Photo (CC) by David Rickard, on Flicker

Does your business have a sustainable advantage?

Having one or more sustainable advantages gives you an edge in the marketplace.

Advantages can be developed in several ways. Perhaps the most commonly sought after advantage is price. However, a price advantage is rarely, if ever, sustainable. Another business will find a way to offer a lower price, even taking a loss sometimes on that one item. Our landscape is littered with businesses that relied on a price advantage.

Another means to gain the advantage is in the use of rare elements, talents or processes. The outside shell of your automobile is such an example. Companies gained an advantage in developing a special process for bending and molding sheet metal. Then aluminum came along followed by fiberglass and now we have plastics and carbon fiber. All of these initially required an expensive and somewhat unique process to form the body of a car. But over time, the process got cheaper and more companies decided to use it. And so the advantage was lost. Not only was the advantage lost but some companies got attached to the old way of doing things and got left behind.

Another advantage used by some companies is to hire the best personnel available. Sometimes this works and sometimes it doesn’t. A management style that works at one business might not fit with another business. Also, there are always new people coming along looking to challenge what works. Plus new technologies and tools leave the old ideas behind.

Two more recent advantages companies have adopted are free shipping and overnight shipping. Again, these gave a temporary bump to a company but a scan of the marketplace finds they no longer make your company unique.

I recently heard about two more advantages that companies are trying. While they offer some temporary advantage, I suspect that neither will be sustainable.

The first was when United Airlines gave a $10,000 voucher for a customer who was booked on an over-sold flight. It was a satisfactory means of customer service perhaps but did they just set an impossible standard to maintain. Who made the call and will everyone be treated equally? Stay tuned to this one.

The other one, by Ace Hardware, says if you buy supplies from them for a painting project and then need something else or more of something, they will deliver it for free. How often I have needed more paint or tape or whatever in the middle of a job. Sounds like a good idea. Time will tell if this gives them an advantage and if it is sustainable. I suspect that the speed in which they can respond will make or break the idea. If I am in the middle of painting, I will want things quickly. And then there is the issue of sustainability? This could be something other businesses could easily duplicate.

As you think about sustainable advantages, there is one more thing to consider. As mentioned, sustainable implies a time horizon. My comments have looked at it over a long period of time. Perhaps though you only need it for a month or a year. Then sustainable is much easier to get and maintain. It also implies you are planning for what will your next advantage. You may decide to break a big change into several small changes each of which give you a new advantage.

Having an advantage makes your business memorable. Maintaining the advantage brings long term success.

Photo (CC) by One Way Stock, on Flickr

Customers like doing business with people they know. As a small-business owner, you can use that to your advantage.

Some advantages can include knowing your customers by name. You can learn what products and services they want. If customers have a problem, “talking to the boss” to get an immediate solution is easy for them. What’s also easy is to ask them to be your ambassador, take pictures for your use and write a review.

But do not abuse the advantage. Today the consumer has certain expectations that all businesses need to meet. Being small should not be used as an excuse.

Some of the areas where being small is used as an excuse are:

• Inability to compete, typically in terms of price – Price is just one way businesses can compete, and it is not the leading factor typically. Small businesses can be very competitive in many other ways.
• Not looking for the opportunities they have.
• Ignore planning – Planning is a crucial step in being successful. Planning need not be developing an elaborate set of written documents. It is, however, going through a thoughtful process and jotting down key goals, objectives and time frames.
• Avoid competing for help – Small businesses can offer certain benefits that big businesses can’t. Plus, small businesses often can be very competitive in terms of wages and salaries.
• Not using technology – It really isn’t a matter of whether you want to use it; technology is a part of today’s society.
• No marketing – Small businesses face lots of competition. You need to be visible to your customer base. Today that means being online as well as in traditional marketing methods. All businesses need a website. Beyond that, you need to be using the tools that your customer is using.
• Poor customer relations – I hate to repeat myself, but don’t take advantage of your customers. Being small does not mean you can ignore your customer, talk about your customer or not be totally professional in how you treat your customer. You know how you want to be treated. Treat your customer the same way.

