What Is YOUR Biggest Problem? What Keeps You Up At Night?

[Biz Optimizer]

In an attempt to reduce the small retailers falling victim to the mega-store in the 90s, I tried to start an Association of Independent Retailers. But they all told me "the big-box can't service my customer as I do". Months later, they were all gone. Millions of dollars of small business revenues vanished - and that is just the ones I knew in that small town. All because they didn't understand the business fundamentals that were working against them.

Now we are in a different financial crisis that hits ALL small businesses hard, and again small business is the most vulnerable. More and more businesses I am calling on are closed/gone. There are no bailouts coming at that level and the banks aren't passing the help down the line. And as with the 5&10's, independent sporting goods, hardware, and independent pet stores of old - they may not know what hit them when it is all said and done.

From the small business owners: I'd like to know what the small business owner in different industries thinks is his/her biggest hurdle/burden. What bogs you down - what holds you back - what doesn't go away at the end of the work day - what do you think would hold your head above water? What most needs fixing in your business?

From the consultants: How does the average small business owner survive, when he is good at his craft, but may fall short on the broad business experience required to thrive?

As margins become tighter and tighter, the number of people that can successfully run a small company alone gets smaller and smaller - is that just the way things will be? Thoughts?

[Logan]

I think you have a good grasp of things. When I talk to small businesses I don't run into them closing/gone, although I hear of sporadic occasions of that. What has struck me over the past month, in talking with others, is the number of people who work for companies that are communicating that there will be no raises/bonuses/etc.

Personally, this makes me thankful to be a small business owner ... as I do have the opportunity available to increase my earnings through my business ... while others simply do not have that option.

I think the biggest hurdle is tightening margins, as you mention. Competition is fierce out their for every dollar... and not all will survive ... but some will continue to thrive, imo. Not everyone is impacted equally, and personal efforts can overcome the current economic situation. It's a great time/opportunity to grow your business, contrary to popular culture.

[Floid]

For a small business owner to compete, they need to be as lean and efficient as possible. A lot of small business owners (mom & pops) don't realize how beneficial embracing new technology is. The old days of opening a store are not quite the same anymore.

It is almost pointless to compete on price against a megastore though, since they have the advantage of economies of scale. The most important thing a small business owner needs to do is use their familiarity of the region to their advantage, this helps a lot in grassroots marketing/word-of-mouth.

Also, another key survival aspect is focusing on a niche. A generalist mom & pop store won't last long against a megastore because "general stuff" tends to be price-driven and people will gravitate to low prices. However, being a jack of all trades means you're probably a master of none...that's especially true for a megastore. You can use that to your advantage and specialize in a few products. By doing that, you can have a differentiated offering than your big box competitor.

[Biz Optimizer]

Originally Posted by Logan

I think you have a good grasp of things. When I talk to small businesses I don't run into them closing/gone, although I hear of sporadic occasions of that.

Thank you sir - and I understand your points. But if you look around in the industrial parks, if you are cold calling businesses no longer there, and if you look at the empty retail centers today - you'll see they are failing. About 600,000/year - just on average. Here is just a weeks worth in Tampa http://www2.tbo.com/content/2009/mar...florida-tampa/.

The company I went to today's cost exceed their revenue for the past 6 months. They squeeze and hope that the revenue returns - it is all they know. They aren't sure how to make it increase. They aren't sure what they should be spending on things. All they can do is hang on and hope. They aren't on this forum (smile).

Probably you market to a larger - more able to pay client. This is a focus on the little person who was a good plumber, or some trade. Maybe the person who's family has passed down a small retail operation that can no longer run under 1960 methods. He/she created a "profitable" business, but is unable to overcome the big-box, the recession, the new law, the watering ban, or whatever the bump in the road is. They don't have the broad skillset to know where to turn - and there is very little available to help them.

That was the reason for this post. I wanted to see how many businesses would identify their problems - not revenue. I'm sure some know, but won't post. But I think most don't know - other than "not enough revenue". And so far, there are more answer posts than problem posts.

And the major consulting companies can eat these guys for lunch and often leave them worse off than when they started - as money runs out before solutions emerge. I am passionate about finding a way to fix it - for the little guy who can't afford $200-$500/hour.

[Biz Optimizer]

Originally Posted by Floid

For a small business owner to compete, they need to be as lean and efficient as possible.

It is almost pointless to compete on price against a megastore though, since they have the advantage of economies of scale.

Also, another key survival aspect is focusing on a niche.

These are definately the trends and reality today. But is it what we want for tomorrow?

