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The Leading Edge December 2013
Small Business Success
Taking Care of Business  

    Contents
In this Issue

Surf the Trends for New Opportunities

5 Immutable Things I've Learned About Business

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THE LEADING EDGE - your monthly link to groundbreaking ideas for entrepreneurs

Not all for business but check out these 10 new gadgets!


Small Business News:

Business Barometer®: Small business optimism highest since beginning of 2013 - November shaped up to be a reasonably positive month for Canadian small businesses. CFIB's Business Barometer® Index gained almost a full point, posting a 65.9 this month over October's 65.0. It is also the second highest reading of 2013 after February's 66.2. For full report...


CFIB partners with consumer champion Gail Vaz-Oxlade to fight back against credit cards - CFIB is partnering with TV personality and debt crusader Gail Vaz-Oxlade on a campaign to encourage Canadians to give their credit cards a break for one day a week. Read more...


Female entrepreneurs remain a relatively untapped resource for economic growth: RBC Economics - New report finds female-run businesses are growing in numbers; however, increasing female representation could provide meaningful boost to GDP Read more...


Globe and Mail: Whole Foods provides loan to Canadian small business - When the owners of Molly B's Gluten Free Kitchen needed money for a commercial oven to expand their venture, they didn't turn to a bank for a loan. Instead, the Toronto-based family business borrowed funds from Whole Foods Market Inc., a U.S.-based chain of natural and organic foods, which supplies Molly B's products in its stores across Canada. Read more...

 
    Surf the Trends for New Opportunities
 
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Everywhere I look I see a move towards a consumerism founded on ethical awareness, economic sustainability, corporate responsibility and healthy lifestyles. Combine these values with a desire for higher-quality, greater choice, and lower prices and we have a fascinating, contradictory message from consumers.

A recent study by the Business Development Bank of Canada (BDC): Mapping Your Future Growth - Five Game-Changing Consumer Trends, puts forward some interesting ideas.

There's Nowhere To Hide

The worldwide web, the Internet, social media, the sheer level of consumer connectedness, is affecting the way we decide what, where and when to buy. I see people in stores, heck I've done it myself, price-checking on their Smartphone. We all do it. If we're not checking prices we're reading customer reviews. The scary thing for us as small businesses? If we're not managing our online presence - and make no mistake, we all have one - then we have no idea, or control over, what people are saying or reading about us.

The retail world is shrinking; our customers can just as easily check prices in Ontario and Hong Kong, as they can with our competitor next door. This trend is in full flood. Most of us have a website, but today that's like riding a Tsunami wave on a Boogie board.

To be competitive we need to be in touch with customers on multiple levels through social media. Larger corporations are already reaching out, making connections, offering discount coupons, building loyalty. How are they doing this? Through Smartphones, tablets, Facebook, Google+, LinkedIn, Foursquare and dozens of other social media portals - wherever their potential customers interact online. If your business is not connected wirelessly to your market, you are losing ground fast. The BDC study says 84 per cent of the population is connected to the Internet and on average they own 2.6 devices. Two-thirds of those on the Internet use social media and 41 per cent buy products and services online. Of course that's still a minority - a heck of a big one though!

If your online presence doesn't permeate all levels of social media, you are slipping behind your larger competitors. The level of intimacy they have with your customers is almost embarrassing in its depth and accuracy. Don't panic just yet though. Until recently it was expensive to have IT professionals collect, monitor and analyze this data; now there are many companies that will help you catch up with the big boys in no time, and at minimal cost - check out Diggit for a local service (www.diggit.com).

The Health Kick

Health and wellness products and services are hot right now. We're in the age of the baby boomer. Recent population projections show that by 2015, for the first time ever, there will be more elderly people than children. And that's a strong market - maintaining a healthy lifestyle is very much de rigueur for the 60 plus demographic.

It's not just the older market looking for products that will keep them healthier, fitter, and living longer; consumers of all ages are very active in this trend. The spa market is big, and getting bigger; health drinks are booming while pop sales are starting to weaken; and anything to do with weight management, especially meal replacements (a $35 million market) is growing. Many of us are looking for healthier foods, reducing our consumption of processed food and eating more fresh produce. Natural, organic, and local, are huge selling points. If you promote the health benefits of your product or service, or move toward making what you offer healthier and more natural, you will win new customers.

Local Is Good

Increasingly people want to purchase goods made closer to home; it's green, and economically and socially responsible. The BDC report states, " ... close to six out of ten Canadians consider themselves ethical consumers." It goes on to report, 97 per cent of Canadians buy local to support the local economy, 96 per cent to support local farmers, 93 per cent to create local jobs and 87 per cent because they feel it is better for the environment.

The marketing take-away here - with close to a third of all consumers willing to pay 15 per cent more for locally made products - is wherever possible, promote the local quality of what you sell.

I Want It My Way

This is what I call the Starbucks trend. If you've ever stood behind me in line at a coffee shop, you'll know what I mean. My brew is a grande, long shot, non-fat, extra hot, Americano Misto. This ability to have things tailored to our every desire is huge, with almost one-third of consumers wanting personalized products and services. It's a complicated marketing strategy though. Some companies have made the mistake of addressing this need by introducing a wider product range and are subsequently left with the inevitable slow sellers. Offering a level of customization however, allows you to learn a lot about your customers and allows you to compete with the bigger guys. Allowing this freedom increases loyalty and a sense of ownership.