Most small-business owners understand what they need to do in terms of customer relationships. What usually is the case is that we get lax in these long-term relationships and slowly let go of some of the things that once made our small business stand out. You can’t let that happen. Never assume the customer will be back tomorrow.

Your customer base is your most valuable resource. Make sure to pay attention to them. They are your business tomorrow.

Small Business matters on more than just one day.

As a small-business owner, how often have you said, in conversation, “I can’t compete with the big stores?”

How often has a customer been told you can’t do something because this is just a small business?

Stop it!

That sounds harsh, but your words just made you your worst competition.

Instead, offer the customer information on what you can offer: local service; setup help; great returns; more often than not, competitive pricing; and a biggie, you’re part of the local community.

Take advantage of being small. Call customers by name, carry the products they buy or ask for, and help them find what they want.

But the mindset of not being able to match the big store goes deeper. I often hear that small businesses don’t have the skills to do financial reports, the time to do planning, the budget for marketing or the need for technology, especially websites and a social media presence.

I agree you can’t do all of this at once. But it’s possible to get it all done. How?

• Get help. You don’t have to hire people, though. Lots of people willing to work as a contractor. You also may be able to find volunteers.
• Think about the youth in the community. You probably can find young people who are tech wizards, great designers for marketing campaigns and logos, or writers for ad copy and content.
• Check out the myriad marketing books that offer hints on marketing for next to nothing.
• Barter for services.
• Take advantage of overnight delivery. Ship directly to clients.
• Look outside your local area. This goes against what I hope would happen, but sometimes it’s necessary.

The list goes on. Small-business owners are great at bootstrapping. You have  a number of chances to put those skills to work.

Granted, doing everything that needs to be done to compete against the big competitor is hard. But remember, you don’t need to do it by yourself. For example, give your staff authority and responsibility. Let them help.

You may respond that you have no paid staff, just family and friends. That’s OK. They may love the challenge of solving a problem or two.

Don’t let being small be your excuse. Look at is as the asset it can be in some instances or nothing worse than a small challenge to work around.

Small is the new big.

Holder Drug by Becky McCray via Flickr

When asked if they have any advantages as a small business, many owners respond negatively.

The fact is, small-business owners, especially those in rural areas and small towns, have many advantages they can use to enhance the success of their store.

Knowing the audience is a huge advantage. Yet they often do not make full use of this close audience connection.

Knowing the audience allows an owner to more completely understand the problems his or her client is having. It also should help develop brand advocates. They are people who, via words and actions, sell your store, products and services for you. They do this because of the trust that can be developed in such close relationships.

Local owners also can be very responsive to special needs. If the owner does not have an item a customer needs, the fix often can be found by checking with suppliers and using the myriad fast delivery opportunities that exist.

As business owners have noted, knowing their local audience allows targeting specific groups to keep them informed when products become available that you, the owner, know this person is interested in. What a marketing opportunity.

Another advantage of the local business owner is the ability to be nimble. Market changes and trends are easier to spot. With the ability to shift product mix quickly, the local business owner can lead the big retailer in being prepared to meet new demands.

The ability to be nimble comes from another advantage, that of having local decision makers. Seeing a trend and taking advantage of it requires someone on the scene who can execute a decision. The owner/manager has the freedom to make those decisions.

Local community involvement is a major opportunity for the small-business owner. Yes, they have a business to run, but often it is the local business people who are involved at the heart of various civic and charitable organizations. Money and donations are important, but they often give of their time.

Such civic and leadership involvement helps more deeply entrench the perceived value of the business, thus strengthening its brand.

Being successful as a small-business owner is a challenge. Small-business owners face a variety of competition and each has certain advantages.

 Yet being a small-business owner brings a set of advantages that creates real strength and opportunity. Put them in your toolbox and make full use of them in your business.