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Why do some small businesses succeed wildly while


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By Ron Burgess - Why do some small businesses succeed wildly while others languish or die?

Superior management
Intelligent owners
Good customer service
Strong marketing
Hire the best people
Good understanding of business

A presentation by Ron Burgess @ronburgess to AMA-IE

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Why do some small businesses succeed wildly while

  1. 1. How marketers get it wrong. . . and right
  2. 2. •Superior management •Intelligent owners •Good customer service •Strong marketing •Hire the best people•Good understanding of business
  3. 3.  Tom Peters – Lessons from America’s best companies “In Search For Excellence” Jim Collins – Says to get the best people on the bus in “Good To Great.” Napoleon Hill tells us to “Think and Grow Rich” Regis McKenna – “Relationship Marketing” John Maxwell – “Developing the Leader. .”
  4. 4.  Few of the “Excellent” companies remained for Peter’s follow up book Small business owners can’t afford the best people, and they still do well I know some successful businesses where the owners really don’t think much Many successful business owners are poor leaders
  5. 5. And… highly successful smallbusinesses seem to defy the experts.
  6. 6.  Small business is not big business only small • Motivation for small owners is completely different from large business You only have to be smart/good enough You must Own your crack in the market Luck
  7. 7.  Why do small businesses create wealth for a few (generally) low profile businesses?
  8. 8. •Education•Intelligence•Exceptional Management•Financing•Perceived Value (Inc. Brand) •Quality •Image •Service •Price Competency /Competition•Industry Niche•Market, Market Type•Market Leadership•Innovation•Positioning •Emplacement
  9. 9.  Largest group are small businessmen Professionals who set up a business Small percentage are corporate managers Very small percentage are super rich (actors, athletes etc.) 10/19/2012 13
  10. 10.  Independent Mostly have college degrees, but not particularly good students (C+ to B-) Most were very social in school, took advantage of group opportunities Married, wife (spouse) works in business or stays home, and always supportive Always spend less than they earn, investing the rest Not status conscious Live in homes way below their means Make kids work for what they want Have a knack for seeing “voids in the market” that they can fill using their skills or learn to fill. 10/19/2012 14
  11. 11. Know how tofind and servecustomers. . .Innovate todifferentiate,creating value 10/19/2012 15
  12. 12. PIMS - Profit Impact on Marketing SystemsBe in the top 2 or 3 in your marketBe seen as high value (quality/service) 10/19/2012 16
  13. 13. Profit impact of competitive strength Marketleadership pays: be number one or number two in your served market Competing on quality is better than competing on price 10/19/2012 17
  14. 14. 403530 25 20 15 10 5 Superior Qual. 0 Mid Quailty High M. Share Medium M. Share Inferior Qual. Low M. Share 18
  15. 15.  Seek to be in top 3 market share in your crack in the market. Strive to be perceived as high quality and service. (Perception is reality in marketing) Buyers make decisions based on perceived value. 10/19/2012 19
  16. 16.  Re-define the market Narrow the focus Look for a smaller crack where you can be first Marketing Positioning Marketing Emplacement
  17. 17. General IndustryGeographicSpecializationSpecification and StickinessDistribution ControlReferral and SymbioticRelationshipAuthenticity
  18. 18. •General Industry •Geographic •Specialization •Distribution Control •Specification and Stickiness • RelationshipA micro-niche- Crack In The Market
  19. 19. Components of Value1. Quality2. Service3. Price4. Image/aesthetics 10/19/2012 23
  20. 20. Quality 100 80 60 40 20Service 0 Low Price Image YOU Competitor 1 Competitor 2 10/19/2012 24
  21. 21. Owner (education,Value Highly motivation, Niched business Exceptional degree) Management Wealth Creating Own Their Sm. Businesses Crack In The Market Market Innovation Leadership
  22. 22. Heavy selling, promotion No marketing / welland marketing emplaced
  23. 23. MarketingEmplacement
  24. 24. What Marketers Do Wrong With Small Businesses• Don’t understand why small business succeeds• Can’t communicate the importance of the Crack to owners.• We like the activity of campaign battle• We don’t like strategy
  25. 25. What Marketers Do Right With Small Businesses• Think Niche, Learn Crack• Learn why and how small businessessucceed, beyond the hype• Understand as much as you Do- Planfirst execute second• Recognize that “skills” don’t equalwisdom
  26. 26. Business Wealth Building Market LeadershipSelection of Niche Creating Better PIMS Market Value Owner - Financially Company CompetenciesConservative and Values
  27. 27.  What are your strategies to move to the well? Questions
  28. 28.