Last week a client asked me about the Lean Startup. As a small independent baker, the did not Learn Startup methodology didn’t really meet his needs. Actually for many small businesses, they’re already utilizing some of the Lean Startup’s principles: split testing (e.g. which new cupcake idea is selling better), pivoting (e.g. advertise better selling new cupcake), build-measure-learn (e.g. ask customers what they like about each cupcake, why, etc. then adjust the recipe if needed).
The Learn Startup is more applicable to large/new & complex products and/or services. When you have hundreds of ideas, tweaks, iterations, it can very easy to get caught-up in the labyrinth of product/service development. Essentially, it comes down to starting with a minimum viable product (MVP), have users play around with it, gather data on (i.e. with actionable metrics, interviews, use studies, etc.), decide on which steps to go next. This measured, calculated, and insightful process prevents over-developed products/services that do not necessarily have a market/meed a need.
As mentioned, the Learn Startup method might not be useful for all entrepreneurs but if you are in the processes of developing a large/complex product or even a brand new/novel product, it might be worth your time to check out this book and install some informational gathering and pivoting processes to make sure that it closely meets a market need.
With Sport Chalet closing and even Walmart showing losses, Amazon is the clear competitor to beat.
So far no one has a clear winning strategy: click and mortar, brick and mortar, online, no one is safe when it comes to retail. However, there are some that are surviving and thriving by offering something online purchasing cannot match, a visceral shopping experience.
Retailers have to make their stores into a destination. Funky decoration, unique customer experience, seminars/lectures, a sense of community, etc. This is really where the personality of the business (the “brand”) is shown.
One example is The Last Bookstore, a bookstore in Los Angeles. The photos below show a stark difference from Barnes & Nobles. These aren’t Bookstore temporary holiday decorations but long-term attractions that draw crowds.
The current version of The Last Bookstore is actually its 3rd stage. First opened in 2005 in a loft, it quickly expanded into the former Citizens National Bank’s 22,0000 sq. ft. downtown space (an insane space for any retailer let alone an independent one).
Experiential shopping obviously has a bunch of challenges; you may need a unique space, maintenance of store fixtures, uniquely trained staff, only local reach (for the time being which I will get into at the bottom of the article), possible higher insurance, and other differentiating factors which all can result in tighter margins. However, having a challenging strategy is better than having none at all.
The Last Bookstore: They are known as the largest independent bookstore in Los Angeles. They have a crazy interior. They also sell used books for $1. This price point is important because buying a used book online will not be cheaper after shipping is factored in. Also, books offer a fundamentally different tactile experience from eBooks. So customers walk in to check it out. They wander the vast selection, and take pictures of the funky decor. They wander through the store they touch items, a psychological factor in sales.
Now they’re are not just a consumer. Now they’re a consumer at a super hip, independent, small business. They feel good about themselves. They tweet to their friends about it. Repeat.
Clothing Retailers: Using my client Maitri Yoga as an example, a yoga clothing retailer; don’t sell too many existing/famous brands. About 40-60 (name/unknown) mix. You’re not going to be able to compete on price and there are also covenants on discount pricing for name brands. People already know the sizing for these brands so they will use your store as a showroom (like Best Buy used to be before offering price matching). Sizing and other factors are not uniform throughout clothing, so the product needs to be felt and tried on. Therefore you have to offer goods that aren’t known and aren’t sold on Amazon. They come in for a Prana top but see a new unknown brand. Now you’re the hip store that sells up and coming brands that aren’t offered on Amazon. In order to do this, you and your purchaser/procurement officer has to know market trends, know which brands have good quality, nice design, etc.
The work doesn’t stop there. The store has to be laid out in a manner that draws in the customer. New items in the front. Focal decor near the front and in the center/back. You’re going to have to go to estate sales, yard sales, furniture store liquidation sales, etc. to purchase furniture, decorations, accent pieces that fit the company’s brand.
Additionally, you have to build community engagement. If you’re a Williams Sonoma, you have to offer cooking events. If you’re a Nike, you have run Clubs to build engagement. Potential customers will come in for the event but may purchase something that caught their eye. The costs for holding public relations activities such as events can grow beyond the return on investment so keep an eye on public awareness expenses.
The good news for small business owners is that the unique, boutique atmosphere each independent retailer has cannot easily be matched by larger companies.
Every industry is different so I would have to consult with you on an individual basis; then look at industry & market trends, the culture of the brand, the company’s financials (look at its performing items and overhead), etc. This is all under my strategy consulting services.
One of the services I offer is strategy consulting. However, the name is quite vague so what is strategy consulting? It is a lot of things. It varies by the needs of the client. Some clients need help developing an overall strategy for the business.
Say they have a product but not much else. So they need everything from naming of their product, research on where to sell their product, team building, etc. Naming might require a psychographic analysis of branding.
If they are a little farther along, it can be an audit of what they’re already doing, or analysis of where to go next. A business might be looking at weighing the pros and cons of expanding to a new market, introducing a new product, do a product overhaul, etc. Product overhaul might require a net present value calculation of multiple alternatives.
Every situation is unique so let’s talk and figure out what you need.
Of course almost every company needs to advertise. But where? Targeted advertising is most effective. So just put a sign at where your market hangs out (what’s “market”? check out my article on some commonly mistaken business terms)? You can put up a sign but it comes off as inauthentic and lazy. You have to deliver the brand message/concept in a way that will be received.
