Ask Tom Gray about the three biggest issues most small businesses face and chances are you'll get this list: Differentiation other than price. Getting new customers. Managing cash flow.
Pretty spot on, especially when you consider that finding, or developing, a business' differentiation often is an integral part of attracting new customers. Cash flow is a different, though related, problem.
The solutions to the problems Gray identifies are what matter, however.
Gray, once a telecom exec but now an adjunct business professor at several suburban colleges; certified SCORE mentor; management consultant; turnaround specialist and business book author, seems pretty close on his possible solutions. How close is for you to decide.
Gray, president of Thomas H. Gray Inc., Lisle, certainly gets a vote from Ann Garvey. “I have the right things in place,” says Garvey, president of Celebrity Dance Studio Inc., Downers Grove.
“Dance is a unique business. It's a luxurious hobby,” Garvey explains. “I've done it my entire life. But what Tom did for me was the business side. I was missing the business side, the big picture.”
Thanks in part to a “30-40 page business plan” that Garvey says “was a very good learning experience,” Celebrity Dance posted its best year in 2012.
Garvey is typical of many of Gray's clients — and many other entrepreneurs: Very good at what they do — dance in Garvey's case — but needing support in business management.
Most often, finding a differentiation other than price is key, Gray says. “Too often business owners say, 'I'm local. People should shop here.' But people aren't limited by geography. Customers want some place that is the right mix of value and price. They compare features and functions, then price.”
Convincing business owners there's more to success than low price can be difficult. Unearthing a business' differences and transferring those differentiations into a benefit statement that drives the business is “difficult to think through,” Gray says.
Yet Gray maintains that the key is to “work through a competitive analysis. You want to get into the customers' mindset. Then you can come with the tactics.”
That's when “business owners get more excited,” Gray says. “'I know that other guy has credibility,' a business owner will say, 'but I do the same thing.'” Differences and tactics then matter.
Ultimately, a small business' success depends on cash flow.
Although many accountants will undertake a cash flow analysis, Gray says “The (businesses) I deal with don't get a lot of advice from their accountants.” Besides, he adds, “A lot of analysis looks back. Cash flow analysis looks forward.”
Gray says that owners whose businesses have a bit of history “have a feel” for cash needs. “They know how much they'll need to put aside to cover a summer slump or that they typically have fewer customers in April than March,” for example.
Ÿ Jim Kendall welcomes comments at Kendall@121MarketingResources.com
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