Small Business Tips

The Secret to Success for Main Street Small Businesses

Selling Delight: The Small Business Advantage

I was at a dinner gathering a few weeks ago, and some of the guests were talking about trips they'd recently taken. One of the attendees told a story about a weekend getaway, where his wife and kids visited an ice cream shop in Chicago. This particular ice cream shop was recommended by another family, so they were eager to go. One night after an incredible dinner, they decided it was time for dessert. So, off they went to this memorable place. After waiting in line and being sat, the owner of this remarkable small business walked up to their table to greet them, telling them all about his signature dessert. It was 75 scoops of ice cream with every topping imaginable, all piled into a massive bowl and placed in the middle of your table. It was massive, heavenly, and came with a price tag of $100.

Some of you may be saying to yourself, there's no way I’d pay $100 for ice cream. What patrons are willing to pay for at this particular small local business (and lined up out the door, I might add) is the experience, and the story they get to tell about it afterward. The kids couldn’t be happier, taking photos and posting them all over social media, while the parents sit in amazement. Let’s face it, I’ve never heard someone get excited and command the room of 30 guests talking about a $2.00 chocolate chip cone at the local drive through. Have you?  The reality is, the parents couldn’t care less how much this dessert cost, because the look on their kids face while devouring this monstrosity is priceless. The owner of the shop is shrewd; he's identified what makes his small business special, and that's what he's selling. Yes, it’s the 75 scoops of ice cream, more sprinkles and hot fudge than you could possibly swallow, but this place creates an everlasting memory, and people will gladly pay for that experience.

It’s not a level playing field for SMBs

Let’s face it, independent small businesses are operating at a significant disadvantage in our current economy. They have to pay a lease on their buildings, usually exorbitant insurance costs, utilities, labor expenses, inventory expenses, and a host of other bills just to keep the lights on and the doors open. In that sense, they have almost no chance of competing with huge companies that can leverage their capital, technological advantages, and economies of scale to undercut smaller, Main Street-style businesses – “Mom and Pops” – at every turn.

Think of it this way: Suppose you're a small business that sells shoes. How can you convince a customer to buy shoes from you instead of from Amazon.com? Thanks to your overhead, you can't sell your shoes as cheaply as Amazon can. You can't afford to maintain the inventory or warehouses that Amazon can, so you might not have the right shoes in the right sizes in stock at all times. You can't afford to be open 24 hours a day, so you can't sell your shoes at 3 a.m. the way Amazon can, and the customer can't buy shoes from you on his couch lounging around freely in his underwear.

That sounds hopeless, doesn't it? Well, it shouldn't, because you've got something that Amazon doesn't have. You have the opportunity to sell an experience. You have the opportunity to create a memory. You have the power to give your customers personal, hands-on attention. You can find out about their individual needs, and you can help them find exactly the shoes that will work best for them. You can give them a shoe-buying experience that will have them walking out the door smiling, and they'll be very likely to come back the next time they need a pair of shoes.

Relationships are Everything

The secret to succeeding as an independent business owner is providing value to your customers that they can't find elsewhere. As a small business owner on Main Street, the greatest value you have to offer is the human touch. You can do business the way that it's been done for centuries, with small business owners and their staffs developing relationships with the people of the communities they serve. Customers value those relationships, and they're willing to patronize the independent businesses that provide them.

No one is going to sit around the dinner table telling stories about buying shoes from Amazon. The process is efficient and relatively cheap, but it doesn't inspire interest, joy, passion, or loyalty. People will, however, tell stories about the ice cream shop that brings a mountain of ice cream to your table if you want it, and the people who hear the story just might decide to visit the shop. As a small business owner, you have the ability to offer your creativity, your heart, and your personal dedication to your customers. If you do that, you'll delight the people you do business with, and there will be no stopping you.

You may also like: The Fourth Industrial Revolution: Preventing Economic Collapse by Fostering Independent Businesses

Author: Charles Barr, Co-Founder & Director of LVRG Funding, a "boutique" small business funding company dedicated to helping America's small businesses thrive and grow. Charles is highly dedicated to the genesis of professional development, social networking and civic engagement, with a passion for cultivating creativity, entrepreneurship and a spirit of community.

Small Business Finance, Small Business Loans & Small Biz Funding. Could There Be Too Much Information Out There?

In today’s world, we literally have access to an ocean of information.  With very little restrictions, people can freely swim in the open sea of the Internet, just as you are reading this article on your laptop or mobile device.  The amount and variety of information available to us is appreciably infinite and the search cost has become much lower.  Although this has greatly improved our ability to make a more educated choice, it has also created a band of low quality, often inaccurate and misleading information.

Take healthcare for example, a study has shown that over 80% of all Americans look online for health information.  More and more patients are going to their doctors having already researched their symptoms on the Internet, and already convinced of their own diagnosis.  What is more, doctors are also increasingly turning to the Internet, with nearly half of doctors reporting using the notoriously inaccurate Wikipedia as a source of medical information.   

