When you’re a small or medium sized business, it can sometimes be tough to figure out how to set yourself apart from the competition. You may have something that people want or need, but you’re struggling to define how you’re different from other, similar companies. On the other hand, you might not even have reached the point of convincing people that you’re selling something they want. The struggle could be about convincing people where to spend their discretionary income. In both cases, however, what you’re really trying to do is put your business ahead of the competition. The tips below can help you with either issue.
Know What Problem You’re Solving
How many businesses do you see close doors each year, some of them within just months of opening? The number one thing that a business must do is offer a product or service that a customer needs. This means identifying a problem and understanding what you’re doing to solve it. If you can’t define what problem you’re solving, this might indicate a fundamental problem with your business plan, or it could just mean you need more clarity.
Being able to define this ensures that you’re offering something that customers will want, but there’s an additional benefit. You will also better understand how to communicate with your customers. You’ll know how to explain the importance of your product or service to them in both your marketing and in one-on-one interactions.
Offer Customer Financing
It’s easier to get people to spend money during times when the economy is on the upswing, but the truth is that people are always worried about their finances. In good times, they expect flexibility and convenience in how they pay, and in tough times, they need it. Offering payment plans is a good way to provide flexibility and convenience. Financing plans can be helpful to your customers in almost any kind of enterprise, from a med spa to a veterinary office and a dental clinic to any other kind of service or retail business. It can boost sales along with customer satisfaction. It can also put you well ahead of your less flexible competitors.
Consider Loyalty Programs
Loyalty programs can be a great way to reward your most faithful customers and to entice others to keep coming back. There are several different ways to set up these programs and rewards, and understanding what your customers want is key to success. Rewards could include early access to sales and discounts, free merchandise, and helpful information. How the program is administered will depend on the type of business you have and what you know about your customer preference, but keeping things simple on their end is key. Whether you build an app and track activity or you simply offer a punch card where they get every tenth purchase for free, the rules and rewards should be clear.
Think About Cash Flow Issues
As a small business, you might operate on a thin margin. This can put you in a precarious position if there’s even a small downturn or if someone is late in paying an invoice. At the same time, advice along the lines of have a cash reserve is about as helpful as being told to be a millionaire or find an angel investor. If it were that easy, you’d have done it already. However, there are several things you can do improve cash flow issues.
First, you need to know exactly what’s coming in and going out. Keep careful records, and if you’re not good at this, it’s worth hiring someone who is. Understand what’s selling and what isn’t so that you can manage your inventory and pricing accordingly. Send out invoices on time and follow up on them. If you work on a project basis, get deposits up front before you begin work. Make future projections so that you know what you need to do going forward. Some of the cash flow problems small businesses face come down to bad admin and bookkeeping practices.
Always Look for Savings
You should always keep one eye on how to spend less if it isn’t affecting the quality of your goods or services. Could you lease some equipment instead of buying it, or purchase used equipment? Be ruthless in assessing the size and location of space that you need. Some types of businesses will need to be in places with a certain amount of footfall or in a particular area. But don’t let your ego lead you into renting expensive space that you really don’t need.