Gooroo teevee and radio business advisers tell you about known, familiar places to do business. But is this always the right advice?
Shopping centres, many industrial parks and online retail platforms can be lucrative but how come so many small businesses fail in these “comfortable” places? The competition is fierce. Customers have so many local shopping centres to choose from that they are sparsely spread out.
The margins are thin battling it out on main street with high rentals, competition and increased overheads including energy, labour and transport. Once you’re locked into where you “must” to business, then you have to do everything to pump sales and slash costs or hand over the keys to the landlord.
It’s not for everyone but there are places to do business where the rentals are low, the customers are plentiful and the profit margins are healthier. These other smaller centres are in the inner cities where customers in the mass market do their shopping. They get there with public transport or minibus taxis. But you’ve got to know what you’re doing.
In a local central business district a pharmacy owner, for example, is trading in a tiny shopping centre where the pedestrian trade is bustling. The discount pharmacy has plenty of business and the margins are good because costs including rentals are low. Some may consider this place a risky area to do business but the owner and his wife have learned to operate in this less formal, thriving marketplace.
Entrepreneurial professors and business advisers may copy pages from innovation textbooks citing concepts such as “Crossing that Chasam”, “pivoting” and “business canvas”.
But what about the ordinary small business owner who figures out for himself or herself where the money is?
Let’s not knock professors and business gooroos.
Their stuff can be helpful.
But if you want the competitive edge you have to figure out things for yourself.
The pharmacy owner has innovated with location and catering for a distinct niche with a competitive value proposition.
This “innovation” is no less worthy than what’s scripted by academics in their books, lectures and TED talks.
If you’re looking for the difference, the competitive edge, look past the familiar.
Pull back the curtain and go find out where the real action is taking place.