The Australian Small Business Blog

Tuesday, March 25, 2008

Use Your Points of Difference to Stand Out



One of the biggest problems we all have in small business is standing out. Almost everyone has competitors of some description. It could be the person down the road that promises to undercut whatever price you offer. It could be the elephant in your marketplace- for example, if you are a small telco, the elephant is Telstra.

Or your competition could be a myriad of me-too suppliers in highly competitive marketplaces all driving the prices down to the point where no-one makes any money.

So how do you stand out from all this competition? You make sure your business is different in some way to all your competition, and you make sure potential customers who value that difference, and will pay more for it, know about it. The first step in differentiating your business from everyone else’s is to answer the question:

Why Should I Buy from You?

Can you answer this question? You must have an answer. If you don’t know, you customers certainly won’t, and you will find you are just competing on price and barely surviving.

The answers to the question: “Why should I Buy from You?” are your Points of Difference (POD). This is arguably the most important marketing strategy to get under your belt. In marketing speak it is also called your Unique Selling Proposition or USP. What this means is that you are defining why your product or service is different to everyone one of your competitors. When you have your USP, you actually have no competitors, because your offer is unique.

Great in theory, but just a word of warning. This also means that your product cannot be considered universal any more, and your USP will appeal to a more narrow group of customers, or a Niche.

So what does this mean in practice? You might be the cheapest. This will, of course, attract a lot more business, which will compensate for your lower margins. However, this will not appeal to everyone. Lowest cost, usually means no frills. Jetstar is a no-frills airline, but Qantas still has lots of passengers who want the extras, and are prepared to pay for it. So Qantas and Jetstar promote themselves to different audiences.

Maybe you said your Point of Difference was the quality of your service. I am now going to say something that may shock you:

Quality of service is not a good enough reason for people to buy from you.

Everyone says they have quality service. Have you ever heard anyone say: “Buy from me, my service is lousy?” Quality is a given, a pre-requisite today. Everyone says they offer a quality service. So what’s the answer? Surely ‘quality’ counts for something?

Regular subscribers to the Small Business Achiever - Business Owner Brief will already know who their competitors are. In Issue 101 – where this full article is published, subscribers learned how to create Points of Difference for their business.

In Issue 103 of the Small Business Achiever I explain how these points of difference can be used o the fundamentals of how to increase your prices with your Points of Difference can be used in your ads and on your website.

In Issue 103 of the Small Business Achiever - Business Owner Brief find out:

The Anatomy of Ads that Sell

Creating a Structure that will Drive Your Business Growth

Designing a Website that Generates Leads for Your Business

Get step-by-step advice that will improve your business every month.

May Your Business be as You Plan It!

Dr Greg Chapman

Over to You. What do You Think? Post Your Comments Below.

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.


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The Australian Small Business Blog

Tuesday, March 11, 2008

Why You Should Increase Your Prices & Why Most Owners Won’t



Before I answer this, try answering the following question:

Why are You in Business?

People give all sorts of reasons. Often they refer to some higher purpose, such as helping people in some way or providing for some personal lifestyle needs. This is all very well and good, but all these objectives will be compromised if the one overriding purpose of any business is not met- that is to make a profit!

Why is making a profit so important? If you are not making a profit, you are just breaking even, or more likely, making a loss. (Even when owners believe they are making a profit, they often aren’t as they have not considered the sustainability of their business.)

If your business is losing money, your energies and resources for any other purpose will be drained. You can’t continue helping people if you are going out of business. Likewise, if your lifestyle business is making a loss, it won’t be a very happy lifestyle. So if your business is unprofitable, the chances are very small that you will achieve other objectives through your business.

So let’s agree that making a profit is the prime purpose of your business. What then are your options to make your business more profitable? You can:

1. Reduce your Costs
2. Increase your Sales

Pretty basic really. Lets look at the first – decreasing costs. This is a limited strategy as at some point, you will compromise your sales. Whereas, increasing your sales is a no limit strategy.
There are five strategies you can use to increase your sales. These are the Five Turnover Drivers:

• Increasing Enquiries
• Increasing Conversions to Sales
• Increasing the Average Value per Sale
• Increasing the Number of Times Someone Buys from You, and
• Increasing Your Prices

Good businesses will focus on all five turnover drivers, but the one most find hardest to implement is to increase their prices. Let’s look at why people don’t increase their prices.
When setting prices, businesses look at what their competitors are charging. If they charge too much, they know they will lose business because their competitors are cheaper. But…

Are these businesses really your competition?

