It just struck me as funny the other day when I saw a “Going Out of Business – Everything Must Go” sign on a store that sells used CD’s/DVDs. Shouldn’t they have announced that their inventory was for sale sooner?
Everything Must Go Boxes Overstock Inventory Store Closing SaleThe only marketing or advertising I have ever seen for the little shop is this fresh Going Out of Business sign. What they really needed was a “Now Open – Everything Must Go!” sign. I am sorry when any company is forced to shut down. (Assuming they are. There is a furniture store near me that has has been closing for three years.) I suspect that the used media business is on its way out and I have to believe that the store owners are more than aware of this. However, I have to wonder what they could have done differently.
I am a big fan of reality business shows (no big surprise there). Anything with a restaurant or bar makeover is fun for me. I also enjoy Shark Tank because there is are financial valuations and strategic thinking taking place in real time. However, the best of this genre is The Profit starring Marcus Lemonis. Marcus’ focus is on “People. Process, and Product”. The companies he features on his show are potential investments for him. They generally have a viable product and a solid revenue stream. What he’s looking for are ways to improve the company to make his investment grow. He buys potential.
The drama of the show is there for entertainment – a delusional owner makes good TV. However what I am drawn to is the basic business strategy. Marcus spends a lot of energy on marketing, because that is generally the one area that small business owners really don’t understand or appreciate. He changes company names, closes locations, opens new ones, remodels stores, consolidates products lines, alters pricing models – you name it – all with a fair amount of resistance from the owners, who are more worried about protecting a few existing customers or out of date assumptions. He can’t help everyone. Some just can’t be helped. I think Marcus walks out of as many deals as he completes.
I like The Profit because it is so real.
No, I don’t know the whole story on the video store. There are a myriad of reasons for a small business to fail. Many of them are uncontrollable. A lot of them are. There are three things you need to know to run a successful business:
You have to know how to produce and deliver the products or services you are providing. You have to be an expert, which means you have to keep on learning and improving. Never forget that there is always someone that can do it better.
You need to understand basic accounting and finance. The numbers tell a story and often point out the right and wrong ways to go. Paying attention can help prevent disaster, but understanding can reveal opportunity.
But equally important and most often neglected is that you need to plan and execute effective marketing. It’s an investment that you cannot afford to skip.
Any two will keep the doors open, but you really need all three to thrive. Remember, Everything Must Go.