The 2008 Echo

Salaries have stagnated over the last ten years and we are all using debt to replace non-existent wage increases. The average Canadian owes around $28,000 excluding mortgages. Rather than cutting back on buying however, consumers are looking for bargains. Take Groupon - with 40 million active customers, people pounce on its daily offers before they sell out. As mentioned earlier, it's easier than ever to shop around - people are looking for better value, higher quality and lower prices. Brand loyalty is being usurped by value/quality. I went into a local wine store recently where a $14.99 B.C. wine was on sale for $10.99, with a further 5 per cent case discount; it seemed as if every shopper had a case in their cart. The marketing opportunity here is to focus on the value/quality paradigm when competing against more established brands.

Trend watching is not only fascinating, but it can help keep your marketing strategy on point during a time when data is flying around quicker than cliché s on a chat show. Ensure you monitor your customers' online chatter, and analyze it thoroughly - you need to know what they are saying about you, what you sell, and your competitors. Interact with your customers online - create a dialogue - get them to share their thoughts and opinions - find out what they want now and deliver it. Big box stores are experts at this; to compete, move up to a professional surfboard and ride the waves with the big guys!

Resources:
consumer_trends_BDC_report.pdf
www.statcan.gc.ca

 
   
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"Keeping up with global trends in today's social media crazy world is no longer an option."

- Mike Wicks

 
   
5 Immutable Things I've Learned About Business Top
 

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I've been in the business world for a very long time. I rose through the ranks starting as a trainee sales representative for a publishing firm; subsequently became an area manager, sales manager, and eventually I headed my own division at a major publishing house in London, England. It was then, in my thirties, that I started my own business and since then I've become a serial entrepreneur. Along the way I've learned a lot about working for small companies, large corporations, and starting my own businesses. What follows are some of the indisputable truths I've discovered about business.

  1. Perseverance doesn't always mean you will succeed. Books, article, blogs, blithely tell you to persevere, to stick with it even when times are tough. It's as if all you have to do is be courageous, stubborn, hardworking and never give up and success will be yours. What a load of rubbish! Sure, you do need to persevere in business; sure you need to stick with it, but only to a point. Take a fisherman - do you think he will stay in one spot all day when the fish aren't biting? Of course not, he'll move on in search of a spot where they are feeding. So it is with business - you have to learn when to give up, when discretion is the better part of valor. There's no disgrace in giving up, once you've given it your best shot. Don't throw good money after bad.
  2. The honest guy doesn't always win. I realize I am in dangerous waters here, and I'm not suggesting for one minute that you become dishonest, but look around you - how many scrupulously honest highly successful, rich businesspeople do you see out there? The winners are mostly the shady guys; it's just the way it is. I suppose the message here is that it's easy to be too nice, too generous, both to customers and employees. First things first - you have to make a profit, or you won't be in business and if you aren't in business you can't service customers, nor employee people. Be above board, but make sure you are making money; after all you're not a charity.
  3. There's a huge element of luck in business. You are probably thinking; of course there is - what's he getting at? How many successful businesspeople do you know who are idiots? I don't mean your average joker, but someone you would never hire in a million years, but there they are running a business and making money. I know one such guy who owns more than a dozen businesses - he's great, I get on well with him, but he is almost computer illiterate, totally unreliable, and a loose canon in so many ways it's scary. But, he's successful and I can truly only put it down to luck. So, if you have been struggling for years, working hard, doing all the right things, but getting a meager return on your investment it may simply be that your not lucky in business. I'm supposed to be giving you advice here, but this is one immutable thing I've never found the answer to. Perhaps hiring a lucky person to run your company might work? Hey, it's worth trying!
  4. If you can't sell - get out. Zig Ziegler, the greatest sales guru of all, once said there is only one activity in a business that contributes to profit and that's selling, everything else contributes to cost. That is so true, if you can't sell, or don't enjoy selling you might as well give up now. Good salespeople are as rare as hen's teeth and those that do exist earn big money. Even if you find one, keeping them for any length of time can be a nightmare. The only way around this immutable fact is either to embrace selling yourself, or have a partner that loves to sell and who is fully invested in the business.
  5. Class Counts. As I mentioned earlier, I originate from England and I grew up in a very class-oriented society. It was never what you knew - it was whom you knew. For example, I was the only divisional head in my company who was not a director - it simply wouldn't have been right; I came from the wrong side of the tracks! If you had well-connected parents, went to the right school, university, or were a member club of one of the best clubs that is you were 'born with a silver spoon in your mouth' then it was smooth sailing all the way. You would rise through the corporate ranks, or meet all the right people, and make all the right connections to be successful in your own business. Even banks would be more likely to lend you money.

    Now, I'm told this has changed a lot since I left more than twenty years ago, but I am certain it still exists at a certain level. I say this because here in Canada the same paradigm is at work - not with class per se, but with education and social status. Increasingly I see that it helps greatly if we went to a 'better' university, know the right people and mix in the right circles. I think it was John Naisbitt, in his book Megatrends who stated that 100 people run a town no matter its size and that to be successful you need to know them all. I firmly believe that we are more likely to be successful if we socialize with the elite in our town, or our industry. In England I was judged by my accent which indicated I was from working class stock; luckily in North America that is less of an issue - just act with class, mix with the right people and success will follow. Perhaps, after all, it is about who you know, rather than what you know.

Looking at the five points above I realize they originate from a negative place, but in reality business is tough and it seems that many publications only want to give readers platitudes and only relate positive messages. The truth isn't that simple.

I hope you will take the positive messages from what I have written. Overcoming trials and tribulations is what we as entrepreneurs do every day - better to be forewarned and forearmed.

 
   
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"You need lucky breaks to be successful"

- Richard Branson

 
   
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