Ideas for small biz owners 🚧
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Ideas for small biz owners 🚧

Preface:

  1. I am not a business owner nor have ever been. So this stuff might seem legit in my head but in practice it might not work. Take it with a grain of salt. #ArmchairBusinessMan
  2. The reason I'm writing this is because I want small business owners to succeed. Since being back in the Soo during Covid, I've gotten to know a lot of business owners throughout my travels in the city. And these are really cool people doing really cool things. I look around my hometown and there are so many businesses that worry me because I think they aren't utilizing would I would consider the most effective marketing tactics.
  3. Most of the ideas that follow are grounded in psychology, specifically observations of customers and potential customers. IMO you don't want to fight psychology / user behaviour. You want to channel it to your benefit.

1. User Behaviour

  • Think to yourself, where are people β€” i.e. your potential customers β€” already?
    • Where does your ideal customer gather? And this will vary depending on who you are targeting, what you're selling, etc.
  • This can be both digitally and physical
  • Digitally:
    • Most people these days have some sort of social media app, such as Facebook (older gen) or Instagram (my gen).
    • If you are targeting my generation, it makes sense to be on Instagram then.
  • Physical:
    • Where does a critical mass gather?
    • I understand that rent at malls is very expensive; with that being said, if you have your own standalone store, customers will often have to make a specific trip OUT OF THEIR WAY to get your offering. Compare that with a mall, where there are people walking around in shopping mode.
      • I have seen so many businesses move out of the mall to their own standalone stores. From my POV, I assume the business owner thinks that they have a huge following and the customers will come to their shop wherever they are. However, I've seen a lot of businesses end up dying bc of this. It seems like a lot of their business was due to the fact they were in a place of critical mass and by moving to their own standalone store, they lost that.

A) You don't need an app

  • I think there's a craze where all businesses think they need an app because "everyone has an app these days"
  • With that being said, think about customer behaviour. Customers β€” i.e. people β€” are spending lots of times in social media apps. Do you honestly think you can compete with the budget of FB?
  • In terms of food and drinks, I know Skip The Dishes takes a good % of sales; however, they are a great aggregator. Whenever someone is hungry, they can just pop into the Skip The Dishes app. Skip the Dishes has a waaaaaay higher budget than a local business, it has UX/UI designers to make it optimized for sales and usage, etc.
    • Compare this with a business building their own app. Potential customers have to go out of their way to go into this business' own app. It's fighting user behaviour.

B) You don't necessarily need to be on FB, Insta, TikTok, Tinder, etc.

  • I see a lot of small local businesses just firing up social media profiles on ALL mediums.
  • While I do agree you need to think long-term and "go where the puck is going", I think what ends up happening is businesses spread themselves thin and don't end up doing any of these marketing channels extremely well; they are just sort of meh.
  • Go to where your customers (current and potential) are. If you happen to be targeting older folks, go to Facebook.
  • FB and Insta is not a marketing strategy; it is a means to execute on a marketing strategy.

2. Use history as a guide

  • At the Northern Avenue plaza, there's a big department store space. It used to be a Kmart (I think?) then a Zellers, then a Lowe's, all of which have ended up shutting down and leaving town.
  • To me, this is a 🚩that something is wrong with the space. Not that there is something physically bad BUT that all the tenants of the space have not been able to achieve critical mass at that location and, thus, have had to move out.
  • I've heard that Winner's has thought about moving there and I really hope they don't because I like Winner's and I want it to stay in SSM. I have a bad feeling that if Winner's were to move there, they would share the same fate as Zellers, Lowe's, etc. before them.
  • This particular location would be a BRUTAL location for a locally owned small business. Reason being, if relatively big corporate companies like Zellers and Lowe's couldn't cut it at these locations, with their big pocketbooks, there's going to be no way that a small local business could cut it.
  • "If you build it, they might not come."

3. What makes you different? What are you the best at? How can the big guys NOT compete with you?

  • What is your secret sauce that no one else has?
  • You can't beat the big guys by playing the same game as them. They have waaaaay more resources in terms of $$$, human capital, and technology. So you have to invent a new game to play.
  • For example: trying to compete on price is probably a bad idea for most businesses in SSM. Reason being, there's a Walmart and Dollar Stores all across the city. You are never going to be able to compete with them on price bc they have the economies of scale with their purchasing power that a small local business can never match.
  • Pour as much resources as possible into your differentiator.

A) Be wary of tech and software sales

  • This blends point 3 with point 1.
  • Social media, online analytics, etc. are hot right now so business owners feel like they need to "jump on them" or else fall behind.
  • With this being said, I know a lot of older business owners who they don't really understand this stuff.
  • As a result, they end up putting their complete trust into another company that may or may not have the small business' best interests at heart. I have seen many a small businesses get taken advantage of due to the information aysmmetry between the provider of services and the small business owner (provider takes advantage of them).
  • It seems like me to put more money into your differentiator RATHER than just trying to tread water with technology.
  • If you do need to use technology, see if there's a provider who can gradually teach you how to understand the thing it is that you are doing + can teach you how to do it yourself ; vs. becoming depandant on them
    • Further, if they are confident in their product, why not make their compensation performance-based? If you do better with the services they offer, then they will do better.

Quick fire:

Referral marketing

  • Real WOM is powerful in small cities. Get your name out there by arming your customers with your pitch / value prop. Get them to sell on your behalf.
  • It's basically creating your own salesforce without having to pay them (substantially) to do anything. Maybe give them a free X whenever they refer Y number of customers.
  • Spend on customer acquisition cost >>> spend required to get a previous customer to repurchase.

Five star reviews

  • When I lived in San Francisco, we used to ALWAYS check a place's reviews in Yelp prior to going there.
  • It isn't as widespread in Canada, but I think it's only a matter of time before it reaches smaller cities.
  • See Five Star Reviews article

Adapt, experiment, fail,

  • Just bc things have been a certain way in the past doesn't mean they will continue to do so in the future. Hume's problem of induction.
  • How can we try this out PRIOR to investing huge $$$ into it

Active vs. Passive advertising

  • Putting up a sign "we have X" here does not seem very effective. When you have a problem that X can solve, do you immediately think, "I'm going to drive down Great Northern Road and I will see that sign that tells me that you solve X"? No! You go online!

Written (partially): November 2, 2020