Small Business Survival
by
Jerry W. Thomas
In today's uncertain economic climate, the first priority for the small business
entrepreneur is survival. A glance at newspapers, business journals, or cable
news channels reveals a succession of corporations struggling, and often
failing, to avoid bankruptcy. In such tough times, knowing how to achieve
long-term success is more critical than ever.
The most important thing today's small businesses can do is expose their
organizations to critical self-analysis. Small businesses survive not by
competing head-on with global corporations, but by pursuing the market niches
larger operators ignore. Such a strategy requires constant attention to detail,
necessitating self-analysis well beyond the operational level; it is crucial
that everything from the basic business model down to the operation of the
mailroom is subject to rigorous study. This means determining what, precisely,
the business is aiming to offer its customers, how this differentiates it from
its competitors, and how well it is delivering on these core products and
services.
Much of this analysis can be readily conducted by the business itself, but
a substantial part of a company's success is down to perception—how customers
(existing or potential) view its products, services and overall performance.
However, determining such perceptions is notoriously difficult for companies
that typically lack personnel trained in the specifics of marketing and advertising.
The most obvious alternative, turning to outside experts - dedicated market
research companies, for example - is often impossible when money is tight and
budgets small, but this does not mean entrepreneurs can ignore the example set
by the most successful corporations. What almost all business success stories
have in common is a relentless commitment to factors that reinforce competitive
advantage: product research and development; marketing, advertising and public
relations activities; and customer relations.
What the most successful companies have recognized is that survival hinges on
two separate, yet intertwined factors - being the best, and being recognized as
being the best.
Being the best requires a commitment to excellence in all areas. That means
small business leaders cannot shy away from hard decisions, where employment is
concerned for example. Staff that consistently fail to perform must be replaced
with those that will. The smaller the company, the more difficult such actions
may be to take, but they are essential. Similarly, leaders need to ensure they
have staff who are prepared to do what it takes to deliver results, no matter
if that means asking for a commitment from staff far greater than business
rivals demand of their employees.
Being the best also requires a company to recognize when it is lacking in
excellence in key areas, and to identify whether that excellence can be
delivered through hiring new employees, retraining existing staff, or seeking
outside counsel. Money invested in improving core business competencies is
never better spent than in tough times like today, because it directly impacts
productivity, sales, and perceptions.
Making sure a company is recognized as being the best is often seen by small
business entrepreneurs as secondary in importance to "real" issues such as production,
distribution and sales. The common viewpoint is that if the product is "right"
the customers will buy it. Yet it is precisely this attitude that dooms many
businesses, regardless of the quality of their products
or services. Small businesses need to give as much attention to their public
relations, marketing and advertising strategies as large corporations.
Many entrepreneurs cry that this is simply beyond their means—they cannot
contemplate spending tens of thousands of dollars on "fancy" market analyses
from specialized researchers. The argument is valid, but consider this: if marketing,
advertising and public relations dollars are in short supply, how critical is
it that those dollars are well spent? A small business can far less afford just
one marketing effort to miss its target than can a huge international corporation.
What small businesses must do is learn the core skills marketing experts take
for granted. They need to take every opportunity to speak to customers,
potential customers and vendors to uncover how well the company is perceived.
Likewise, a simple analysis of publicly available materials (such as census
data) can help a small business better identify key target markets, reducing
the waste of valuable resources inherent in blindly blanketing an area with its
advertising. Such an analysis might lack the sophistication of a professional
market analysis, but it can make the difference between success and failure -
and there is nothing to stop the company utilizing a more professional analysis
in the future when it is growing strongly.
It comes back to the issue of self-analysis. If a company has a clear vision
of where it wants to go, the task of identifying its market, and the optimal
ways to attack that target, is much easier. This allows for a concentration
of limited resources where they can best help deliver success. Such a focus
of effort lies at the heart of corporate survival, no matter if the company
is large or small.
Copyright © 2003 by Decision Analyst, Inc.
This article may not be copied, published, or used in any way without written
permission of Decision Analyst.
About the Author
Jerry W. Thomas (jthomas@decisionanalyst.com)
is President/CEO of Dallas-Fort Worth based Decision Analyst. He may be reached
at 1-800-262-5974 or 1-817-640-6166.
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