Key Actions for Small Business Success
Building a business is never a sure thing. In 22 years of working inside businesses, large and small, and as an advisor to business owner (15 years of it as a lawyer for small and medium sized businesses), I've found certain actions will greatly increase your chance of success.
What I find interesting is that these actions are counter-intuitive. Most people think exactly the opposite of what I'm going to tell you.
Anyway, here we go.
Never sell on price.
Being the low price provider is a quick ticket to financial disaster for most businesses. Customers who buy based on price will not be loyal. The minute a better price is offered, they'll jump ship. And, you'll never be able to offer the best price long term. Another business will inevitably have a better system or lower cost - or the owner is too stupid to actually know his cost and sells below it. It's a no win scenario.
Why do people buy based on price? There are two reasons: all they care about is the short term cost or they don't know any other way to differentiate between competitors. Those who only care about price are a minority of buyers, usually 15% or less. The rest focus on price because you haven't given them another way to see how your business is different.
Develop a Unique Selling Proposition.
To differentiate your business from the others, you need a unique selling proposition (USP). A USP conveys the distinct advantage you provide those who do business with you. However, your USP must be just that: unique. "Highest quality" or "best service" do not qualify as a USP. Everyone says them. Customers don't believe them and don't use them to evaluate your offering. Rather, a USP must be something that your target customer wants and can quantify.
Of course, that means you have to have (and know about) a target customer. For example, my USP is offering flat fees for legal work. Most lawyers charge by the hour. Their clients don't know how much it will cost until after they get the bill. Talking with my clients, I discovered how much they hated the uncertainties of hourly billing. So, I give them certainty; my clients know the cost before they authorize the work. Prospective clients compare me against other attorneys on something other than hourly rates.
Notice that my USP has nothing to do with my qualifications or technical capabilities. Your customers don't care about you. They want to know what's in it for them. Your USP must be something that others in your business aren't doing, but your customers care about - something that benefits them. A USP will change as your business and market change. As other lawyers start to offer flat fee services, the differentiation will dwindle. But, it may take a while for the others to adjust. Finally, a USP doesn't allow you to charge outrageous rates. Your business must charge market prices - but definitely not the lowest price.
In some cases, you may want your price to be one of the highest. Strangely enough, that could grow your business.
The next key is take action. With your USP, you have to execute: develop a USP marketing strategy and get out into the market. Marketing is telling the world what you do and how you're different, over and over again. So, just do it. Don't wait for the perfect opportunity or the perfect message. Use your USP as the message and tell the world.
Executing a "not-so-great" marketing plan always wins over waiting until your marketing is just right. You can tweak the materials later. Just run with your basic USP message. If your USP is right, it will work.
Develop a USP and you'll never have to sell on price. Get your USP message out there and you'll be doing more than most other businesses. These two actions can dramatically grow your business.