Another sales secret is that it is possible for your business to be too small or too big. Your goal should be to have it just the right size to meet your sales objectives and to be able to scale up or down as necessary.
I once bought a retail fishing store (long and funny story) only to learn by experience that it fell into the too small – too big scale. Because of the size of the facility, I needed employees but because it just wasn’t big enough in physical size, I wasn’t generating enough revenue and the employees could not be as sales efficient if the store were bigger and could stock more and larger products.
My choices were very limited. I had a lease I could not get out of and I could not physically expand. I could have cut the space in half and run it myself but that would have meant cutting inventory to fit in the physical space and customers would likely go elsewhere. And, I wasn’t interested in running it myself.
So, I closed it up and took my lumps. But, the lumps were smaller than if I had tried to continue down the same path. And, I learned some great lessons about retail that I now pass on to clients and friends.
I’ll share the most important retail lesson I learned. Don’t sell products that can be bought more cheaply at big box stores or online from Amazon.
Take the fishing store for example. You could buy anything we sold from Bass Pro Shops, Cabelas, or even the local Wal-Mart for 15% – 30% less. We tried to compete with this by offering more value in the way of service and education. We had frequent free seminars on certain aspects of fishing like using downriggers for salmon on the Great Lakes. We figured we’d sell a lot of downriggers. But, what actually happened is the customer attended the free seminar and then went to one of the big stores we he could look at all types of downriggers and use the knowledge we gave him to pick from mass of options – options we could not stock or show.
So today’s small business small secrets are:
You can be too big or too small of a company. If that is happening don’t hesitate to scale up or down or else you’ll fail.
Don’t sell anything that is viewed as a commodity and can be bought for a lot less online or at a big box store.