Photo (CC) by Nana-b-agyel, on Flickr

The one consistent force facing all small business owners is that of change.

As we prepare to enter a new year, it is not uncommon to take some time and think about things you would like to accomplish in 2019. The resolutions we lay out include those for our personal life but often those for our business. Making such resolutions is a great step except:

1. they are often forgotten about, or;
2. there is little follow-through, especially long term.

Business owners have a third item they face – the world is constantly changing. Change isn’t something that can be planned just once a year; it is constant. As an owner, you need to have a method of information gathering that keeps you current on new ideas and trends affecting you and your business, industry, and the economy in general.

This overview must be inclusive including local, national and worldwide. Being a regular reader of Small Biz Survival is a great start but not enough. Find and build a package of key sources of information. Make scanning and reading them a regular part of your day, week and month.

And don’t forget listening. Be an active member in business and social networks, clubs and groups. There is so much information you can’t fully keep up. This is where your group can help not only fill in the gaps but they can help you prioritize what is more important for you to watch.

Change is here and change will remain. It’s a constant and the survival of your business depends on being aware of what’s coming and then reacting as needed. Good luck.

Closing comment – This idea of change also brings me to a change I am making. This will be my last regular blog for Small Biz Survival.  I have retired and am moving on into other endeavors (volunteer, being a grandfather, camping, travel, etc.). I appreciate Becky allowing me to be a part this work. Perhaps she will let me pop back in now and then as new thoughts and trends hit my radar screen.

Photo by Becky McCray.

Ask yourself:

1. Who are your regular customers? What do they buy and why do they keep coming back?
2. Who are the customers you no longer see? Why aren’t they returning?

Why is it important that you can answer these two questions? It’s simple. Regular customers form the base of your business. And customers who have left are key informants. Knowing why they left is knowing where you need to focus your efforts.

The loss of regular customers can have a substantial impact on your bottom line. That loss comes in three ways. First, you have the lifetime loss of sales. You may see only a $10 a week loss but that represents over $20,0000 in a lifetime.

The second loss is the cost of obtaining new customers to replace those who leave. It costs maybe $3-5 to keep a customer but at least $20 to obtain a new one.

The last, and greatest, loss though is losing the regular customers who are often your greatest ambassador. Their stories and testimonials are invaluable. And they do it often and are highly trusted within their networks and circles.

So it is to your advantage to be able to answer those first questions I asked. You probably have a great deal of this information already in your head, in your employee resource, and in your business records.

Once you have determined who is in each group, the hard work begins. Take the time to determine why some people stay and why the others have left. Today, social media offers a great resource to get some of this information. But having a conversation still remains key. Meet for coffee. Try some cold calling. Network.

Some of the most common reasons you will get as to why people leave include:

• They found a competitor. If so, find out why they switched and what you need to do to get them back.
• Your product or service was difficult to understand to make work.
• Your product or service didn’t perform. And your customer service did not fix the situation.
• Some may have forgotten about you. In today’s world of unending media and communication channels, your message has gotten lost. Keep your name in front of your customer.

It’s important that you take action; know your customers by staying in contact and listening; and keep your regulars aware of what is going on in your business.

Remember that your base is built on your regulars.

Water pipes break in your computer room. Your freezers break down. The electricity goes out for an extended period. A key player in your business dies. Someone hacks your data.

Big disasters and small disasters. Your business faces them all. Understand that the issue of a disaster happening in your business is not an if, but when.

The question is are you ready?

By their nature, small businesses, with limited resources, are more vulnerable to events that interrupt their routines. Yes, you may have insurance for a fire but what about a coffee spill on your data server. And does that insurance you have cover the loss of income you will have until your business is up and running again?

You can’t protect yourself from every possibility, but, you have take some simple steps that will get you back in business as quickly as possible with the smallest amount of interruption in time and money.

How?

It starts with a disaster plan. You can get templates for such at: the Extension Disaster Education Network at http://bit.ly/EDENReadyBiz or FEMA at www.ready.gov/business

Next, take 3 simple steps:

First, plan to stay in business.