If you Google “information overload” you will be inundated with information: more than 7 million hits in 0.05 seconds. Some of this information is interesting: for example, that the phrase “information overload” was popularized by Alvin Toffler in 1970.  Some of it is mere noise; obscure companies promoting their services and even more obscure bloggers sounding off.  The overall impression is at once overwhelming and confusing. “Information overload” is one of the biggest irritations in modern life and it's getting increasingly worse.  

Recently, Amazon has filed lawsuits against users who wrote fake reviews on products for pay but admit that the activity is still prevalent, not only on Amazon but Google and other review websites.  Furthermore, countless web pages and affiliate blogs selling everything from dietary supplements to business loans boast bogus results and misleading cues.  The Internet has made it possible for us to buy virtually anything we can imagine, regardless of how ludicrous it may be.  Returning to the ocean analogy, we’re now playing in much deeper waters, where the waves are high and winds are strong.  To make the most of the current environment, especially as it relates to small business owners whose success often depends on obtaining realistic and truthful information, business owners need to filter through and search through an ideal set of information to maintain a competitive edge.  Another words, are you educating yourself on truthful and unbiased information, or just reading an affiliate website temping you with fake offers, in an attempt to entice you enough to click on a banner, or fill out an online application, so that they can earn a commission? 

While education and research is imperative for success, too much information can shroud sensible decision making.  Especially, when most of the the information you are absorbing is incorrect, or only half the truth. People are getting bombarded with information from all angles, and instead of becoming more educated and knowledgeable, often times they only wind up getting frustrated and extremely confused.  There is so much inaccurate and flat out false information being pumped into the public, it's hard to distinguish between reality and make believe. It’s one thing if you are buying the latest model basketball shoe from a popular retail website, you know if you order a size 10 Nike Air, you will get a size 10 Nike Air.  But when your livelihood and the livelihood of your family rides in the balance of obtaining the proper small business financial advice, you must be able to sift through the nonsense and understand that not everything on the internet is fact; nor are all small business loan sources created equal.  The Internet has been proven to be a double edge sword; one blade allows you to efficiently work through business matters and obtain information that otherwise may not had access to, while the other can hurt your effectiveness, as you have to constantly decipher what is right or wrong, authentic or apocryphal.  Just as fire is a wonderful servant but a terrible master, information on the Internet, especially as it pertains to finances, need to be carefully digested.

Peer to Peer (P2P) lending and Fintech platforms have been flourishing in the last 5 years, and so has the number of specious lenders increased, just as some of Amazon’s reviews have become tainted.  Banner ads fill your screen and pop-ups appear on every web page you visit offering teaser rates on business loans and merchant cash advances with ridiculous rates.  It's been said that common sense isn't so common after all.  Do you really believe that a random telemarketer will offer you a small business loan at bank rates, while overlooking poor credit, minimal time in business, lack of cash flow, tax liens, judgments and bankruptcies?  The old adage of what seems too good to be true, probably is.  Yet, so many people forgo the legitimate and obtainable funding offers to grow their business, while wasting their time searching out false and unfounded loan options that simply don’t exist.  Hundreds, perhaps thousands, of consumer reports indicate fake, fraud, or misleading instances of online loan offers, which not only waste time for consumers but result in negative outcomes.  Every day, seemingly smart business owners get locked into small business loans that they don’t understand and may very well put their business in jeopardy, all because they heard what they wanted to hear and refused to listen to reason.  

The greatest “search cost” for small businesses is time.  By forgoing reasonable and credible loan terms and rates in search for a better offer, business owners have been led to believe that shopping is the best way to find that better offer, which typically winds up lowering their credit score and often puts them in a negative cash flow cycle.  This pattern can ultimately cause a negative impact in their operation and spiral out of control if not careful.  That’s right, often times the search for that “better rate” puts them in a worse position they were in to start with. Instead of wasting valuable time to find unobtainable and unreasonable loan terms and interest rates, small business owners are better off researching a trustworthy and competent alternative financing providers who have the knowledge, experience and wherewithal to advise you properly.

Many of the propositions discussed here have been supported through recent research by Miguel Villas-Boas and others, who suggest that too much information may hurt consumer decision making.  Through a series of established economic models and numerical analyses, the researchers find that an intermediate amount of information is better than too much, or unlimited information.

Whether you like it or not, the tide of the Information Era is looming larger by the day, and it is up to your prudence to navigate through these waters in finding the best small business financing options for your particular business.   Especially for an important decision as getting a small business loan, revenue based loan, term loan or merchant cash advance to fuel your growth initiatives or simply meet payroll; you should avoid listening to the song of Sirens and steer toward a reliable and knowledgeable loan provider and resource.