If small business comes up with 90% of our innovations and creates over 50% of our jobs - do we want to let the small family business be pushed into "niche" only business? Are the days of someone being able to love and sell shoes, hardware, pets, etc. over? Will there be even fewer fields tomorrow - fewer still for our kids?

Or should we make a new reality that empowers the "average" person to compete effectively - not cripples the super-store? We find ways every day in business that allow lower functioning people to complete higher level tasks with more speed and less errors than before. We do it with systems - as simple as lines in a Walmart parking lot that eliminate the chaos that would be without them.

Do we just give up and say those opportunities are only for our predecessors - not for our kids? Seems like a bad route to take to me.

[Floid]

Well remember, a niche can be in any industry. So for the guy who loves to sell shoes, he still can. He just needs to be different than that megastore near him....either by focusing on a particular demographic or category of shoes.

However, I agree that small business owners should create a new reality. There are a lot of innovative start ups out there that are either giving the big guys a run for their money, or getting acquired by the big guys. The key is to be innovative and different.

[Logan]

The key is to be innovative and different.

I think there is some truth to that. My perspective is the difference between and offensive and defensive attitude/approach towards running the business. Notice these comments above.

The company I went to today's cost exceed their revenue for the past 6 months. They squeeze and hope that the revenue returns - it is all they know. They aren't sure how to make it increase. They aren't sure what they should be spending on things. All they can do is hang on and hope.

That is what I describe as a defensive attitude. They are on their heals trying to hold on. An offensive attitude realizes that times have changed, and they need to take action to adjust to the new realities. Innovate, create new markets, cut costs in creative ways, add value for the customer, etc.

you'll see they are failing. About 600,000/year - just on average. Here is just a weeks worth in Tampa

Thanks for the headsup on that. I'm sitting here in the Tampa area as I post and I have to say for the number of businesses here, I'm surprised there weren't more. I travel a bit across the country, and there is a difference from area to area. Tampa/florida is really struggling, but when I'm in Colorado things are down but no where near the level in florida. I bought some furniture today. The retail person (who works on commission) makes about half what they were before, its hurting and they are trying to hold on because there aren't any other options. She has a friend in Colorado who also does similar furniture sales, she's down a bit with sales ... but no where near the level experienced by the florida person. How low is it going to go? I dont know, but I'm sure there are areas of the country that are more impacted than others. The more things were inflated during the good times, the more severe the counter reaction in a market.

[BeTheBest]

I agree with Logan. It's all in the attitude... and possibly that too many have had it too good for too long?? I say that because I remember seeing (countless times) where stores in malls are NOT busy, and the staff are just standing around waiting for something to happen. What if they got up and tried to MAKE things happen.

Making it happen will depend on each particular company. In some cases, your product just needs to sell to another market. In others, it may require that what you considered a sideline should be brought into focus again; that sideline could be what carries you through the tuff times. (Maybe you can't sell as many shoes today; but what about a program that promotes making your shoes last longer?? It may be a little work, but every 3 or 4 bottles of shoe polish probably make up for ever lost pair of shoe sales; Creative and a slight re-position; your customers will probably end up thanking you!)

What about the best list of leads any company has? Past customers?? They are easier to sell because they have already been sold.

The other way I like to look at is by just doing a little math. Every idea or change does not have to hit the ball out of the park! Just increase some areas of your business by 10,20 or 30%; the sum total may surprise you when you see the actual total increase.

I hope that's inspired some.

[Biz Optimizer]

You are all right! In fact, if they knew of regression analysis, optimization, lean, six-sigma, or 10,000 other methods to improvement we wouldn't be discussing this.

But they were good at something - plumbing, retail, sales, whatever. Some built million dollar enterprises and lived good in the good times and were rightly proud of their accomplishment. But they put all they knew into it. They didn't know they weren't ready for the curve. And when the curve in the road came - they weren't prepared.

And they don't understand heels and feet and if you told them they needed to be more innovative or find a niche it would be more of an insult - as they don't know how to put innovative/niche wheels to the ground and get traction.

As some recent posts - they know that revenue is no longer covering costs. They see they need more revenue, loans, or grants - they don't see all the other paths to prosperity. And that is sad to me - sadder when unscrupulous consultants come in and take advantage of them. They've done all they know so, in their mind, all that can be done.

I own a recycling company too, and the two guys that are running it now have spent their life on the bottom of the labor ranks. But implement the right systems and they've done great for about a year now running the place. If we are going to save small business for the average guy - we are going to have to get off our heels, and be innovative. We that kinow are going to have to be all the things you guys said.

And as to the bankruptcies in Tampa - those are just the official ones in one district. I'm sure most businesses don't contact the attorney and pay thousands to close it out right - most just go away.