How Radar Can Improve Your Business

February 29, 2008

This is a guest post by Barbara Swafford of Blogging Without a Blog.

Diversify
Image by The Art Guy


Most businesses are started with one great idea. We go for it, and put all of our eggs into one basket.

In reality, this can work…for awhile.

But, what happens when the economy takes a turn, your products/services lose their demand, or you get bored? Do you have another income source?

If not, financial ruin could result.

That’s where diversification comes in.

Being a story teller, I’ll share a small snippet of what we learned.

Years ago we started an excavation business. Knowing we could be shut down in the winter months due to snow, we incorporated snow removal into our plan. We later added mainline testing and wood recycling. Often, when one phase of the business was slow, other parts were not. Diversification kept the cash flowing, the jobs coming, and provided constant work for our employees.

If you have a store front, think beyond the obvious reason customers are coming in.

A gift shop sells gifts. A customer is coming in to find a gift (dah). Most likely, they will take the gift home, wrap it, and attach a card.

Add cards, wrapping paper, ribbons, bows, scissors and tape to your gift shop inventory. Consider offering a wrapping service for a small fee. Offer free wrapping with a purchase over $xx.xx. Expand this service to include wrapping items not purchased in your store, charging more, of course. The holidays could bring in tons of business. The key is to have beautiful paper, ribbons and bows. Make a statement, so others will ask “Where did you get that from?”

Take a Starbucks store for example. When you think Starbucks, you think coffee. But if you go into one of their stores, they offer bakery items, cups, prepackaged coffee, thermos bottles, candy, gift packs, and special blends (beans or ground).

A store front IT business could sell a small assortment of office supplies, or if you have a favorite brand of printer, consider becoming a dealer/distributor. Expand your services by offering the installation of upgrades. Set up an account files to notify customers when a new product is introduced to the market. Become a “computer doctor” who does house calls - not just for businesses, but for individuals as well.

A plumbing repair service could offer a small selection of faucets, shower heads, and hoses. Catherine, who works from home, could have an online store to which she could refer her customers. Also, when her employees go out on a service call, they could stock a few classic pieces in their vans, and offer to install a new one, if the old one is beyond repair. This could eliminate return service calls, saving time and money.

By analyzing your current business, there are many ways to add on sales, and/or to offer additional services.

We need to think like a customer. Make your business a “one stop shop”.

Most people are pressed for time.

Be prepared to give them what they need, even before they know they need it.

Use your radar.

Do you have a business you are trying to diversify?

Need help?

Leave a comment and let’s brainstorm.

You can read more great articles by Barbara at Blogging Without A Blog .

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Comments

23 Responses to “How Radar Can Improve Your Business”

  1. Mrs. Micah on March 1st, 2008 12:47 am

    I like the one-stop shop idea. I wonder if/how that’s possible with a blog. Hmm.

  2. cathlawson on March 1st, 2008 12:52 am

    Hi Mrs M - I bet there’s heaps of things your blog customers would need. It’s just a question of brainstorming.

    As you know - I’m not hot on personal finance - that’s why I get my advice from you. But, I’ll have a think. And I bet Barbara and others will come up with things too.

    cathlawson’s last blog post..How Radar Can Improve Your Business

  3. John Hoff on March 1st, 2008 1:18 am

    Hello all. GREAT post, Barbara.

    It’s about piecing things together, isn’t it. You must get into your customer’s head and solve their problems now and the problems you know they will have. By solving their problems you are only solving your own.

    The best way I do that is imagine back when I was one of them - but that only goes so far. Obviously everyone’s different.

    @Mrs. Micah - the one stop shop is really great. I primarily am a web hosting company geared toward entrepreneurs. At the moment all I offer is web hosting, a blog, and a community forum. But I’m currently working on providing web design, content creation, banner/logo design, etc.

    All these things my target customer needs. A vast majority of new entrepreneurs just starting out probably don’t know tons about web development - so I’m going to give them what they need. Even if they don’t host with me, I’m diversified.