• Know potential disruptions
• Assess how your company functions
• Protect your employees
• Provide for evacuation and sheltering in place
• Prepare for medical emergencies (CPR, first aid, etc.)
• Train on using fire extinguishers and other prevention tools.

Next, talk with your people – staff, employees, key suppliers, key customers, bankers, family, etc.

• Create an emergency planning team
• Practice drills (fire, tornado, etc.)
• Encourage employees to make home emergency supply kits and develop family emergency plans
• Detail how you will be in contact with employees, suppliers, customers and others
• Talk to your employees, and your own family, about the need to balance family and business needs during disasters

Finally, protect your investment.

• Meet with your insurance provider to understand and review current and possible additional coverages, such as lost income or business disruption
• Prepare for utility outages and disruptions
• Secure physical assets
• Protect your data and IT systems (off-site backup, etc.)
• Perhaps even consider options for where you may relocate all or part of your business (i.e., what if you need cold storage or freezer space)

These steps are not inclusive but are provided to get you thinking about “what would you do if.” They show, however, that planning need not take a great deal of time or money but might save you such in the long run.

The Purdue Initiative for Family Firms recently had an article on protecting your firm from a natural disaster. They have done an extensive study of small business survival in the wake of Katrina (https://ag.purdue.edu/agecon/PIFF/Pages/newsletters.aspx).

You can’t protect yourself against all possible disruptions, but by taking a proactive approach, to the extent possible, you can have peace of mind and a quicker recovery if something does happen.

Photo (CC) by One Way Stock, on Flickr

Eureka!! You have found a great business idea and can’t wait to get started.

Enthusiasm is great but you need to do a couple of things before opening the doors. You are about to invest money and time. Taking time up-front will help ensure that your investment pays off. 

One such up-front task is to develop a business outline. It doesn’t have to be a complete business plan. Consider what your crucial elements are such as:

• Who is your market? Is the market growing? How many competitors will you have?
• What makes you unique from your competitors? Can you maintain that advantage or some other advantage?
• What is your pricing strategy and how does that match up against the competition?
• Bottom line: Do people have a need for your product or service? Do you solve a problem for your customer?

Once you have your outline, get as much feedback as you can. Family and friends can be part of this but the best people are those who will ask the hard questions and will not necessarily agree with all of your assumptions and ideas. You want people to challenge you.

Another task is to plan where you will find funding. Business owners often say that getting the doors open and keeping them open requires three times as much money and time as initially planned.  Before you start is the time to consider where you might get a business loan, how much you might need, when you’ll need it, and who, including yourself, has funds to invest immediately and in the future.

And this is the time to consider your market strategy. You have thought about your ideal customer but how do you reach that person? And more importantly, how do you keep them coming back? Don’t assume that the use of online marketing is all you need. Use any and all of the traditional and online tools available.

The final task before opening your business may be to do a test run. This may mean selling your product at fairs or shows before taking the final step. You also might want to keep your full-time job while you test the market to see if you have a viable idea.

These are just a few of the tasks you should undertake before starting your business.

Opening a business is risky. It will eat up your time and your money. The more you can minimize the risk, the better you will feel about your decision. 

Enjoy the holiday. 

Photo (CC 2.0) by Benn Wolfe, on Flickr

Photo (CC) by One Way Stock, on Flickr

For many prospective business owners, finding the business idea is the most difficult task.

Theses individuals may have the desire to “be their own boss” but do not know what business will be successful. Some individual have an area of interest but cannot see how it can be turned into a business.

For example, an interest in public speaking could be translated into a business as a motivational speaker, instructor, speech writer, or even a radio or TV broadcaster. This individual even might turn this passion into becoming someone who portrays historical figures.

But what about a prospective owner who does not have any solid ideas? A step some individuals take is to drive to several towns and look around to see what businesses seem to be doing well. Once you do that, you need to ask these questions: Would this business do well where I live? What makes this business thrive here?

While on this road trip, you might come up with the “accidental idea.” That is seeing a need and thinking of a way to meet that need. The idea can arise at any time, so let your mind wander, then translate those thoughts into possible ideas.

