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Starting a local business is like graduating college. It may feel like a big milestone (and it is!) but it’s also the bottom of a new ladder. At the top of that ladder are enterprise companies. If your new business hopes to one day reach that level, it needs more than just community support.
Satisfied locals might tell their friends about how much they love your business, but word-of-mouth only goes so far. New Yorkers simply aren’t going to hop on a flight to shop at a small business they heard about in Arizona.
So how can you make your local company a national player? It takes a little bit of luck, but it also takes strategy and thrift. The following steps are key:
Select national suppliers
Your local business needs the best products and tools possible to do nationally competitive work. Unless you’re planning to place a massive order, beware that national suppliers may not be willing to do business.
As a local company, your procurement strategy should focus on leverage. Band together with other local companies before submitting your order. If you can’t cobble together enough demand yourself, consider joining a group purchasing organization. GPOs combine the buying power of thousands of companies to negotiate pricing and provide smaller businesses with access to discounts they couldn’t secure otherwise.
Do more with data
Construction equipment rental is hardly new. So how did Missouri-based startup EquipmentShare become known as the “Airbnb of construction rentals”? The answer is its telematics system, EquipmentShare Track, which gathers data about its equipment remotely. EquipmentShare Track tells operators if their equipment is about to break down, minimizing maintenance costs and maximizing up-time.
Consider how you can turn a data stream of your own into a service. If you’re a lawn care company, could you track soil moisture levels to tell customers when to water their lawns?
Low-tech solutions can work, too. If you’re running a bed and breakfast, you might be able to drum up wider interest by surveying guests from afar about the attractions they came to the area to see. Post it on your website, and voila: more out-of-state visitors.
Limit labor costs
If you’re like most of the companies surveyed by payroll firm Paycor, almost 70 percent of your business expenses are labor costs. You can’t shortchange your workers (at least if you want the best possible performance from them), but you need those funds for business development.
Lean on independent contractors when possible, especially for short-term projects. Contract workers are 30 percent cheaper, on average, than traditional employees. By opting for contractors, you avoid paying payroll taxes, unemployment insurance, workers’ compensation, pensions, sick days, health insurance or vacation time. As an entrepreneur with a new business, many of these costs and fees that come with hiring full-time employees simply don’t make sense at the start.
Just make sure you don’t misclassify employees, as the penalties are steep, and enforcement is up.
Add artistic flair
Why do shoppers buy from sites like Etsy when they could get a better price on a similar product on, say, Amazon? Because shoppers prefer unique, personalized products. And since personalized and handmade goods can’t be easily built by a major manufacturer, these craftspeople tend to be safe from copycats.
Had Madd Child Clothing stuck to plain jeans and T-shirts, for instance, it would probably be out of business by now. Instead, it differentiated itself by selling custom zip tees and hand-studded mom jeans. Madd Child Clothing might not be a household name, but the boutique clothing brand has found a niche with national appeal.
Ask yourself, how can you establish a niche with widespread appeal with your own product?
Opt for digital marketing
Traditional marketing tactics are expensive. Instead of blowing your budget on a traditional ad buy, focus on online channels. Building a social media presence may not be easy, but with internet access and a bit of effort, you can reach a broad audience. Blogging, which can also help your company’s website appear higher in search rankings, is another smart place to start.
Which digital channel delivers the greatest ROI? Two-thirds of business leaders believe it’s email marketing.
Not only do newsletters cost little or nothing to develop and send, but they’re endlessly scalable. And because email is a primary business communication channel, newsletters are often read by customers who are ready to buy.
Take advantage of your agile nature
Many people view national brands as having a big advantage. They have the resources and the visibility to spot trends as they’re happening. With a constant finger on the public’s pulse, they anticipate customers’ needs before customers themselves often do.
But startups have a secret weapon, too: their ability to innovate.
There’s no reason local businesses can’t capitalize on the data and trends spotlighted by bigger outfits. Look at ways to make your own offerings more appealing.
Are customers constantly frustrated by the amount of packaging used by brands in your space? Do customers ask lots of questions about how to use the product?
Running lean, you have more leeway to experiment with packaging or launch tutorials on social media, changing the dynamic more efficiently and in a more direct manner than your larger competitors could.
The national stage only has so much space. If you want your local business to have a spot on the stage, you need to compete like a larger brand. Cut your costs, differentiate your product and maximize your marketing. You’ve made it this far; don’t stop climbing now.