The latest news, expert advice, and growth strategies for small business owners
Habits - Good or Bad - We've Got Them
Habits are a mixed breed of human behavior. Some are good and some are not so good for us. We all have habits we wish we could do away with and behaviors we would like to make habits for us. I know I do and every day I am reminded of them. That reminder serves as my change agent to work harder at changing what I can and to accept what I cannot change.
Well in the business world, we have to make changes as our customer's habits change. We don't have the luxury of staying the same all the time because our customers do not stay the same. The Model T is a prime example of how it did not change but yet today the American auto industry still seems to live in the mindset of "I have every color you want as long as you want black." The industry had to have a big jolt of reality before it could start making changes to reflect the American car buying audience.
Habits have an effect on not just large business but small business also. In fact, habits probably have a faster effect on a small business's bottom line because of how close it is to the ultimate customer. In small business, the owner is often in front of the customer while in big business, the owner is many times removed.
So how can a small business owner change his or her habits and improve the bottom line? The first thing an owner should do is make sure the inventory is in line with the customer's needs and desires. Consumers change over time and what was needed last year may no longer be needed. So if you don't update your inventory you may be selling last year's fad which is this year's junk(bad habit). So talk to your customer's - ask them what they would like to see you carry. Ask them about how they see the market changing and what their expectations are (good habit). Involving the customer in your decision making process is one way to make sure your habits on inventory are changing and you don't get caught with your pants down.
Then once you involve the customer in your store, it is easier to ask them to buy more - the second thing you can do to change habits. Many times, small business owners are happy to get the order (bad habit). Once you have the order, then is the time to ask how else you may help them and grow that customer in terms of sales. It may be a purchase of an auxillary product, something totally different in another product line - whatever but do the ask! (good habit)
The third habit to change is complacency with the competition (bad habit). We all know competition is there and more of it every day. It is surprising to me when I talk to a business owner and they say they have no competition. Bull Hockey! We all have competition. Heck even I, as a free service, have competition from for profit sources. So go out there and shop the competition (good habit). Have friends and family members go to them and shop them. Check out the customer service, inventory, policies, etc. Get to know them so you can identify their weaknesses (and yours) and build a stronger case for "why buy you."
Next recognize the value of the repeat customer and start paying attention to her. It is not a good practice to offer new customers something and not the existing ones (bad habit). It is on average nime times more expensive to acquire a new customer then to keep an existing one. So reward the repeat customer (good habit). How? Try a customer loyalty card, customer appreciation events, insider sales, preview sales, special packaging or services etc. Give them a reason to come back more often and buy from you. Many times these special services are not expensive when compared to the sales they generate.
We are all creatures of habit so reinforce your customer's habit of shopping with you with your own good habits. So I invite you to share with us some examples of good and bad habits you may have or have witnessed in small business. Let's talk about them.....
Well in the business world, we have to make changes as our customer's habits change. We don't have the luxury of staying the same all the time because our customers do not stay the same. The Model T is a prime example of how it did not change but yet today the American auto industry still seems to live in the mindset of "I have every color you want as long as you want black." The industry had to have a big jolt of reality before it could start making changes to reflect the American car buying audience.
Habits have an effect on not just large business but small business also. In fact, habits probably have a faster effect on a small business's bottom line because of how close it is to the ultimate customer. In small business, the owner is often in front of the customer while in big business, the owner is many times removed.
So how can a small business owner change his or her habits and improve the bottom line? The first thing an owner should do is make sure the inventory is in line with the customer's needs and desires. Consumers change over time and what was needed last year may no longer be needed. So if you don't update your inventory you may be selling last year's fad which is this year's junk(bad habit). So talk to your customer's - ask them what they would like to see you carry. Ask them about how they see the market changing and what their expectations are (good habit). Involving the customer in your decision making process is one way to make sure your habits on inventory are changing and you don't get caught with your pants down.
Then once you involve the customer in your store, it is easier to ask them to buy more - the second thing you can do to change habits. Many times, small business owners are happy to get the order (bad habit). Once you have the order, then is the time to ask how else you may help them and grow that customer in terms of sales. It may be a purchase of an auxillary product, something totally different in another product line - whatever but do the ask! (good habit)
The third habit to change is complacency with the competition (bad habit). We all know competition is there and more of it every day. It is surprising to me when I talk to a business owner and they say they have no competition. Bull Hockey! We all have competition. Heck even I, as a free service, have competition from for profit sources. So go out there and shop the competition (good habit). Have friends and family members go to them and shop them. Check out the customer service, inventory, policies, etc. Get to know them so you can identify their weaknesses (and yours) and build a stronger case for "why buy you."
