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small business news
May 2020
Volume #21 Issue #6

We have observed three kinds of businesses since March

This month we are going to look both forward and backward examining what has happened, and what we expect will happen with our businesses. Forward is very challenging because of the differences in state to state and province to province experiences and regulations. The immediate future is perhaps the hardest because of the rapid changing directives by the local and national governments.

We will start with what we have seen happening in our businesses followed by what we expect to see as we anticipate these changes to our normal routine fading away.

Since March we have seen three types of small businesses. We put businesses into the three groups based upon their reactions and in some cases, actions, to what has happened since early March. As we describe our observations please note we write this only as a means to entice you to look at yourself. We are not suggesting which is the right choice for you as only you know the circumstances of your business and yourself.

Our intent is to simply provoke your thinking about what you will be doing going forward.

The first group of businesses initiated what we consider to be a defensive maneuver. Some were proactive and closed their businesses before the series of announcements within their state or province were made. Others closed as soon as they were required to. Within each state or province there are businesses that are declared "essential".

While the title of the "essential" list implies a business providing products or services that are necessary, small businesses could look at the list as determining whether or not they could be open in addition to offering curbside and delivery services. And yes, you do have to wonder how some industries were determined for essential or non-essential.

My concern for those who closed their business, is the expenses that are going to continue; rent, utilities, taxes, insurance, and perhaps the cost of inventory that is sitting in the business. The NBDA, (National Bicycle Dealers Association) reports 21% of bike shops in the US are in this group. However, bicycle shops are considered essential in most locations.

In some situations the physical size of the business would not allow enough customers inside. In some states, regulations have been enacted which determine certain products to be "essential" and others "non-essential".

Again, it is the decision of the owner to make, but I want to suggest a business make some kind of an effort to keep their name and business in front of customers. "Out of sight; out of mind", is the old saying. Bringing a business back to life could be an experience similar to starting a new business.

The second group is "fighting the fight" to get business. Our observation of this group is through their emails and Facebook. We have made a point to turn on the television to see who is advertising and what they are saying in their ads. We have yet to see any small business doing anything by direct mail, postcards, or other forms of mailing something to their customers.

We see in the overwhelming majority of these efforts the traditional "item and price" advertising. We note a men's clothing store that intensified their email campaign announcing the spring merchandise arriving daily. Added to this was "item and price" in the form of a "you can help us and we can help you" campaign of discounting gift cards.

Another example is the jewelry store whose advertising looks in April exactly as it did in February - item and price advertising. And yet this store is subject to mandated closing.

Perhaps this is one occasion where small business can learn from bigger businesses. You see little or no "item and price" advertising by grocery stores and chain store pharmacies. People are just appreciative that a business has what they want to buy.

The chain restaurants we have observed are sending messages of a complete package; meal for four or five people with dessert and a bottle of wine. Packaging like this means the customer can't look at the menu and do the math to see if they are getting a "deal" because some of the meal items are new. The restaurant is simply enticing customers with a "we'll do the cooking tonight" message.

With people getting out less, whether it be by restriction or by concern, we do not see item and price advertising as being a working solution. Nor do we see the logic of the "help us stay in business" advertising messages. Their message may be true, but the customer surely has enough concerns of their own.

We wonder if this second group is the result of their advertising being planned well in advance and no one has thought to change or stop the advertising.

The third group is one of very adaptive business owners. They have observed the changes in people's lives and have begun to adapt their messaging and sales efforts. Locally we noticed a business that on March 22, took out a large window and made a pick up counter for their customers. Definitely a business thinking ahead.

We have seen others that have quickly changed the payment methods they accept as people are not wanting to handle cash as much as they did. In addition to Discovery and American Express, do you accept Amazon Pay, Apple Pay, Google Pay, and even SMS/text payment? People are becoming comfortable with these.

Forced changes in people's lives are making them accept these technological options. While a person may prefer to see their doctor in person, tele-medicine is quickly becoming accepted because of the required separation.

We watched a floor covering dealer who purchased a trailer, had a wrap of advertising put on the trailer and offers their store at your home or business.

An appliance dealer opened their warehouse into a sales floor as we see people wanting more space around themselves. We also saw an appliance dealer who converted a part of their parking lot into a sales floor.

Businesses that lost sales to subscription services (think of Chewy pet supplies, Harry's shaving supplies, and your home furnace filters) have the opportunity to take this business back in the immediate future as subscription services are seen as unnecessary indulgences.

We also see an advantage a small business has over a chain. As a small business you can reopen and start business. With a chain, they also have their distribution system and home office that has to restart. Think of a chain with corporate headquarters and warehouses in states that will be the last to reopen. You may find their local store or restaurant being closed longer as they await the rest of their business to restart.