H&M is sponsoring Coachella for its seventh year. Premier music festivals can make over $1 million by selling stage-naming rights to corporate sponsors. However, other businesses are getting on the ground-level and making for a more interactive experience. One way is experiential marketing / promotional events: Levi Jeans’ Pool Party at Coachella. Yeah, you know it’s commercial but it still creates a positive association with the brand. Yes, the same positive association used on all animals to create habits. Habits = sales, if ingrained deeply enough.
Where do you find where your market hangs out? Google industry trade shows, magazine, clubs, etc. Selling knitting needles? Find influential people on Pinterest and send them a sample. Opening a bakery? Go get a booth at the local farmer’s market and get to know those in the neighborhood. In Supermensch: The Legend of Shep Gordon, Shep sold out Alice Cooper’s show in London by having a billboard truck advertising Cooper’s show breakdown in Piccadilly Circus (one of London’s busiest roadways) during rush hour traffic. So for hours people helplessly saw in person and on the news, Cooper’s ad while stuck in traffic for pennies on the dollar!!! There are only as many ways to promote your business as the imagination allows.
So don’t just spend a ton of money and blow it into the wind. Do a ton of research and then inject that into a targeted promotion as part of an overall marketing campaign strategy.
First, get motivated: As the saying goes, “if there’s a will there’s a way.” Motivation is key for anything. If you want anything bad enough you’ll do what you have to do to get it. Every other efficiency tip is a “way” but the will must be there to do anything. Believe in yourself and get excited about your vision. Some great resources on Reddit’s Motivation and LifeProTips pages.
Next, schedule time well: The most successful people in the world have the same 24 hours as everyone else. Although there are thousands of time saving tips, here’s one that I found to be very helpful: schedule calls. How often do you call someone or receive calls while they/you are in the middle of something? It takes a typical office worker an average of 25 minutes to return to the original task after an interruption. When you know a call is coming, you can have whatever materials, questions, etc. prepared beforehand. This brings me to my next point…
Then, declutter: An organized desk, computer desktop, etc. allows you to quickly find what you’re looking for. It also helps you concentrate because there are fewer things out there to grab your attention. If you don’t need it, file it or throw it away. If you’re not sure, scan it and save it in the cloud. Now you have it everywhere and nowhere (very zen, huh). Ultimately, you’ll need a clean space to work. Now that you’re prepared to work, this brings me to my last point…
Lastly,work focused:Now that you’re working, you have to maximize your work-time. One thing that works very well for me is listening to music. Not just any music, for me I like non-lyrical, medium-fast tempo, instrumental music. Spotify has great playlists that I follow. Hours of crunching numbers on excel and reading industry reports for my clients goes by faster when I’m listening to focus music.
Here are some more efficiency increasing tips in my article.
When thinking about your business, it is paramount to think of the downside risk: bankruptcy.
Everyone knows the basics: not enough customers, expenses are too high. However, the devil is in the details. That’s why a simple Google search of why businesses in your industry fail. The “unknown unknowns” are critical. Considerations you haven’t even thought of considering. Whether it be, having a little extra cash on hand, or a different advertising strategy; this little bit of research will help you learn from the mistakes of others, and hopefully not repeat yourself.
When you think of McDonald’s food you think of burgers. Maybe other things too but mainly burgers. However, back in the late-80s/early-90s the Golden Arches tried to expand into pizzas.
This was ultimately an unsuccessful expansion for reasons beyond a confusing palate. They failed because they expanded beyond their core competency: making hamburgers.
From an operational stand point hamburgers are different than pizzas. Making pizzas require different equipment and ingredients. One reason for McDonald’s profitability at relatively inexpensive pricing is due to cost efficiencies from economies of scale; every inch of a McDonald’s kitchen is optimized. Fry pans have a designated size that fit with the size of the patty, that are heat up at a certain rate. Pizzas don’t need frying pans. They need ovens. Ovens that are expensive to put into existing restaurants and take up valuable kitchen space. Pizzas also took longer to prepare than the fast food burger. People had to wait longer; an unusual thing for a fast food company to ask of their customers. Lastly, pizzas not fit through the drive through window as easily as a bag of burgers and fries.
They could’ve had success with pizzas if they approached it from a different angle. McDonald’s found success with a production expansion with the Egg McMuffin. Originally, skeptically received, breakfast is a McDonald’s staple now. Burgers are lunch thing, but they successfully introduced breakfast. Pizza is a dinner thing. Therefore, instead of pizzas, McDonald’s should have brought in pizza by the slice (a very well-known concept at pizzerias) or at least personal sized /small pizzas. A slice of pizza for lunch is not a foreign concept. An entire pizza for lunch is.
The difficulty in making and selling different types of food is probably why even large chain restaurants choose to differentiate different palates under different brands as Pizza Hut is doing with WingStreet and Carl’s Jr. with Green Burrito.
Now it will be harder to reintroduce pizzas because McDonald’s is busy rebranding itself to health with marginal success. Pizzas aren’t considered to be healthy. Nonetheless, it is not hitting their market value with a 5 year high at $118/share.
McDonald’s might set up for another go at extension but instead of a product extension (i.e. new product), they might go brand extension (i.e. new company). The popularity of fast casual dining such as Chipotle (before the e-coli debacle) and Blaze Pizza might be an attractive direction to expand McDonald’s.
A lot of my clients (and generally all people) have difficulty juggling work, life, and starting up their business.
I find for me, not watching TV helps. I do other activities (surf, Brazilian jiu-jitsu) for relaxation/stress relief. I get my news online, eat clean/take vitamins to keep my energy up, and stay focused while working by listening to music that helps me zone in.
Of course everyone is different so you gotta find a schedule/method that works for you.
Here are a list of other things you can do to be more productive with your time.