Next recognize the value of the repeat customer and start paying attention to her. It is not a good practice to offer new customers something and not the existing ones (bad habit). It is on average nime times more expensive to acquire a new customer then to keep an existing one. So reward the repeat customer (good habit). How? Try a customer loyalty card, customer appreciation events, insider sales, preview sales, special packaging or services etc. Give them a reason to come back more often and buy from you. Many times these special services are not expensive when compared to the sales they generate.
We are all creatures of habit so reinforce your customer's habit of shopping with you with your own good habits. So I invite you to share with us some examples of good and bad habits you may have or have witnessed in small business. Let's talk about them.....
Sometimes I just have to be honest.....
I had a moment the other day that I did not like my job. This does not happen very often as I really like the client interaction, the research I do for them and overall helping to grow the economy of Southeast Missouri. It really gives me a charge when I see a new business open up that I assist in the planning stages or a client gets a loan in these times. So overall I really do enjoy my job.
But the other day, it was different. I had a client counseling session scheduled and I knew it would not go well. I had done the financial analysis of the past five years and it did not look good. I did the projections and of course they should look good but based on past historicals, I could not match the hopes of the business owners. I tried changing this number or that number or reducing this or increasing this and it always came out the same - not in favor for the client.
We met last week and I shared with them the results of the financial projections. I made sure they understood what the numbers were saying and what they would tell a banker when asking for a loan. They said they understood but the question still remained - they knew their sales projections were right.
So we talked about what were they doing differently in the business to generate this additional revenue. We got creative in their explanations and even stretched some areas. I would do a quick financial redo on the PC and come up with the same results.
The client started to see where this was headed and finally asked the inevitable question "what should I do? This is my livelihood and I need this money to keep it going."
I was in the moment where I did not like my job. I knew I had only one answer and it was not a kind one. I put on my best counselor face and told them they had only two real solutions - 1) continue to limp along and eventually go out of business or 2) get out now and start looking for a new job or new idea to start a new business.
I sat there and held back my desire to reach out and try to smooth it over. That was not the right thing to do for the client. I let the couple think it over and consider their options.
After a while, they asked questions regarding on how they could get out of the business, sell the equipment, sell the building, and how could they potentially recover some of their investment. We discussed options and methods to do that.
Surprisingly, at the end of the counseling session, the client told me they somehow felt relieved with my honesty and they could now move forward on their own decisions. They told me they had discussed the same options many times but were unwilling to admit their failure. Now that someone from the outside had said it, they knew it was the right thing to do.
So with their minds almost made up, they left the session with a clearer path for their future. I found some relief in the new facts they had shared with me but I still did not like my job that night.
What are your thoughts? Share with me.
But the other day, it was different. I had a client counseling session scheduled and I knew it would not go well. I had done the financial analysis of the past five years and it did not look good. I did the projections and of course they should look good but based on past historicals, I could not match the hopes of the business owners. I tried changing this number or that number or reducing this or increasing this and it always came out the same - not in favor for the client.
We met last week and I shared with them the results of the financial projections. I made sure they understood what the numbers were saying and what they would tell a banker when asking for a loan. They said they understood but the question still remained - they knew their sales projections were right.
So we talked about what were they doing differently in the business to generate this additional revenue. We got creative in their explanations and even stretched some areas. I would do a quick financial redo on the PC and come up with the same results.
The client started to see where this was headed and finally asked the inevitable question "what should I do? This is my livelihood and I need this money to keep it going."
I was in the moment where I did not like my job. I knew I had only one answer and it was not a kind one. I put on my best counselor face and told them they had only two real solutions - 1) continue to limp along and eventually go out of business or 2) get out now and start looking for a new job or new idea to start a new business.
I sat there and held back my desire to reach out and try to smooth it over. That was not the right thing to do for the client. I let the couple think it over and consider their options.
After a while, they asked questions regarding on how they could get out of the business, sell the equipment, sell the building, and how could they potentially recover some of their investment. We discussed options and methods to do that.
Surprisingly, at the end of the counseling session, the client told me they somehow felt relieved with my honesty and they could now move forward on their own decisions. They told me they had discussed the same options many times but were unwilling to admit their failure. Now that someone from the outside had said it, they knew it was the right thing to do.
So with their minds almost made up, they left the session with a clearer path for their future. I found some relief in the new facts they had shared with me but I still did not like my job that night.
What are your thoughts? Share with me.
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