    As for your blog, I took a quick look. It appears you help people with their finances, but what I saw on there was other things for sell that had nothing to do with that? Now I didn’t spend much time on there so I apologize if I have this wrong.

    It doesn’t seem very targeted. If you offer finance help for people, maybe think about who they are and what situation are they in.

    Are your customers primarily business owners? Maybe sell business cards or special financial calculators or something.

    I’d say for a blog to be a one stop shop for your readers you have to do just like Barbara mentions, sell things that compliment your services. Drop shipping might be an easy route.

    John Hoff’s last blog post..The Art of Persuasion (Part 2 of 3): Knowledge, Timing, Listening

  4. cathlawson on March 1st, 2008 1:36 am

    Hi John - it’s a wonderful post isn’t it. Barbara has already given me some great ideas in there for my business. And the idea of keeping taps (faucets) etc on the vans is great as people are always wanting to upgrade.

    Also, that is good advice you’ve given to Mrs Micah - know what your customers want and give them it.

    I have just spend a Friday night dealing with a supplier who did the exact opposite and I’m so unhappy. They have wasted my time completely - because they didn’t care what I wanted. All they cared about was using me as an avenue to promote their business, whilst providing me with a shoddy service.

    cathlawson’s last blog post..How Radar Can Improve Your Business

  5. John Hoff on March 1st, 2008 2:05 am

    That sucks. You know, if you consistently do bad business and don’t care about your customer, word WILL get out. Count on it.

    Peter Morton of the Hard Rock Hotel here in Las Vegas sent out a message to all his employees for 2006. It was 3 lines and ended up being a major campaign within the Hard Rock for their employees.

    Here’s basically how his email read:

    “For 2006 I only have three things to say:”
    - Take care of the customer
    - Take care of the customer
    - Take care of the customer

    I’d say he knows that getting a bad rap isn’t gonna cut it in business.

    Hope you have a better next Friday, Catherine :)
    John Hoff’s last blog post..The Art of Persuasion (Part 2 of 3): Knowledge, Timing, Listening

  6. cathlawson on March 1st, 2008 3:01 am

    Hi John - Thank you. I definitely want to stay in a Hard Rock Hotel then. And Las Vegas is on my must do list - it’s just so far away. From here - the plane journey to the East Coast is bad enough.

    cathlawson’s last blog post..How Radar Can Improve Your Business

  7. Ian Denny on March 1st, 2008 3:58 am

    Sagely advice. Particularly as 2008 may be a tough year for many.

    We’re diversifying our services. We’ve acquired a stake in a complementary business - one which will add value to the services we offer clients.

    In addition we are building relationships with other complementary service providers.

    But with a primary goal in mind - to make the clients’ IT infrastructure more stable/robust, or, to improve their operational efficiency.

    You do have to be careful in low margin areas though. I agree that an IT store-front business can do well diversifying their range. It can also increase footfall for those who may buy the items you add to your range, but create customers for your more core business.

    I do have a word or caution on that though. Low margin products supplied on credit can potentially do more damage than good.

    It was one of the contributory factors to us going bust - we support IT for small businesses, but by accident more than design we’d added supply of PCs, printers etc to our services.

    Unless managed particularly tightly, it can strangle cashflow - high ticket items, low margin is difficult to turn around with credit terms for your clients and add much to the bottom line.

    The administration of a service like this can quickly gobble up those limited profits and leave you short.

    When we re-started, we retained the advice to the client of what to purchase, but ensured they purchased direct from suppliers.

    That way we didn’t have the cashflow burden, but ensured we added value to our service. Of course we charge for installation/configuration, but have off-loaded a potentially loss-making and definite cashflow strangling element of what we do.

    If you have a store-front, that’s a different matter. People pay up-front and leave the store with the goods.

    Apart from keeping a rapidly depreciating inventory/stock, cashflow is far more free-flowing.

    Ian Denny’s last blog post..Non-US Citizens Vote In Next US President

  8. Barbara on March 1st, 2008 5:26 am

    Hi all,

    I just returned for an evening out and am happy to see my post was well received.

