Small business owners can learn a lot from their larger “enterprise” cousins. Effective business practices developed in larger entities can trickle down and become advantageous for small business.
Practice 1: Emulate and then… differentiate
In small business success depends on knowledge of competition and the marketplace. Secondary research including literature review, market analysis, field study, vendor communication, and industry data can yield inexpensive knowledge that will help to create a specific product offering. Emulating larger, successful company’s business models and creating differentiators will generate lucrative, under-served target markets and potential revenues. Businesses fail because small business owners don’t take time to immerse themselves in their target market and understand the idiosyncrasies of their potential customers. Being like the larger players but capitalizing on their weaknesses become potential strengths in your organization.
Practice 2: Embrace change but remember stability
In this new “technology” world geared toward information overload and constant change, people still crave stability and their habits like the morning cup of coffee, going to the gym, or Friday afternoon happy hour. Small businesses that focus on quality, core value, and consistency will beat their competition and develop a solid reputation. Too much change can lead to chaos, anxiety, and creation of negative culture within the business. Business owners have to balance the benefits of core competencies with calculated adjustments in people, processes, or product offerings.
For example, as a restaurant owner, you want to build ROI with “return” customers or regulars and not one-offs. To do this, signature dishes, consistent service, and novel ambiance are necessary and proven to work. If the menu changes all the time or service fluctuates, the dining experience will not be consistent and customers will go elsewhere regardless of the quality of the food. Evaluate the benefits of “specials”, menu updates, and “cleaning house” prior to execution.
Practice 3: Understanding the value of time
Often business plans, promotions, marketing tactics, and practices don’t account or allow enough time to mature. Search engine optimization, for instance, is not an overnight answer to brand awareness and site traffic. Internet search engines need time to recognize and develop listing capability, which can take several months. Developing quality content, trust, credibility, and inbound links on your website take effort and require dedication. Regardless of what SEO consultants say, you can’t “buy” your way into higher page rankings.
Another example is revenue forecasts in business plans. To look lucrative and present profitability, forecasts usually demonstrate high rates of adoption not accounting for lack of product awareness, competition, and consumer experience. Claims are made based on industry size, potential opportunity, and novelty of the product offering not true adoption/purchase rates. Knowing financial institutions and investors use profiling and benchmarking to evaluate opportunity, business plans have to be accountable and present “real” numbers.
Promotions and advertising campaigns invariably take longer than estimated. For example, publications focus on distribution, frequency of exposure, and number of “touches” rather than documented conversion rates for a particular type of business. Publishers know that advertising is necessary in business and may fudge on time expectations to obtain business. Knowing this, smart business owners build marketing around long-term brand awareness and short-term promotion, in parallel. Relying on one or the other too heavily will cripple the marketing effort and negatively impact revenues.
About the Author: Kristian Hohenbrink
Kristian Hohenbrink is the president of KandH Consulting, a regional small business consultancy stimulating controlled growth and enhanced value in small businesses, start-ups and reorganizations. He has over 30 years experience in creating and managing successful businesses and is an avid writer, presenter, sales trainer, and business mentor.
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