I have 2 new questions for you this week – if you’re a business-minded person, I’d love to hear your take on these questions which I also do as a FB live video every Wednesday at approx. 1 PM here: www.facebook.com/mountainharvestmedia
- How much power to my suppliers have?
This piggybacks off of the last question 2 weeks ago, which was “how much power do my customers have?”. Rather than the concern of losing business, though, this component has the possibility of stealing your money in unfair price-gouging which will cause you to have to increase your retail price, which may drive away clientele. They both have negative implications if you’re not careful. Last time we decided that, in order to maintain control over your business and not allow clients to dictate what you do, you need to either expand your customer base or always appear confident and not desperate when dealing with clients.
When we’re talking about making sure your suppliers don’t control you, though, it comes down to – do you have a back-up supplier. If you have another supplier that can offer what you need cheaper, faster, or better than your current supplier, anytime your current supplier tries to price-gouge you unfairly, you can just say “Well, that’s too much to pay, so I think I might switch over to using ABC company as my main supplier.” You name the company. Name it. If you just say “I guess I’ll have to use another company.”, your current supplier may call your bluff. So – do some digging…who is your supplier’s main competition? Whenever you engage in phone calls or meetings with your current supplier make sure you have that other businesses’ name in the front of your brain so that you can pull out that company name, if needed. It’s likely your current supplier will recognize the name of their competitor. If there is NO Colorado local competition, you might have to say “It looks like I’ll have to start ordering online. I saw a company online called “ABC company” and they look like a good option. I'm a Colorado small business owner, so I’d rather shop local, but if this is the new pricing, I’m out.” From there, you have the power to negotiate. Know your supplier’s competition!
- Does my business have a moat around it?
This goes along with number 5 from our last blogged Q&A – “what differentiates you from your competition?” You know that as soon as you start up a business similar to theirs, your competition will notice you on their radar and be watching and waiting for the right moment to swoop in and steal your business. They’ll do it by offering to do it faster, cheaper, or better than you do. So, how do you create a moat? YOU BE THE FIRST. If you haven’t pre-planned for this before opening your business, you need to do it as soon as you’ve got your business up and running – website, office, equipment, etc. Right after that first day of business, you do some digging to find out who your competition is and figure out what you can do that they aren’t doing or can’t do. For instance, if you are a candy shop and your competition sells most of the same candy, work on finding a candy supplier who will ONLY deal with you in your local area – that way you’re the only local store who sells that particular candy. Or if your competition’s store is filthy, you make yours shine. If their large party candy arrangements take 1 week to prepare, you do it in 2 days. Find your edge and use it to your advantage to set yourself apart, so that you have a moat – a protection against your competition.
I know that, for some, these tactics can seem “mean”, but I assure you that your competitor expects that you WILL employ these tactics. It’s not mean…it’s just a part of good business. Be sneaky as snakes but as gentle as doves. :)