The Reason SMB’s Aren’t Reaching Their Full Potential
Many small to medium businesses often fail to reach their full potential.
Why?
Because they don’t apply the market imbalances which can set them apart from their competition.
Of course, there are other reasons why businesses fail, such as expanding too fast, a weak business plan or poor cash flow — The list goes on.
However, these four market imbalances can also have a huge impact on the failure and success of small to medium businesses.
So whether you’re a freelancer, a startup or a business with several years under your belt, these are the four market imbalances that you need to know about…
Innovation
When you imagine ‘innovation’ what comes to mind?
An original idea? Something that has never been seen before? The impossible?
Innovation doesn’t have to be humongous, in fact, it can be the total opposite; subtle.
You may be scratching your head thinking…
“So I don’t need to invent flying cars?”
No, no you don’t!
It can be as simple as an additional feature to an existing product or service that people know and love.
Maybe it’s a product or service brought to a market where it doesn’t traditionally belong.
Or it might even be the way you deliver an existing product or service in a entirely new way — Think Netflix or Kindle.
The options are endless!
Innovation is possibly one of the four market imbalances that has huge potential to help your business succeed.
You are essentially carving out your own market and attracting a new audience where there is little to no competition.
Nothing is entirely original and you don’t need to create the next groundbreaking invention that will take the world by storm.
Innovation can even be the answer to a local problem and that may be enough for your business to succeed and outshine any competition.
On that note, remember…
- Creating the ‘next big thing’ isn’t the case.
- It’s about identifying the answer to a problem regardless of scale.
- The subtlest ideas can make for the biggest innovations.
Innovate, innovate and innovate some more until you create your own audience, your own market and your own success as a small to medium business!
Relationships
Are you always visiting the same café?
Do you always buy your shopping from the same supermarket?
Have you always bought the latest smartphone from the same brand?
If so, it’s usually because the brands and businesses you buy from invest in relationships with their customers.
They go that extra mile to ensure you become a repeat customer and one that feels highly valued.
When this is achieved, you no longer shop around and the thought of doing so doesn’t pass your mind.
Think about a product, service, brand or experience that you use consistently…
Did you consider alternatives the last time you purchased?
Many small to medium businesses often focus on their own product or service and do not celebrate the existing customers that have invested in their mission.
If you want to beat your competition, building quality relationships with customers could be the market imbalance to take you there.
Create an experience that turns heads and turns heads away from your competition and towards your products and services.
In many cases repeat customers are better than new customers, yet small to medium businesses often fail to retain relationships after the purchase stage.
This isn’t just a downfall, but it could be dangerous for businesses that rely on repeat customers.
While establishing relationships with customers may be resource-intensive and sometimes expensive, the long-term results could be incredible.
Celebrate your customers! Let them know that you’re their biggest fan, because after all, they are yours.
Convenience
It’s no secret…
We’re living in an age where patience is forgotten; where people want something and they want it now.
It may not be ideal for your business, but can you accommodate this demand?
Can you turn the seven day process your competitors offer into a star-spangled 24 Hours?
Okay, the example above may be slightly optimistic, but the principle still applies.
More and more startups and successful business are becoming a certain kind of convenient.
They are turning the ‘long-winded’ into the ‘straightforward’, and the ‘complicated’ into the ‘easy and simple’.
Many great examples of convenience has been the result of traditional methods and strategies becoming digital solutions and results.
We have seen new systems, new technologies and new approaches to convenience which has influenced success for small to medium businesses.
One of the most recognisable examples of convenience is Amazon.
Also know as the ‘A to Z of everything’ Amazon have created an e-commerce platform for just about anything and everything.
Whether you’re looking for a new toothbrush or a camera drone, Amazon can deliver you a range of results in minutes.
This eliminates immense effort, time and energy researching and physically visiting different stores.
Many argue that purchasing from physical stores is much more satisfying or productive, but you can’t argue that Amazon has seen exceptional success due to their convenience.
Does your small to medium business compete on convenience?
Are you creating a product or service that allows for a hassle-free, quality customer experience above other competitors?
Competing on convenience is a big game and when achieved, the results can be astounding.
Price
Price is perhaps the most saturated market imbalance which small to medium businesses choose to compete.
Selling a product or service at a smaller price than other competitors and still making a profit means your business competes on price.
But it isn’t always the easiest market imbalance…
Some believe price can threaten margins, quality and other factors of your business and competing on pricing doesn’t always pay off.
But it isn’t always black and white!
Cutting costs and keeping healthy margins is still possible when choosing this market imbalance for your business.
Investing can seem like a daunting idea for small to medium businesses, but owning assets that reduce costs is one way to compete on price.
Think machinery, premises etc.
The list goes on depending on the nature of your business, but the principle of can apply to many businesses.
Investing in assets that are causing costs where you’re trying to compete on price can reduce costs and help bring you closer to beating competition in this market imbalance.
Another noteworthy approach to winning at price is the technology available to small to medium businesses at considerably low costs.
The potential to systemise and automate certain procedures involved in your business as appose to using people can be a huge way to keep costs low and margins healthy.
Think supermarkets and the self-checkout systems and technologies they have implemented to reduce the need for employees.
This is one of the more obvious examples of how businesses can compete on price by systemising their business, but the scale of this is vast in the e-commerce space.
If you can compete on price and tactfully keep costs low and margins healthy, you may be able to win customers over from your competition with this market imbalance.
Some Market Imbalances Just Don’t Mix
So there you have it!
- Innovation
- Relationships
- Convenience
- Price
These are the four market imbalances that your business can use to start outshining competition.
If you’ve been reading this thinking,
“Yeah, but I want to build a business on quality relationships but also beat competitors on price!”
Then let me explain…
Believe it or not, some of these market imbalances just don’t mix.
Your business should choose just one of the market imbalances to focus your efforts on.
You can’t be tremendously innovative but extremely cheap and compete with competitors on price.
“Why not?”
Because it takes time and resource to really create something innovative and ‘new’ that the market hasn’t seen before.
You can’t build exceptional relationships with customers and again, compete on price.
Building quality relationships with customers doesn’t just happen over night and it can be an expensive game to play.
What market imbalance does your business implement?
Does your business make sure of more than one market imbalance and still manage to beat competition?
What market imbalance will your business move forward with?
This post was inspired by Daniel Priestley’s Oversubscribed book; a chapter I thought was very important for small to medium businesses to hear about.
The book is a recommended read for businesses who are looking to stand out from their competition and have customers chasing their products and services left, right and centre.
On that note, thank you for reading!