Another idea generation tool is digging into data. For example, the population in North Dakota and across the country is aging. What opportunities does that offer? Also, a generation of young adults who have needs is on the horizon. Would you have imagined a demand for learning skills such as canning and cooking? Finally, think about how technology is creating new global opportunities. Census data, at www.census.gov, is a great place to start.

A simple method of idea generation is reading. Take advantage of every source of news. Focus on the trends discussed. Think how what you are reading is creating needs among others.

Getting the idea though is not the end of this step. Often forgotten about in the idea generation segment is to also consider if the idea will result in a sustainable, profitable business.

To determine that, you must do your homework. Here are some questions to help you with your research:

• Can the idea be translated into an opportunity?
• Does a market exist for my idea, and will that market continue to grow?
• Can I make a profit by meeting the need of the market?
• Is my opportunity ahead of its time?
• Who is my competition and what unique advantages do I have over the competition?
• Will I be able to maintain those advantages?

The ideas are out there. They may not appear over night. Just take your time, look over the landscape, and dig deep and you will find a business opportunity that will achieve both your personal and professional goals.

Photo (CC) by Vee, on Flickr

Does your networking add power to your small business? Does it help set you apart from your competitors? Does it increase your visibility? Does it add to your bottom line?

If you answered yes to each question, congratulations. If not, could it?

Effective networking can:

• let people know you are in business
• keep customers aware of your business and the changes you are making.
• help owners find answers to questions and new resources
• find mentors and guides
• provide an early warning system of upcoming changes that might impact your business.

Research suggests that networking is one of the most effective marketing tools because it has little cost, other than time, and offers one of the best returns on your investment.

Yet research also shows that most of the networking we do is not very effective.

Why?

First and foremost, we don’t have a plan for why we are networking. And our plan does not define who we should network with. We tend to often pick those who are in our circles already. And while these individuals might not know everything about you and your business, they also are not completely unaware that you exist.

When networking we also tend to forget some of the important rules such as: decide what you want to get from each event before you walk into the room; get there early (your best contacts will usually come in the first 30 minutes of an event); be a host (meet people and introduce them to others); and it’s not just a game of who can collect the most business cards.

Then there is the follow-up after the event. If you made promises, keep them. It’s also important that you just get back in contact with the individuals you met who you see as a resource for you and your business.

Also, critique your networking. What worked, what didn’t, and what questions or information do you still need from a contact you made?

Effective networking means you have to give as well as receive. It also means follow-ups and building relationship over time. Networking rarely pays off in the short term.

Photo (CC) by Nikk, on Flickr

And lastly, stand by the food. Food draws people and you want to be in the traffic. Until your company is on the tip of everyone’s tongue, no one will be seeking you out.

This doesn’t mean you can’t talk with friends and people you know at an event. Just train yourself to not get into those conversations immediately. Give yourself those golden 30 to 60 minutes first.

Effective networking is a great marketing tool. It can add tremendous punch to your business growth curve. Take the time, do it right and make it work for you. 

Photo (CC) by North Charleston, on Flickr

Want a strong local economy?

Then it should come as no surprise that you need a continuous flow of new businesses.

That message is one that we hear often and loudly in both rural and urban areas. New businesses help grow the economy. They also employee workers, spend money, borrow money, and are often active in local community organizations and groups.

With this in mind, communities have been offered training, loan programs, mentors and support systems, and marketing support. They also look for ways to lower entry costs and provide new ways to connect with the market.

All of these are great programs. And while not all succeed, active communities continue to try new things and tweak the programs that are working.

This blog is a call-out to communities that they not overlook maybe one of the most important efforts in their game plan of building the business sector. Such programs are often focused on growth now and in the near future. What happens though for the long term? Is the pump being primed with a new generation of entrepreneurs?

Youth entrepreneurship efforts are a crucial part of a sustainable, economically-strong community. These efforts mean there will be interested people who want to take over existing businesses as owners retire or who desire to try a new idea.

Today it is argued that future generations will need four skills to succeed. These include: teamwork, creativity/imagination, critical thinking, and problem solving. These same four skills also form the core of a successful small business owner. Thus entrepreneurship training and practice not only prepares a person to be their own boss but, if they should take another path, gets them ready for the workforce.

