Strategy | Small Biz Viewpoints

Too Much, Too Fast – Lessons from JC Penney Failure for Small Business

April 13, 2013 1 Comment

By now, most in the business community have heard about the ouster of Ron Johnson as CEO of JC Penney after only 17 months on the job. This was a stunning reversal of fortune for Ron Johnson who was regarded as retail Guru based on his accomplishments in transforming Target to “Cheap Chick” retailer and hugely successful launch of Apple Stores. When he was hired at JC Penney he was viewed as a savior who would rescue JC Penney from the downfall it was experiencing for several years.

However, things have not turned out to be that way. In 17 months JC Penney has been in complete turmoil. Sales in 2012 declined 25% compared to prior year representing a staggering $4.3 Billion in lost sales. In 2012 it recorded loss of $1 Billion. No other company has seen such a precipitous loss of value in this short time. So, what went wrong and what lessons can small business owner learn from this?
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Filed Under: Management, Strategy Tagged With: Business-Model, Coupon

Blockbuster Failure!! How Can You Avoid Similar Fate

March 3, 2013 8 Comments

Blockbuster, the ubiquitous video rental chain of the bygone era, announced recently that they will close 300 stores in U.S. and lay off 3,000 employees. This is after they have already closed hundreds of stores over the years. The latest round of closing will leave them with only 500 stores, down from 9,100 at the peak of their business. This is one of the blockbuster failures in the American business history! To be fair, they are not alone. Recent times have seen number of successful retail businesses wipe out from the landscape – Borders, Circuit City, the list goes on.

Blockbuster was one of the great success stories in how to build an empire by putting number of small rivals out of business throughout the country. Starting with a humble beginning they went on to consolidate the video rental industry to be the eight hundred pound gorilla. And yet, they were not immune to the law of natural business cycle when new competitors came along. There are important lessons to be learned from Blockbuster to ensure your small business does not meet the same fate.
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Filed Under: Management, Strategy Tagged With: Business-Model, Customer-Complaint

The 10 Best and Worst States for Small Business

December 8, 2012 4 Comments

Thinking of starting a small business? Our infographic breaks down the best and worst states for business by real change in GDP, top level state income tax, and number of INC 5000 businesses. Whether you’re starting a web firm or a traditional brick and mortar business, this infographic provides highly-useful information with regard to the incorporation decision process. Local economic climates and state taxes can be a heavy burden on web startups and other small businesses. Making the right decision can save you thousands of dollars in the end; it did for us.

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Filed Under: Management, Strategy Tagged With: Business-Start, Economy

How to Manage Franchise Relationship to your Benefit

August 25, 2012 5 Comments

Franchisee and franchisor have long held love-hate relationship. They know that they both need each other to be successful, but at the same time, they are constantly disagreeing and fighting over number of issues. While healthy debate and disagreements are beneficial, constant fighting over trivial issues can sap energy out of both franchisee and the franchisor.
For this reason many franchisees feel they should just venture on their own rather than dealing with the tyranny of franchisor. This could be a mistake, however. There are number of benefits of owning a franchise as opposed to running an independent business. As a franchisee, you need to develop a symbiotic relationship with the franchisor and focus on what you want to get out of it. The key is to understand and follow the rules of the game and develop a playbook that will make you a winner. Follow these guidelines when developing the playbook.
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Filed Under: Buyers, Management, Strategy Tagged With: Best-Practices, Franchise, Operating-Model

Why a solid Network is a Key to Small Business Success

July 22, 2012 2 Comments

Building and running a successful small business is a team sport. You, as an owner, will probably play the role of a coach or a quarterback; but you are going to need more players with variety of skills to build a winning team. If someone tells you he single handedly built the successful small business, he is lying.
While it is true that you are the Chief Everything Officer (CEO) of the business responsible for taking care of all aspects it doesn’t mean that you have to do all the work yourself or that you are even capable of knowing it all. The key to success is to build a solid network of people with diverse skills who complement the skills you possess. This network acts an advisory board that you can go to for advice, concerns or to simply bounce off any ideas you might have before implementing them. This board needs to be chosen carefully so that you can get the right advice even if you may not like it or agree with it. So what types of skills should you look for when building an advisory board or a network of supporters?
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Filed Under: Customers, Management, Strategy Tagged With: Best-Practices, Business-Start, Customer-Service, Operating-Model

