking along very nicely, you will be able to do this.

Deals on Supplies, Inventory, Vendor Assistance

When times are tough and other small businesses are hurting, that means your vendors, suppliers, and those who sell your inventory to you are willing to make deals, give you better terms, and offer you assistance. That’s free for the taking, and it will lower your costs, allowing you to pass those lower costs onto consumers to grow your business.

Low Cost Loans

Right now interest rates are at an all-time low, and if you can qualified to get a business loan, the amount in which you’ll have to pay back later in interest is quite reduced. If you can get the loan, this becomes an advantage to your business. Your competition may not be able to get the loans because they cannot prove their cash flow is adequate enough considering the hardship they’ve had going through during the last recession.

Deals on Business Location Leases

Lastly, right now some retail centers have extra unoccupied space, and they are willing to do deals to fill out the spaces, improve their own revenue, and allow them to keep those business buildings from being foreclosed on. This gives you the advantage in negotiating a good deal on a lease with excellent more favorable terms well below what your entrenched competitors are already paying.

Therefore I ask that you stop complaining, and start using your mind and thinking about how to take advantage of the current economic crisis. Please consider all this and think on it.

Small Business Tip: Get Off the Bandwagon

If you run a small business, it is increasingly important to stay ‘ahead of the game’ instead of just being a player. It would not be a smart business decision to open up a small food market on the adjacent corner of a Loblaws, Walmart Supercentre, Whole Foods and Costco. It doesn’t make sense. You would quickly become part of the small business graveyard.

Your business needs to stand out from the crowd, and since the world is a growing every day, you’re going to need to get creative!

Don’t jump on a bandwagon as it’s barreling through, be a member of the construction team that BUILDS the bandwagon to reap the most benefit as it picks up speed.

Easier said than done – a very select few thought that a micro-blogging platform that only allowed users to speak 140 characters at a time would amass into the social media giant Twitter is today. Ashton Kutcher was a bandwagon builder, and was the first to reach 1 million followers. How many followers do you have?

Not to say that Twitter is dead or dying soon, but if you don’t have a large Twitter following by now… perhaps it’s time to look for a new way of building your online reach and conversation. A new idea is emerging every second of every day, do some research and become an early adopter!

Here are a few leads to get you started:

Group Buying – is on the cusp of becoming huge, and it has been for a few years. Do some research and get involved with sites that give away daily deals- it might actually help promote your business/products. Best case scenario? The site becomes huge in your area/industry and sales skyrocket as a result.

QR Codes– Smartphone barcodes that are starting to pop up everywhere (heck, I even sit on one in the subway every morning). Since 1 in every 2 people will have a Smartphone by Christmas (it’s true!) this might just be the next massive trend in technology and advertising. “Social scanning” includes tools like Stickybits and SCVNGR that incorporate the new location ‘checking in’ fad that might also be on the brink of social domination.

Q/A Platforms – Millions of people are starting to ask questions on sites like Quora and Linked In. Pick a platform that speaks directly to your audience, and start answering some questions. Get in on the conversations; build a reputation as an expert and you’ll start to stand out from the rest of the social media crowd.

Find an alternative to the ‘biggies’ – use Statusnet instead of Twitter, use Aardvark instead of Linked In Answers, use Brightkite instead of Foursquare. Try to hit the bigtime with an emerging trend rather than trying to scream over the noise of the crowd.

Be proactive and set yourself up for success!