    It’s amazing how we can all put our heads together and come up with ideas for each other. That’s one thing I really like about blogging….helping others.

    BTW: Catherine guest posted and my blog, helping my readers with great advice on increasing search engine traffic. Just click on the link to read her great advice.

    .

    Barbara’s last blog post..Increased Search Engine Traffic For Lazy People

  9. sterling okura on March 1st, 2008 9:38 am

    Hi Catherine, thanks for sharing Barbara’s guest post. Good practical advice. Vegas is fun. If you ever make it down, I bet a lot of bloggers (myself) including would love to meet up for a cocktail.

    @Barbara - Great job listing those possibilities with different types of businesses. I love how you use your own experience with your excavation business. No smoking hens in this post!

    @John - Good message. I want to stay at the Hard Rock next time I’m in Vegas (we go several times a year). Hard Rock also hosts WEC fights!

    sterling okura’s last blog post..Fishing With David Lynch: Creating Value From Nothing

  10. Stupid Flu. Ruining my weekend. Grrr. | Sophia’s Blog on March 1st, 2008 1:54 pm

    [...] Lawson had a neat post yesterday about making your blog or website a “one-stop shop.”  It’s a neat concept.  [...]

  11. John Hoff on March 1st, 2008 5:39 pm

    @Sterling - yeah they use to host the UFC at the Hard Rock but lost that out to the Palms. WEC is the amateur version of UFC and is owned by them also.

    BTW the Hard Rock was bought out by the Morgans Hotel Group and is no longer owned by Peter Morton - though I believe their guest services are either as good or better! I believe their new addition to the hotel is due to be completed sometime in ‘09. Until then, avoid the Hard Rock - I’m sure there’s lots of construction going on and it could be loud.

    John Hoff’s last blog post..The Art of Persuasion (Part 2 of 3): Knowledge, Timing, Listening

  12. Nez on March 2nd, 2008 2:09 am

    Hi Barbara,

    Thanks for the very interesting post.

    Over here in the Bay Area, we have a couple of Fry’s Electronics, which, the first one of which started out “small” selling electronics and computer parts, etc.

    Nowadays, they’re huge (with sales of $2.4 Bil, according to wikipedia), selling almost every “gadget-y” thing under the sun, and even non-gadget-y things like plush toys, books, magazines, etc.

    They run you through a long “maze” to get to the check-out stations, exposing customers to maybe 200 combined feet of impulse-buy items like candies, snacks, batteries, shavers, etc.

    They carry a large inventory, and some prices are decent, but their customer service is mediocre at best.

    They certainly did pay attention to their radar.

    Nez’s last blog post..Why People Love a Good Mystery

  13. cathlawson on March 2nd, 2008 4:31 am

    Hi Ian - Good point on the low margin stuff. If you’re offering extra stuff like that on the internet - an affiliate program can sometimes be a better option.

    We do that for bathrooms. It provides an extra option for those who just want to organise everything online and it’s good for us, because it persuades them not to go elsewhere.

    Hi Barbara - Hope you had a good night out.

    Thanks Sterling - that would be wonderful.

    Nez - that is a pretty huge turnover for a company that started out so small.

    cathlawson’s last blog post..How Radar Can Improve Your Business

  14. Barbara on March 2nd, 2008 7:02 pm

    Mrs. Micah,

    After reviewing you site, I could see you adding more book reviews, and/or books for sale via Amazon (/) on financial topics.

    Those that are popular now are Suze Orman (all of her books are great movers), “Debt Cures” by Kevin Trudeau (he’s doing a huge campaign on this book—getting mixed reviews), and the ones by Jim Cramer of CNBC’s Madd Money, titled “Real Money” and “Mad Money”.

    It appears many don’t have time to read, so a good review and your analysis could inspire your readers to include some of these books in their library.

    “Star” ratings or thumbs up/down would be an easy way to incorporate your view into a post.

    “Money” magazine may also me a good source for inspiration on financial topics.

