Why most small businesses lose (and how you can win)

You don't have to go back very far in history to discover a time where owning a small, family business was considered a viable career path. One that was the main source of family income and put food on the table every night.

Not too long ago, most people lived in the same small town their whole lives. Venturing out from a town where everyone knows you and you know everyone was not common nor particularly easy to do. Sure, if you had a car, you could physically travel. But, there was a significant lack of basic conveniences we take for granted today: fast food, safe, clean hotel options, and directional or roadside assistance.

While some major department stores opened in the 19th century, those were mainly located in cities – not small towns. Shopping local didn't need a branding campaign, because there really wasn't an alternative. For most people, shopping local was the only way you bought groceries, clothes, hardware, and anything else you wanted.

By these standards, if your business met a need and had a visible spot on Main Street with decent operating hours, you could expect to do pretty well just by turning the OPEN sign around in the mornings.

Today is very different.

What's interesting, though, is that we (as humans) still love the social ideal of a small town. We love feeling a “part” of a community. We love knowing others and being known by others. We consistently rally behind political platforms that preach the importance of family values and small business.

The problem is that although the social ideals of shopping in town or supporting “local” still appeals to us emotionally...the truth is, we simply don't shop that way. “Shop Local” has become an actual term because there are so many other alternatives today!

The OPEN door policy on "Main Street, U.S.A." doesn't work anymore. You can't assume people will come through your door simply because your door exists.

So does this mean small business is dead?

Absolutely not.
It just means that we have to do things differently than our grandparents did.

You are already, by definition, different than Wal-Mart, Amazon, & every other “big box” store. All you have to do is figure out WHY being different is valuable to your customers.

To be very clear:
You are NOT competing with these guys on their terms. That would assume you are doing things the same way and you have the potential to do it better than them. You are not and you don't. That would be like David trying to take down Goliath with his own sword.

You (a small business) simply cannot compete with Amazon, for example, on the value of price or variety.

Instead, you have a very clear objective:
IDENTIFY WHAT YOU CAN DO THAT AMAZON CAN'T.

Sound like an impossible task?
Not at all. It's just one we fail to consider. We tend to focus on everything Amazon or other big box stores can do and fall into despair.

It's true, they can do some things far better than we can. But it's also true that we can do some things far better than they can and sometimes we can do things that they will never be able to do.

This question is something you have to seriously ask yourself as a business owner. And, truthfully, if you can't think of anything you can do better, then you should probably consider that your business may not be a profitable idea at all. Harsh, but true. Better to not waste thousands of dollars and countless hours playing a game you can't win.

On the bright side, most of us can do a handful of things better than the “big box” stores. What's surprising is that a lot of this is so common sense, we've never considered it leverage before.

Be the local expert.
We can access more products or services online than ever before. But what that access cannot do is advise us on which product or service is most beneficial for our specific situation.

YOU are local.
YOU have the ability to listen & assess your customer's specific need.
YOU have the knowledge & experience to be an advisor for their unique situation.
YOU are the expert.

Your story cannot be copied.
I'm going to go out on a limb and assume none of us have a personal connection to Jeff Bezos. He's never emailed you or called you or sent you a hand written thank you note, right?

Why does that matter?
Because as much as we love our Prime membership or our “one click” ordering, as soon as someone else figures out how to do that bigger, better, or cheaper...we'll move on to that.

As a small business owner, our major leverage is WHO we are and the STORY our business tells about us. If this is your first time hearing this concept, I'm sure you are having the same gut reaction I did:

“This is fluffy and cheesy. No one actually cares about my story or the face behind the business.”

My gut reaction was wrong.

Remember what I said earlier?
We all still love the social ideal of “small town, USA.” It's true.
That's why we chant “shop local” while we renew our Prime account for another year. Despite our sometimes insatiable hunger for convenience or instant gratification, we deeply long to “fit in” and be “a part” of something bigger. It's why we don't live in isolation. We like to make connections with others. That's why billions of people are on social networks: to reconnect or share their life with others.

Your story as a business owner is the most important, unique offering you can leverage. You (the owner) can personally assist your customers, call them to follow up, and have the ability to know their personal stories as well.

Connecting to others through your own story is a powerful thing.
If you do it well, chances are that you'll be top of mind the next time they need something you offer. And chances are, they'll choose YOU regardless of what is “bigger, better, or cheaper.”

If this still sounds too “fluffy” to you – try this:
start calling customers one week after they've purchased your service or product just to say thank you. Not to sell them on anything. Not to tell them about this week's offer, but just to say “thank you for shopping local with me.”

Let me know what happens.
I think you'll be surprised.
And I bet Jeff Bezos has never done that.

Create a value beyond your product.
By becoming the local expert in your industry & sharing your unique story, you begin to create something that has value for your customers beyond your product or direct service. As I said before, especially with the “big box giants,” us small guys simply can't beat their value of low price or wide variety.

That would be like David fighting Goliath with the same weapons.

So we find our “slingshot” to deliver the best value to our customers.
When you position yourself as an expert with a unique story or mission, you start to build an arsenal of valuable content for your customers that builds trust. The best way to identify what your customer considers valuable from you is to listen to what they say!

In my store, I noticed that we kept getting the same five questions about how to use our products. So, instead of repeating them over and over, I put together a video tutorial you could watch online. I created a way for customers who were interested to sign up to receive the “FREE” video series.

485 people signed up in two weeks.
That was obviously pretty valuable to a lot of people.

In conclusion, small business owners should take great pride in today's marketplace. We tend to focus on our "smallness" as a weakness instead of an asset. But realize that having to differentiate yourself actually sharpens your service and makes you more valuable to your community. You are contributing something no one else can. 

How do you beat the “Goliaths” of your industry?
Not by using the same swords they use.

You beat them when you find your slingshot.