This blog post is just one example of how youth entrepreneurship education can work.

The great thing about a youth entrepreneurship effort is that the skills taught are not focused on a specific discipline. While the blog post follows a youth who remains in an ag career, it would also be possible to shift elsewhere as opportunities arise.

And not only does youth entrepreneurship efforts pay off down the road but they pay off today as these young women and men become more engaged, try new ideas at perhaps a small scale, and often are involved in other community activities.

So, want your community to succeed both today and tomorrow? Make sure there are programs and opportunities for youth to learn entrepreneurship skills.

More ideas for growing your own entrepreneurs

Deb Brown and I share more ideas like this in our latest video at SaveYour.Town, Grow Your Own Entrepreneurs.  The video is available on-demand starting Friday, November 9, 2018, and it is only available for two weeks. Your questions, stories and examples from your own town are welcome, too.

Photo (CC) by Nana-b-agyel, on Flickr

My mother has recently moved to an assisted living center. For me, this has meant some changes in my help. For one thing, I am more active in getting her medicines.

Recently I commented that I suspect her pharmacy will not be in business in the near future. She asked why I say that since she finds them most helpful.

Why did I say what I did?

My first, and maybe sole, reason was a scan of the age of their customers. I live in the second largest city in the state, one that has been noted for what it is doing in bringing in younger workers. However, I don’t see those younger people in the store no matter what time I am there. I suspect that their average customer is 60+. By itself, that market is okay but I suspect they aren’t drawing new customers of that age range but continue to serve basically their existing customer base.

So how can I make these additional hypotheses about customer growth?

First, we are creatures of habit. If we have a pharmacy we have used for years, we probably aren’t going to change as we age. We actually become more fixed in our ways.

And why aren’t younger people using the pharmacy? They aren’t using technology – no texting, no drive-up, no pay-by-phone, no app, etc. That’s where the competition is.

Also, the store is small so it offers the items you would expect from a pharmacy but don’t go for milk, cereal, foods, tooth paste, jewelry, perfume, etc. And this short list doesn’t even begin to capture what you may find in some of the larger multi-faceted stores.

Another reason is that their hours don’t begin to match the competition. No late evening hours and nothing on Sunday.

All of the things I have mentioned take money and more personnel. Yet survival means change. In retail, this was made apparent again this last Monday when Sears declared bankruptcy. The market place is demanding and right now is demanding something different.

So after saying this, my mom asked about the rural drug store. Is it the same for them? Yes and no is the best answer I can give. Their clients see what others are getting from the bigger stores, but these stores have the advantage of their local connections. And they often are seen as doing what is necessary to help out a customer. Perhaps their prices are not quite as good but price is only one part of why we shop where we do. We more like knowing who we are dealing with and knowing that someone is looking out for us.

Bottom line – Remain aware of what’s happening in all facet of the business and change to meet demands. That’s what customers want. And that’s what you need to do to stay in business.

Photo (CC) Mike Cohen, on Flickr

I am sure we all have been asked, “Do you want the meal deal?” 

And it doesn’t stop there. Deals surround us. Go for a simple oil change and you might be presented with a package deal that includes a new air filter, tire rotation, and more. Buy a car and get offered an extended warranty or free oil changes for life as a special deal. Last week I even had the opportunity to get free batteries for the life of an electronic device I bought all for a flat, up-front fee.

A place I frequent often offered me this opportunity:

Photo by Glenn Muske

Every time I have such an opportunity, I question, “Is it a REAL deal?”

What is a deal depends on the buyer? I might argue that chips and a pickle doesn’t make a sandwich a deal. Other places I go offer that as the basic order. Upgrading to fries and a drink are the standard upgrade deal. And this same idea holds true no matter what type of business you run. Something doesn’t make it a deal because you, the owner, tell me that. What makes it a deal is if I, as the customer, see it as one. It is much like the idea discussed when developing an effective rewards program.

So the next time you want to offer a deal, check with your customers to see what they might want.