In many ways, the moniker small business is a misnomer. When you consider that the average entrepreneur takes on the tasks that a big business parcels out to hundreds if not thousands of employees, a small business doesn't feel so small. The consensus among most small business owners is that big-box competition is a real threat to the small business owner. However, the things that make a small-business owner unique is what makes winning the big-box battle possible.
Behemoth retailers with their ability to monopolize distribution channels, spend more on marketing than you make in a year, offer loss leaders at will and enjoy volume discounts do make it hard for the small business to thrive, especially when the business is a startup. Big-box competition can also be a problem for start-ups because it takes some time to be recognized and accepted in the marketplace. However, small businesses are everything that big businesses aren’t. Generally in a big-box store, you’re lucky to find help and when you do, the employee often doesn’t even know if the store has the item and there’s no guarantee of the quality of the product. Go into a small retailer, however, and you can enjoy speedy, personalized service and higher quality products.
Many small business owners feel that the key to keeping a small business thriving is relationships. Businesses that survive over the years are the ones where the owners and employees develop relationships with customers. Small business owners should also engage customers with services like Groupon and Living Social to compete with big-box retailers. Getting customers into your business and building a relationship with them can keep them from jumping on the big-box bandwagon.
Building relationships with your local government can also work for your small business. Businesses that get the most support from local governments are the ones that reach out and become a staple in the community. Making an investment in your local community is bound to positively affect your business. For example, join the Chamber of Commerce, be a fixture at community events, volunteer to serve on local boards – all of these will help you obtain more support from your local government.
Keeping these things in mind can help your business thrive as you work to attract and build relationships with customers and your community.
Going lean - It's not just for automakers and industrialists anymore. Strategies for stream lining that have traditionally been the stuff of factory floors are now within reach of small businesses. And technology is helping small-business owners achieve it faster. Software developers suggest that by tying in some app-driven tools, going lean can be more powerful and effective than ever before.
Simplify processes and reduce repetition.
Apps are increasingly the go-to tools for the endless pile of invoices, accounting worksheets and reservation logs that plague small businesses. And it's not just about automation. For example, a work-request submission could automatically create a draft invoice, schedule a meeting, add a contact to the CRM, create a new item in a project-management app, add the customer to a newsletter, and send the consultant a text message summary. All of this stands to cut administrative costs, again putting more resources toward business growth.
Your frontline workers become your key problem solvers.
Just as your customers are the key bearers of information about your product or service experience, your frontline workers are your best-informed sources for resolving internal situations. Free them from low-level tasks (as outlined in step 1), and get them involved in process reconstruction. The builders of lean industry knew this: They created "kaizen workshops" where employees who worked on the frontline and were familiar with the day-to-day details were instructed to tackle some of the hardest problems top-level managers wanted to solve. As your predecessors at that scale discovered, deep familiarity breeds deep insight when it comes to problem solving.
Introduce an "andon" cord.
In the old school lean factory, there was a tool that helped reshape how challenges are met. The tool is the andon cord. Pull it and the line stops. The idea was that the individual could save a whole project with a quick-enough response. Think about how this applies to problem solving in a small business. The dishwasher discovers that a glass cup is broken—he shuts down the prep lines before any more food goes out (preventing a dining-room catastrophe). Your shipping manager discovers that a pallet of boots instead of sneakers left the dock; she stops the trucks before they move another mile (saving fuel and time). Give your employees the equivalent of the andon cord, and they can stop the system and introduce a new piece of information or a warning. This is both authorized and encouraged. Empower your team and cut the waste, and potential damage, out of chain-of-command slowdowns.
Promote just-in-time problem solving.
The next step is that problems should be prioritized by a just-in-time process. Like a pyramid, you consider the problem with the highest impact potential to be in the top 20 percent of the model, and everything below those are secondary or tertiary focuses until they emerge as significant pain points. Sometimes they never do, but you deal with each solution at the just-in-time level. Additionally, as the automation from step 1 takes root, more free time becomes available to your team. And with it, you can start working on the secondary problems.
Streamlining your business processes can save your business and employees time and money. Some of these solutions may not be directly related to your business model, but finding ways to apply these concepts can be a huge help for your business.
Getting a small business bank loan is never easy, and it’s been especially difficult since the financial crash of 2008 and the lingering credit crunch. Even though small business lending is rebounding somewhat, it is still virtually impossible to get a loan to open a new business because lenders want to see a financial track record for your business that demonstrates your ability to repay the money they’re lending you.
What are your options for financing if banks aren’t willing to lend without knowing if your venture will be successful enough to make good on your obligation? Most entrepreneurs start their businesses with savings; they put startup costs on credit cards or get loans from family and friends. The void in bank lending has spurred the growth of alternative lending, which can be costly but gets money to entrepreneurs quickly and without a lot of hassle. One example of this is crowdfunding through websites such as Kickstarter and Indiegogo.
Some niche alternatives that have sprung up are less well known. For instatnce, culinary businesses can apply to the Whole Foods Local Producer loan program, which lends money to businesses making local food products. Many franchisers also help prospective franchisees with financing after home equity, which was once a common source of startup cash, plunged in many parts of the country.
Perhaps a more realistic option for you is connecting with a nonprofit microlender. A microlender is an organization that makes business loans to individuals. They typically charge higher-than-average interest rates and their maximum loan amount is usually $25,000.
Once your business has been operating for two to three years, a bank loan may be a realistic possibility. Showing your business has a proven business model with steady, paying customers can make the loan officer’s job easier when deciding if your business is a good risk. Don’t be afraid to take the plunge when it comes to starting a new business – inform yourself of the options available to you to launch your business and you’ll be up and running in no time.
Bean Counters Bookkeeping is a virtual bookkeeping business; so that you can focus on what is important, your business. www.thebeancountersbookkeeping.com