Excerpt from Character 28: Competitor

Let’s return to our broad-brush definition of “competitor” and focus on this part of it: “a company in the same industry who offers a similar product or service.” Interpreted too broadly, this can be misleading. Much depends on what we assume “same industry” and “similar products or service” mean.

In the case of “same industry” you wouldn’t think of, say, a coffee shop or café as being in competition with a supermarket. But on Fourth Street, Calgary, where I lived, five coffee shops and cafés in as many blocks sell pastries in competition with each other and the local supermarket bakery. A literal interpretation of “same industry” doesn’t necessarily suggest a coffee shop and a supermarket as competitors, but clearly in this case they are, as portions of their otherwise disparate businesses overlap.

“Similar product or service” might make you think of competing clothing retailers. After all, they all sell clothes. But H&M isn’t in competition with the Salvation Army Thrift Store. In this case, “similar product or service” doesn’t place all retailers in the same marketplace.

It’s necessary to identify your actual competitors. If you don’t do this, you could end up like an errant coonhound wasting your time barking up the wrong tree at the wrong quarry while the quarry you should be watching sneaks up and bites you in the butt.

Excerpt from Character 24: Franchisor

Just as he’s pondering whether he has what it takes to conquer this mountain, an apparition—one that could easily have been created by J.K. Rowling—appears and makes Mr. Wannabe a very tempting offer. The apparition says that for a small fee (nothing is for nothing even in fantasies), it can transport him over Mount Start-Up and deliver him straight to a business of his own in the village of Business Bliss. Mr. Wannabe is very tempted, but hesitates as he wonders: Is this too good to be true? Could I be rushing in where angels fear to tread? And who is the apparition? 

Back in the real world, we know that Mr. Wannabe’s apparition is a franchisor—a franchisor who, for a fee, promises avoidance of most of the blood, sweat and tears associated with independent start-ups. And in the real world, seldom is anything in business as cut and dried as it may first appear. This is particularly true of franchising, which brings with it special elements that demand clarification and understanding. And the first thing to understand is that franchising is different from independent small-business ownership in that the franchisor exercises influence through a franchise agreement.

So who is this franchisor?

Excerpt from Character 32: Website Host

This character should be on every small-business owner’s contact list. Regrettably, this isn’t the case. Nowadays, the cost of setting up a presentable website can start at under a hundred dollars. Reliable hosting can cost as little as twenty dollars a month. In spite of this, about 40 percent of small businesses still have no presence on the web. But enough tut-tutting about a discouraging statistic for now. We’re here to discuss an important character—the Website Host. For the sake of convenience, let’s think of this host as an individual, even if it’s a big corporation.

Website hosts, just like any other service providers, aren’t all cut from the same cloth. Selecting one isn’t as simple as surfing the internet and picking a name—the digital equivalent of of throwing a dart at a list. Different options come with different offerings and vastly different price tags. It’s therefore important to consider your web hosting options while keeping needs and costs in balance. You don’t want to subscribe to an inadequate service , but you also don’t want to pay for more than you need.

Excerpt from Character 5: Financier

“This Wednesdays’s Lotto 6/49 jackpot is twelve million dollars. What would you do with Twelve million dollars?” asks a smarmy male voice. An animated female voice replies, “Maybe I’ll open my own business . . .”

I reach for the car radio’s Off button. Sheer nonsense. I don’t know a single small-business owner who would endure the daily grind if he or she were sitting on twelve million dollars. In any case, I need silence to contemplate the concept of lotteries as a source of business funding. It’s something that hadn’t crossed my mind until a moment ago. I’m intrigued—not because I’d consider the proposition seriously (the odds of winning this particular lottery jackpot are about 1 in 14 million), but because of what this lottery commercial seems to confirm about the financing of a small business.

It’s safe to assume that the lottery organization’s advertising agency did its homework. And it’s also safe to assume advertisers don’t record the first dialogue that comes to mind; surely they conduct research and then write the commercial’s script for the widest appeal? And I’ll bet the research confirmed what a lot of small-business owners and would-be owners have known for a long time—many people dream of running their own businesses but lack the cash.

 

Excerpt from Character 6: Family Member

One hesitates to write about a family member in the way one hesitates to prod a bear with a pointed stick—neither is going to like it and both will let you know this in no uncertain terms. Family-member business relationships are common in the small-business community, though. They cannot be omitted from a book about the characters who can make or break your business. I knew that I wanted to share my own experiences while addressing this topic—I’ve attempted going into business with both my brother and brother-in-law. But I hesitated to write about it (think bear and pointed stick). Then Ms. Lamott gave me the green light. She told her TED audience: “If you don’t know where to start, remember that every single thing that happened to you is yours, and you get to tell it. If people wanted you to write more warmly about them, they should’ve behaved better.”