How can small businesses compete

G

GHoward

2,500+ Posts
So, I try to support local and small businesses, though admittedly this mostly happens in the food department. However, two recent shopping trips have made me a little sour.

1) I needed to copy a key. I happen to live within walking distance to a Cothrans Safe and Lock. I go about 11am on a saturday AND THEY ARE CLOSED! What kind of business is closed midday saturday? I ended up going to home depot. (In this case I'm sure a $1.50 key copy would not have hurt too much, but the principle is still there)

2) I was looking for a Tomato plant. I narrowed my choices to Shoal Creek Nursery and Breed and Co. This was about 7:30 on a wednesday. Both places: CLOSED. To me, 7 to 9 is prime shopping time, especially now, since it is doesn't start to cool off until then. It is also light outside. If this were January, and it is dark at 6pm, I could understand. I ended up going to Lowes. They didn't have any tomato plants, but at least they had the chance of earning my business, and next time I need something at 7:30 I won't even waste my time seeing if Breed is open.
 
It's a catch-22. The small businesses bring in less revenue and therefore have to monitor expenses much more closely. The extra cost of say 2 hours worth of utilities plus employee salaries isn't going to be made up for by a guy buying a couple of tomato plants. So, they have to close earlier/open later to make ends meet, which in turn will miff some potential customers who then take their business elsewhere, which further cuts into their revenue, and the cycle repeats.
 
Because these businesses treat their employees fairly, and don't make them work 60 hour workweeks for $6.50 per hour, and can't afford a second shift-try to understand and patronize local businesses, because they create better jobs than the big chains where you are shopping.
Try to get a skilled auto technician to work on Saturdays-it won't be happening.
 
I've started trying to buy more locally and avoiding the big franchises. Hours of operation are annoying, but it's worth it to me to bear with some inconvenience to help the local businesses.
 
39 hour weeks cost less and are therefore more common, in my understanding. Still ******, just in a different way.
 
In the case of Cothron's, a vast portion of their revenue comes from locksmithing. I would imagine that the retail operations are mostly a wash with the exception of the fact that they keep their name out in front of people's faces, allow them to have trucks parked overnight in multiple locations (reduces gas when you don't have to drive clear across town) etc...
 
This is nothing new. It's one of the reasons chain stores came to dominate.

But I think small businesses would be smart to have at least one day a week they are open late so people who want to give them their business can.
 
It is tough to compete when you can't advertise widely, can't stay open the same number of hours, can't buy in quantity like a big chain, and don't have slave labor in Chile or China producing your products. Any don't offer come-ons, cheap prices which are bait and swithc tactics, install parts so cheap they are assured of not lasting through the warranty period, but charging for some related part the next time the customer comes in with the broken cheap part.
Yes, it is tough to compete against all that.
But in some areas, it is just hard to avoid being monopolied out of the market by cheap priced mass marketers.
 
Do you actually think that small businesses, on average, pay better wages and benefits than large chains for comparable employees?

In answer to the original question, small businesses don't compete with large chains. If they try, they get crushed. At least in retailing, they become speciality retailers offering goods or services at a higher quality but also a higher price. Good luck on trying to compete with Wal-Mart on the price of widgets.
 
No one said that life was fair for the small business. If you can't find your niche, then find another line of business.

and if you are going to do something that makes you stand out, then have to be known for that. Midnight Bike Store open til 12 or whatever.
 
Ok, so I understand that small businesses can't stay open as long as chain can. However, normal business hours are 8-5. Majority of people are working then, and can't go out shopping, so why are small stores open during that time. I understand stay-at-home moms do most of their "work" during this time, but I think if we were to survey a large part of people, they would say that most of their shopping is done between 5 and 8pm (not counting weekends). It seems to me, if I were to open a small store, I would put my hours at 11am to 9pm. That's 10 hours, same as 8-6.
 
It is a shame that we can't support the small business more than we do. It is also slowly happening here in England, although there is still a strong presence of independent shops due to the way our cities and towns are laid out.

One thing I hated about living in the States is that every city can basically seem like the next one down the road with the usual strip malls that have the following stores:

Boarders, Best Buy, Circuit City, Barnes & Noble, etc etc.

Those along with the usual Wal Mart, Target, etc, makes every place look very similar to the other. Basically over time, no character.

The beauty of having small independent shops is you get diversity of goods, but it just means that you have to go to more than 1 shop to get everything you need. In todays world, we want cheap, convenient, no hassle shopping.

Lastly, these massive chains brand themselves often to be 'American' but ultimately for the most part, they are low wage, minimum rights for workers, and a lot of the goods are made in some 3rd world country with terrible working conditions (talking about Wal Mart/Target mostly) but hey, at least we get our **** cheap, right?!
 
Most people in America like the homogeneous feel of every suburb and city. How many people would prefer to go to Pappasitos over and over when there are local Mexican restaurants that serve better food and don't have a 1 hr wait? But that requires taking a chance.
 
I am afraid that BA is right about the homogenous feel many are looking for. Also, it is very difficult to find quality merchandise. I would think one would have to find a very particular niche and have a good size polulation of people that understand quality, have the means as well as willingness to pay for it. I see people from all walks of life buyuing the cheap crap at Wal-Mart. A retailer looking to start a retail establishment likely will have to choose from the the same low quality material,/products, but at a a substantially higher price than the big boxes. The retailer is forced to sell "service," but there aren't enough people truly willing to pay extra for the service. Many give lip service to it, but don;t put iot in action.

We helped my in-laws in a hardware store. They bought through a co-op to get better pricing on goods. Someone was always available to either bring an item to you or take you to it. They had employees with actual contracting experience. When Lowes moved into the community, they saw the writing on the wall and sold out. The next owner closed within a couple of years.
 
you've also got to remember about small companies is its the schedule. Say you have 5 employees. As stated above, the least busy time of day in retail is between 1-3. Now if you want to be open from 7-7, not only would you open more hours and paying for elec, ect, but you would essentially be fully staved during your least busy time.

In my experience, small companies pay more, but have fewer health insurance plans. On the other hand, they are usually alot more flexible whith you schedule as well as other things (taking 3 weeks off at a time for instance is relatively easy when the owner of the company is 20 feet away, v. the red tape of corporate world)
 
Build a great back office that adds value rather than cost. Be hyper proactive in communicating your identity and managing your presence in whatever market you are in. be objective in your marketing, not self promotional; tell clients and investors what it is you do with great confidence and no BS. I work for an uberaggressive start-up and I'd say that these things more than any other give us an edge.
 
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