Sincerity and concern; people are looking for a big dose of this. We know small businesses like to think they are far superior to the corporate competition, but the reality is we as small businesses are not providing what we can for our customers. Call them; write to them as individuals but not as a group.

If you are in this third group, or think you want to give that method a try, we believe you will find customers who are more forgiving to an effort that fails as long as it represents a sincere effort to be of service to them.

Most definitely you can see our bias toward the third group. We see opportunity and we see a necessity for our marketing to change now and for the foreseeable future.

 

Who is visiting Small Business Converations this month? - Ken Banks! - member of the retail advertising hall of fame

As we mentioned above, marketing is going to be different going forward. Not that people will permanently change the way they have done things. Instead we think there are going to be some additions as well as areas where there will be less resistant to changes.

Ken Banks has an extensive history of being the head of marketing for many well known brands. He comes from an advertising agency background. And he is a sought after advisor. He is also a good friend who has agreed to be our guest on the Small Business Conversations program in May.

We are not ready to announce the date of the program as there are so many things that are continuing to change regarding small businesses.

Watch your email for the two announcements that will be in your mail box before the evening of the May Small Business Conversations.

Ken and I have already had a conversation about the topic for the program and are excited about getting together to share our ideas.

What does it take to make a buck?

We believe that decisions should be made on the facts that are exclusive to your business; not because someone makes a suggestion in a newsletter, blog, or Facebook page. And definitely not because they are standing before a group of people who are expecting the individual to be an expert. You need your information to make the right decision.

That is why we have created the extensive quantity of calculators on the Profits Plus website. Each month we highlight one of the 47 free tools on the Profits Plus website; we call them "calculators". While some provide analysis by numbers and ratios, some are assessments and others are self-examination questions.

Many are downloadable while others, because of the complexity of the calculations going on behind the scene, are a part of the website and allow you to print your answers. None of them require you to give any personal information nor are there any "cookies" tracking you or your information.

A calculator we want to feature this month helps you to determine what it takes to "break even" in your business. While the majority of the readers of this newsletter are taking a forced "pause" in their business, this could be a good time to determine what it will cost to make your business profitable.

 

 

 

 

 

 

 

MAY 2024
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Small Business

AdvisorieS

The May Small Business Advisory is titled "Planning for a successful accountant" and is appropriate for many with the April 15 tax deadline having passed.

 

Did you work with your accountant? Or, did you just give them a bunch of papers and wait to receive a completed tax return?

 

Successfully working with an accountant requires a partnership. This month's Small Business Advisory gives suggestions of how to make this happen in 2024.

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We see that many small business owners have too much of a focus on the "top line" of their income statement.

 

Increasing revenue is great, but it is not a cure all for any challenges your business is facing. And sometimes, incresing revenue can create a challenge.

Article of the Month

Who is your customer? Some small businesses have no focus. Their customer is whoever calls or walks in the door.

 

And some small businesses have determined which customers, in sufficient numbers, they should spend their efforts to attract.

 

The article of the month shares an old Southern rhyming couplet about business; "The bertter you niche, the more you get rich."


Book of the Month

Lean Startup by Eric Reis is our suggested book for May.

 

As the title suggests, the reader of the book would be someone that is starting their business. However, we see more value than just that.

 

Perhaps you have been in business for many years. We think this book could give insight to items, and methods, that a small business owner should think about with their business today.

BOOK US

With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.

Small Business

Advisories

The May Small Business Advisory is titled "Planning for a successful accountant" and is appropriate for many with the April 15 tax deadline having passed.

 

Did you work with your accountant? Or, did you just give them a bunch of papers and wait to receive a completed tax return?

 

Successfully working with an accountant requires a partnership. This month's Small Business Advisory gives suggestions of how to make this happen in 2024.

Small Business

News

 

Top Story

We see that many small business owners have too much of a focus on the "top line" of their income statement.

 

Increasing revenue is great, but it is not a cure all for any challenges your business is facing. And sometimes, incresing revenue can create a challenge.


Article of the Month

Who is your customer? Some small businesses have no focus. Their customer is whoever calls or walks in the door.

 

And some small businesses have determined which customers, in sufficient numbers, they should spend their efforts to attract.

 

The article of the month shares an old Southern rhyming couplet about business; "The bertter you niche, the more you get rich."


Book of the Month

Lean Startup by Eric Reis is our suggested book for May.

 

As the title suggests, the reader of the book would be someone that is starting their business. However, we see more value than just that.

 

Perhaps you have been in business for many years. We think this book could give insight to items, and methods, that a small business owner should think about with their business today.