Part 1: The REAL Threats Local Businesses Will Face in 2015
This five part blog series takes a deep look into highly competitive industry landscapes and tips to successfully compete with the “Big Guys” and the “Little Guys.”
Part one of this series provides a deep look into the struggles local businesses face in highly concentrated markets. Logic would point to highly concentrated markets as being safe investments. Why else would so many people be in the business?
What does this mean for the business owners?
Although there are so many successful businesses in the Bay Area, you MUST appreciate and understand what these businesses have in common and what makes them unique. Determining what parts of each business ultimately leads them to success, or failure, is the key to swimming through local competition.
Many people might assume that the “Big Guy,” or corporate chains, pose the greatest threat to the smaller “mom-and-pop” locally-owned businesses. Whether you sell specialty cupcakes or professionally designed fruit baskets, your local competition is the most challenging when it comes to your bottom line.
Local businesses are faced with some of the most difficult circumstances when it comes to attracting potential clients and maintaining current loyal customers. For example, a locally-owned smog station or auto repair shop competes with as many as ten businesses at any given time. These rival businesses may offer the exact same services, advertising comparable prices, and are just a few blocks away. This is what we call a HIGHLY competitive industry and something locally-owned businesses face everyday. They lose customers everyday as they struggle to meet and exceed discounts, entertainment, and customer service.
So how do local businesses in highly competitive fields survive and maintain a steady income flow?
It’s imperative to create and implement a system that ensures financial stability – this requires much more than simply making sure employee benefits and vendors get paid on time. You must have enough financial flexibility that will allow you to keep your employees happy and your customers satisfied while continuing to fund the research and development needed to offer better services and advertising domination over the competition.
Top 2 rules to surviving the REAL threat:
Employees, honesty, & customer service are the foundation of your reputation: Your customers’ point of contact or sales representative is one of the strongest assets you have when it comes to direct interaction and company reputation. The success or failure of your team in this area will make or break the success of your company. This goes for every industry – auto, food, construction, childcare. The person your customer interacts with the most eventually becomes the face of your company on Yelp, customer referrals, social media, and all other reputation management, consumer review sites, and word of mouth. You learn the hard way when an employee simply doesn’t understand your service offerings, but still manages to sell them. That’s a scary thing. Grow, expand, and develop innovative service offerings, but do not let customers purchase these packages until you’ve had time to perform acid tests and work through any bumps to ensure the production team is working like a well-oiled machine.
Long lines & waiting can lose customers… forever: You aren’t Disneyland. People will wait in line at Disneyland for two hours to ride Magic Mountain because it’s the only place in the world they can. If there are 20 other people in line to buy a sandwich, they will simply walk out the door and go to the deli around the corner. Time is precious and when they can get the exact same thing for the exact same amount of money, don’t make them wait 20 minutes for a sandwich.
More insight to come from our expert bloggers in part two of this series.