In this difficult economy, a lot of displaced workers are starting their own businesses. They figure they might have a better chance of controlling their own future by running their own enterprises. In addition, those who are already in business are looking for ways to improve their sales and remain competitive. Both have the challenge of building institutions that last.
As a business owner myself, I can understand the challenges they face. I started Sistemas Corporation during the early 80’s in the middle of a recession. Throughout the years, I have been able to identify what makes Sistemas and other entities survive and thrive in challenging times. The secret is to build each business on a strong foundation: one built on value, collaboration and integrity.
First, value is always defined from the client’s perspective. What is it that makes your client choose your business over your competitors? The best way to find the answer to that question is by asking your client how they are benefiting from your products or services. Remember that people buy expectation of benefits. It does not matter that you have a better mousetrap; all that matters is that its usage will benefit the client many times over what they pay for it. If your client tells you that the main reason they buy from you is because your price is so low, reconsider your value strategy. Being the least expensive is a losing proposition unless you have the volume to make a good profit and limit the entry to other competitors who might charge less.
One piece of advice about pricing: Price is directly proportional to the amount of pain your service removes, the amount of pleasure your product provides or a combination of the two. The more pain you remove, the higher the price you can charge. Have you seen how much money people will pay for a pair of tickets to a sold-out Super Bowl? The only explanation for higher prices on these tickets is that they make the buyer extremely happy.
Second, collaboration is the key to growth. While value keeps the clients happy, collaboration is the best and most affordable way to bring more clients to your business. By developing alliances with other vendors you are able to cross-promote everyone’s value proposition. I call it collective marketing (individuals acting together), an inexpensive way to promote your businesses and benefit everyone involved. For example, an accountant can collaborate with lawyers and financial planners to devise a way in which each one can refer and cross sell to each other’s customers. There is no better recommendation or referral than one coming from a trusted expert, advisor or vendor.
How do you add people to your collaborators list? When meeting them, ask how you can be of service. By earnestly seeking to help others, you will see that others will respond in kind. Remember that by creating alliances where everyone wins, you have an army of people promoting your products or services.
Finally, integrity is the strongest pillar in our foundation. People define integrity as consistency, honesty and character. I define it as walking the talk. Say what you do and do what you say – it is as simple as that. Work on delivering your products on time and within budget; always under promise and over deliver. Even simple things like being on time, small gestures of politeness and courtesy go a long way.
The world is hungry for people who keep their word, live their values and can be trusted. Those businesses that truly care and go the extra mile develop long lasting relationships with their clients. The only way a business can last is by having loyal customers who keep coming back for more.
If your value proposition is higher than your competitor, you have an army of allies who promote your product or service and you execute flawlessly with utmost integrity, then you have built the foundation for an enduring business.
Previously published in Charlotte Viewpoint on July 8, 2009