Regular subscribers to the Small Business Achiever - Business Owner Brief will already know who their competitors are. (Issue 101 – Standing Out with Your Points of Difference). If the people who you are comparing yourself with are not your true competitors, why should they influence your prices?

In Issue 102 of the Small Business Achiever I explain the fundamentals of how to increase your prices so that the fear of business loss will no longer trap you in the price taker role in which most businesses languish. In fact, this strategy will transform your business!

In Issue 102 of the Small Business Achiever - Business Owner Brief find out:

The Easiest Way to Increase Your Prices

How to Start Getting Your Business Organised

Being Found on the Internet - Paid vs 'Free' Search

Get step-by-step advice that will improve your business every month.

May Your Business be as You Plan It!

Dr Greg Chapman

Over to You. What do You Think? Post Your Comments Below.

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.


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The Australian Small Business Blog

Monday, March 03, 2008

Who Needs a Business Plan?


Everyone in business knows you have to have a Business Plan, but very few have one. Most of those who do, haven’t updated it for years. So year after year people carry on with an out-of-date, or no business plan at all. In fact, they go on so long like this, they even convince themselves they don’t need one!

So let me ask a controversial question. Why have one at all? Aren’t they just an academic exercise? Pretty much everyone who doesn’t have a formal plan says: “I have a plan, its in my head” What’s wrong with that?

If you were going on a month long tour of Europe, would you be satisfied with a plan in your head? Or would you have a daily itinerary showing how you will be getting from place to place and where you would be staying each night. Would you create a budget to work out how you would pay for all this, and how much spending money you will need for meals and other expenses. Would you have a detailed listing of your bookings?

Only when you write all this down, might you see that you have left insufficient time to travel between stopovers, or spending too long in some places and not long enough at others. Then you would re-organise your itinerary until it was right, before you confirmed all the bookings.

Even if you do all that, you know things might still go wrong- planes delayed, connections missed, overbooking, etc. So you would put a little bit of extra money aside to cover such contingencies.

Your itinerary would also be marked for certain highlights that are must sees for you - the main reason for the trip, to make sure that you don’t return home and realise that you missed an opportunity while on tour.

In business it’s the same. The more you write down your goals and plans, the more likely it is you will identify gaps in desired outcomes and capability, and the opportunities you need to find, so that you don’t miss them when they arise.

Your Goals are Your Opportunity Finders

Due to the way our brains function, you only identify the gaps and see the opportunities when you write them down. So if you don’t write down your plans, there will be flaws that you will miss while it resides in your head, and you will miss the opportunities that will transform your business.


Now, if you are like most people, you will be saying “I know I should have a plan, but it takes so long to write out a plan, and if I hire someone to do it for me, it will also be expensive.” Several years back I wrote an article called: The Real Truth about Business Plans – What the Consultants don’t tell You! It will probably make you feel a little better, but only a little!

In summary, the article says that even when people produce a plan, they never update it or look at it again because it was such a major effort to produce it, and it was not seen as tool that they would use for their business every day.

A Business Plan in One Hour

What if you could produce a Business Plan in an hour, and it could fit on a single page? Does that sound like a plan you would be prepared to invest your time in and use? You wouldn’t even have to pay someone to do it for you. Well, that is what I am about to show you how to do now.

As for just about everything in life, the 80/20 rule applies to business as well. That is, 80% of the benefit of anything comes from 20% of the effort. The remaining 20% of value coming from an additional 80%. So if you have limited resources, it makes sense to at least to do the 20%! So now I will show you how to do that 20%. You can hire a consultant to do the other 80% if you want to later.

Find out how to create a One Hour Business Plan that fits on One Page in Issue 101 of the Small Business Achiever - The Business Owner Brief

May Your Business be as You Plan It!

Dr Greg Chapman

Over to You. What do You Think? Post Your Comments Below.

Dr Greg Chapman is the Director of Empower Business Solutions and The Australian Business Coaching Club and is Australia's Leading Advisor on Emerging Businesses and provides Coaching and Consulting advice to Australian Small Business Owners in Marketing & Business Strategies Planning & Systems. He is also the author of The Five Pillars of Guaranteed Business Success.


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Dr. Greg Chapman is also the author of
The 5 Pillars of Guaranteed Business Success

The Five Pillars of Guaranteed Business Success

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