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3X3 Keys to Retail
Most people don’t know that 85% of all U.S. businesses are micro businesses. A micro business is a business with fewer than 10 employees. Although Fortune 500 Companies get all the press, micro businesses truly sustain American ingenuity. According to the Small Business Administration, micro businesses generated 64 percent of net new jobs over the past 15 years. Micro businesses produce 13 to 14 times more patents per employee than large patenting firms, which is a leading statistical indicator of innovation. All businesses were once micro, so its important to know the key success factors of micro commerce if growth is a part of your business plan. Let’s draw insights from the Retail Industry.
Now If I had to guess, I would say that a little less than half of all U.S. micro businesses are in the retail industry. A retail business sells goods to the public for use or consumption rather than for resale. This would include food & beverage businesses like coffee shops, pizzerias, lunch trucks, and some restaurants. Merchandisers like apparel stores, gift shops, and bookstores would also fall into this category. Retailing is so attractive to entrepreneurs because of its simplicity. Everybody knows how to buy low sell high, smile at customers, and place an ad. But often times, retailers fail to mature in the three strategic areas most vital to their success. I call these the 3X3 Key Success Factors of Micro-Business Retailing.
- Customer Service
- Company Culture
- Employee Training and Development
Consumers have been empowered by the emergence of social media, increased access to information, and the high degree of choice in retail. Most micro businesses try and cater to the “empowered consumer” by bending over backwards and calling it, “superior customer service.” Yet they fail to realize that customer service is an extension of your company culture, and your culture is reinforced ONLY through training and development initiatives.1. GOOD 2. FAST 3. CHEAP NOW, PICK TWO of the THREE
Fast food is fast and cheap. Restaurants are good and fast. And Home Cooked Meals are good and cheap. The point is that, as a retailer, you have to know how to represent your products. In the retail food & beverage sector, the Good-Fast-Cheap Triangle clearly illustrates the trade-off of dining. Most people go out to eat because home cookin’ is soooo time consuming. So from a consumer’s perspective, FAST is already a part of the equation. For them, the only question is whether they want to save some money or eat well. AND IF YOU’RE THINKING… well, McDonald’s is Good, Fast, and Cheap. Watch SUPER SIZE ME, case closed. As a retailer, you will have trade-offs. Some micro-business owners mistakenly try to be the low-cost leader and high-quality retailer at the same time. You have to know your strengths, accentuate your positives, and don’t fight losing battles.
Data mapping is the process of merging distinct data sources in an effort to improve the quality of information. Some retailers have market research, point-of-sales reports, financial statements, and sales forecast. Data mapping merges these sources so that you can make better business decision. Based on the data, retailers should identify problem areas and eliminate waste in the operation. This is known as continuous improvement.
Innovation always springs from knowledge of industry and knowledge of customer. You have to know your market well enough to diagnose problems and unsatisfied customer “needs.” New products and services are an entrepreneur’s prospective solution to a recognized problem in the market. You should also research and develop new products in your industry so that your offerings are current.
The 3X3 Key Success Factors of Micro-Business Retailing will keep you focused on the right things. A business is an organization, and no organization does everything well. There are so many different elements and expertise needed to survive in a competitive market. At some point you need to hire talent that can help you improve in a few of these areas. Don’t Be A DAVE.