Your Small Business at the Core - Low, Medium, or High - What?

If you have started a small business in the last 3 years and the business isn't going as planned maybe there is a reason for this, a reason that may not be evident initially, but when you look a little closer it may have a drastic effect on your business.

When you started the business you had an image of what name you would call it, what you would sell or service, be it retail or restaurant. You like the idea, seen it elsewhere, knew you could run it or got the help to make it a reality. But what you didn't know is that is wouldn't be profitable, even though all the numbers and all the experience said it would, why was this so?

There can be many factors, either to do with the business, the economy, financial planning, the owner, the staff or the product, but if you have isolated these and still can't figure it out then you might try the following, even though all these other areas seems to be operating properly.

It is your niche, you may have the wrong type of business in the wrong area. There are several not so obvious reasons for this:

1. The location you wanted was not available.

2. The customer don't think your business is what you think your business is.

3. Customers use another business very similar to yours that is nearby or down the road.

4. Someone else in the area has better price or better quality than you.

5. Someone else has better margins or longer customer loyalty than you.

So you how do you determine all this without doing an extremely exhaustive survey, research, feedback and a lot of time with areas you may not understand. Well if it was that easy everybody would be able to figure it out. But here is what you can do.

Is your small business low, medium or high? In essence does your small business cater to a high-end niche market with class and lots of spending money that expects well-defined service and materials, where you may not need a lot of volume to make a profit but a high level of quality.

If you business is medium there may be a few similar competitors, they may or may not be in your area, but they may be your competitors depending how far your customers may be able to travel or if owners use technology to service customers in your area, either using delivery or internet business technology. This is an area that is becoming more competitive and not so easy to define a general trading area anymore.

Finally is you business low? Low profit but high volume. You need to do a lot of volume in order to make a profit. You may be losing for 2 very certain reasons:

1. Your location is not close of convenient enough to your customers? Others may be closer of may have made it more convenient to get customers, there are numerous reasons for this which would take a whole book to explain but think about the word "convenient" and what it may mean to your customers.

2. Your margins are not profitable or they never will be because bigger competitors with more money or more loyalty are in your area and will squeeze you out.

In essence, you need to make a move. Are you low, middle or high? Is it working for you? Perhaps it is a time for a change? Make sure to get a professional and other people's opinions.