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Friday, January 20, 2017

Mistake, Mistake, Mistake



Here is an example of a classic small business mistake I saw coming down the track.

 

A young girl, following her dream, ran right into a stone wall. It is not that she was young or a girl that mattered here. It simply was that her dream clouded her view of reality.

 

It is not clear to me if she had prior experience in her chosen field. If she did it would have reflected itself in the quality she provided, which I did not see, and I am not sure anyone had the opportunity to experience in her new business.

 

She appeared to begin her business with an investment in a one year lease and additional expenses improving the leased property. After a month of work on the property, about two weeks prior to opening the business a sign appeared in the window announcing the date of opening of her YOGA studio and classes.

 

At no time that the business operated did she have more than four people show up, and that happened only one time. After about three months the business was shuttered, and the landlord was seeking another tenant.

 

So what did I see that she missed? First, there were four competing operations within walking distance. Second, she could not provide free parking for her clients. Third, her competitors were on main streets, her business was not, Fourth there appeared to be no competitive advantage offered.

 

The key learning from this example is to study, study, study. Study the competitive situation. Study the location. Keep on top of your situation.

 

 

Steve Koenig, SCORE Counselor


 

 

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