Go to War With the Business You Have
Donald Rumsfeld was once quoted at saying, “You don’t go to war with the Army you want, you go to war with the Army you have.” Regardless of your feelings about Mr. Rumsfeld, his words ring very true when it comes to the success of your small business. When you are waging economic war with your competitors, you don’t go to war with the business you’d like to have; you go to war with the business you actually have.
That’s not to say that at some point you might have the business you want, but until that day arrives you must do battle with the inventory, staff, facilities, cash flow and management you have. The question then becomes, “Can you defend your ground (the business), until reinforcements (more customers), arrive?”
Here are a few ways to hold off the opposition and make the most of the forces you have at your immediate command.
No matter which rung your business occupies on the economic growth ladder, there are some things you do better than your competitors. These strengths are going to be the foundation of your business. Your first job is to identify the people who need your products or services — your target market — as quickly as possible, and form a plan to reach them. Next, build on your existing customers. Ask for referrals, follow-up on all sales. Track your average sale. Is it going up or down? Don’t sell customers; become the customer’s assistant buyer. Build customer loyalty.
Your competition has more trucks, or more employees. They have lower prices. They offer payment plans. Any new business is going to have challenges going up against bigger competitors. The great thing about weaknesses is — they are usually temporary. “If I could only afford to hire a couple of employees to take the load off me.”
How much is your time worth as a business owner? Let’s assume that it’s $30.00/hour. You want to hire someone for $15.00 per hour — $600.00 per week. Every second you are doing something in your business that the $15 person could be doing, is costing you $15 by NOT having them there.
Which is better, having a $30 per hour person manning the front counter or having a $30 person in the office on the phone setting up jobs, making contacts and bringing in new business? Track your time and duties during the day. You might find at least one employee is very affordable.
I always tell the attendees at my seminars that opportunities will arise and you will have no money. I can almost guarantee that will happen to every new business at least once. How do you keep that from happening? You have to create a system to put some cash in reserve. The old adage, pay yourself first. Determine a manageable amount, no matter how small, and pay it just like any other bill to yourself each month. Then when those special buys, or needed vehicle repairs pop up, you’ll be ready.
Life is unfair. A new, stronger competitor comes to town. Your basement floods, destroying your inventory, and you forgot the pesky insurance premium. An employee gets drunk on his or her lunch hour and has an accident. The city re-zones your business district. You lost your loading zone. Threats can come from anywhere at any time. It’s easy to say, “Don’t dwell on it,” but the way out is to assess the damage. Evaluate the best worst scenario and form a plan of action.
Some Final Thoughts
We’ve done a quasi-SWOT analysis. Looking at strengths, weaknesses, opportunities and threats. Ever since David and Goliath, and throughout military history, small bands of combatants have overcome much larger forces to gain victory. The business world has also produced many companies that have taken on the big box powerhouses and won. They have managed to not only coexist, but to also turn a nice profit in the process. Why not be one of them?