    FICO scores and credit reports are a hot issue now, and through Commission Junction, you can sign up to become an affiliate for “my fico.com” which is endorsed by Suze Orman. I signed up for it years ago, and was very please with the results.

    One thing I might delete from your “about page” is your age. Although you are wise beyond your years, some readers may not realize it, and think “what can a 22 year old tell me…I’ve lived so much longer…” By leaving your age, you may be narrowing your audience down to a specific age group.

    Mrs. Micah, I hope this helps.

    Barbara’s last blog post..Increased Search Engine Traffic For Lazy People

  15. Barbara on March 2nd, 2008 7:11 pm

    Hi John

    You already have used radar with your blog. Including “how to write a business plan”, “protecting your assets” “…understanding human behavior, etc…you are helping your readers and potential customers become informed. By providing so much valuable information for free, you have built up your credibility, thus increasing your chances of sign ups.

    Your “about me” page shows us what you have done and reinforces your credibility.

    It’s obvious you do your homework.

    It shows in your well developed website/blog.

    Barbara’s last blog post..Increased Search Engine Traffic For Lazy People

  16. Barbara on March 2nd, 2008 7:57 pm

    Hi Catherine,

    I’m happy to hear I gave you an idea or two, also.

    England to Vegas? That would be a long trip. Let’s all meet there and crash at John’s place. :)

    Hi Ian,

    With your past experience, you know all about diversification and how it can help in providing customers with what they want/need. You are also in a position to advise your customers of good quality hit ticket items.

    For a storefront IT store, I can see having them stock reams of paper, file folders, and even pens. Often when customers are waiting to be served, the see something and think, ” oh yeah, I need that too”, and don’t consider the price. I think that’s why convenience stores do so well. They stock a little of everything, and many will pay for the convenience of location, (not having to go to a larger store, find a parking spot, wait in line, etc…).

    Hi Sterling,

    Haha…no smoking chickens on this post. I guess I could have titled it “Don’t Be A Chicken, Have a Smoking Hot Business”. :)

    Hi Nez,

    It sounds like Fry’s did use their radar. Their idea of the “maze” works. I’m a sucker for even the short section of the grocery store. I try to refrain from picking up magazines or gum, but I can usually hear them saying “Gotcha” when I leave.

    I think it’s interesting how you mentioned customer service. That subject comes up a lot. Makes me wonder why businesses don’t spend more time/money on it.

    Could that be the key to a successful business? Maybe….

    Barbara’s last blog post..Increased Search Engine Traffic For Lazy People

  17. Hunter Nuttall on March 3rd, 2008 4:09 pm

    Hi, Barbara. Nice to see you doing a guest post here.

    Peter Lynch uses the term “deworsification” to refer to when companies expand beyond their core competencies with disastrous results. But it’s about companies offering services that aren’t related to what they’re good at, like if Starbucks started selling computers.

    The one stop shop is smart diversification because it’s about better serving the needs of the customer. It requires more thought than just offering random unrelated services, but it’s well worth it.

    Hunter Nuttall’s last blog post..Lessons From The 2008 Congress Of Jugglers

  18. cathlawson on March 3rd, 2008 7:30 pm
    Barbara - that sounds like a brilliant idea.

    Hi Hunter - I’m a fan of Peter Lynch and I don’t remember reading that term. It’s an excellent one though.

    And you make a good point. If you’re going to diversify - you need to find products that your existing customers will want, or find a new market for what you offer already.

    Barbara’s suggestions have been so useful. Our slow times are July, August and January - so we need to find something else we could be doing them.

  19. Barbara on March 3rd, 2008 9:00 pm

    Hi Hunter,

    Thanks for sharing, and with regard to the point of going outside your niche, I’ve seen this happen on blogs. The title or tagline will be something like blogging, and then all of a sudden you see articles on some weird subject. Steve Pavlina did that and threw in a post about how to cook brown rice. His readers were really thrown off. But if you follow his blog, it was rather amusing, For a newcomer though, it could have caused a few heads to shake…what?!?!

    Barbara’s last blog post..Blogging Etiquette - The Unwritten Rules

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