Do not Take these 5 Actions when New Competitor Moves to your Neighborhood

June 16, 2012 1 Comment

The scenario may look familiar to many small business owners. You are doing a brisk business with loyal customer base. The sales are growing steadily. You are making decent profit. The same holds true for other competitors in the neighborhood. The existing customers in the town are divided between your and other businesses. In short, equilibrium has been established amongst existing businesses.
And then, a new competitor decides to get a piece of the action. Suddenly, everything changes. The new competitor tries to grab customers with lower price and increased marketing. The existing ones try to hold onto their customers. Employees will leave for bigger opportunities. It’s as if someone threw a stone in the calm waters causing ripples everywhere in the neighborhood.
The initial reaction for many existing business owners may be to counter the new competitor with force right away to ensure these ripples do not cause significant damage to your boat. However, this may be a mistake. The best strategy may be to watch and plan for the future before taking radical steps. In particular, it is important NOT to do the following right away.
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Filed Under: Customers, Marketing, Strategy Tagged With: Advertising, Best-Practices, Competition, Customer-Service, Pricing

Is your Business Prepared to Sell to these 5 Customer Types?

June 12, 2012 1 Comment

Many small business owners fail to understand the customer base they serve and end up not being prepared to sell to those customers. How many times have you thought about various types of customers that you are selling to? Is your business ready to serve those different types of customers? Do you have marketing programs in place to attract those customers in the first place? Important questions to think about, isn’t it?
Different customers have varying types of needs. Some are looking for bargains, while others will pay premium for the quality product. By understanding the needs of customers your business can determine which customers are right for your business. You can take this approach one step further and develop customer personas based on the customer needs and purchasing habits. Personas are helpful in not only identifying the customer types, but also tailoring your marketing and operations to serve their needs. Below we have identified 5 such customer personas. Think about which ones are usually doing business with you and whether your business is prepared to serve their needs.
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Filed Under: Customers, Management, Strategy Tagged With: Best-Practices, Customer-Service, Operating-Model, Pricing

What can Subway Teach you about Growing the Business

June 9, 2012

Trivia question: Name the franchise with most number of locations in the world. If you answered McDonald’s you are wrong. The new king of the franchise world is Subway. It surpassed McDonald’s in 2011 with 33,949 worldwide locations compared to Mickey D’s 32,737. The franchise that started with mere $1,000 by Fred DeLuca in 1965 has seen phenomenal growth in the last 10 years.
Subway has been able to grow consistently year after year by following principles that can be applied to any small business. We have studied and analyzed those principles and present them below for small business owners to apply to grow their business in a similar fashion.
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Filed Under: Management, Marketing, Sales, Strategy Tagged With: Advertising, Best-Practices, Business-Model, Subway

What can Small Business Owners learn from Greek Crisis

June 6, 2012 1 Comment

Unless you have been hiding in a cave for the last couple of years you know Greece is on the verge of economic collapse on the scale not seen before. The unemployment rate is a staggering 22% and they are expected to default on their loans unless they receive yet another round of financial help from their neighbors and EU partners.
While it may be tempting to think of Greek situation as unique, it is not far-fetched to think of an analogous scenario for small businesses. After all, as we show below the reasons behind Greek crisis are prevalent in many of the businesses – both large and small. That’s why Greek crisis holds important lessons for business owners in how not to get into the financial disaster. Below is our attempt to explore reasons behind Greece’s failure and how they apply to small business owners.
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Filed Under: Finance, Management, Strategy Tagged With: Cash-Flow, Cost-Management, Metrics, Partnership