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American Business Brokers & Advisor Founder & President PROFESSIONAL INTERMEDIARY & MARKET MAKER FOR PRIVATELY HELD COMPANIES Advisor • Consultant • Speaker Market Valuations Involved in Closing 500+Business Transactions & Over $500 Million Author of ‘The Art of Buying and Selling a Convenience Store’
SEPTEMBER 2019
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Niches Lead to Riches
“I’ve heard it said that there are riches in niches. When a business specializes in producing a few goods or services really well, ideally without much competition in the market, they tend to be successful.”
2 Pitfalls to Avoid When Trying to Specialize
I n the book “The 22 Immutable Laws of Marketing,” authors Al Ries and Jack Trout say that if you can’t be the first business in a certain category, you have to create another category. Jack Welch, former chairman and CEO of General Electric, followed this immutable law to the T. One of the things that made his tenure so successful was they were always creating new categories in which they could be No. 1. I’ve heard it said that there are riches in niches. When a business specializes in producing a few goods or services really well, ideally without much competition in the market, they tend to be successful. But specialization is easier said than done, and most businesses will miss the mark in one of two ways: Either they will try to serve too many demographics at once with their goods or services, or they’ll specialize in a good or service
customers too many choices. Subway is guilty of the same thing. After flooding their menu with so many options, they had to cut it back because it was slowing down their operations and confusing their customers, costing them time and money. On the flip side, look at Chick-fil-A. They make more per restaurant than McDonald’s, Starbucks, and Subway combined — and they’re closed on Sundays! It’s because their menu is accessible, and, instead of overwhelming customers with choices, they focus on making a great chicken meal. What are McDonald’s and Subway known for? It used to be hamburgers and sub sandwiches, but they lost their niche along the way. As a result, they lost being No. 1 in their category. So, how do you successfully become No. 1 in a niche? You need to know your market and give your market what they want — not what you want, but what the market wants. If you operate a convenience store, you would begin by finding out who lives within a 1-, 3-, and 5-mile radius of your business. What is their socioeconomic background? What goods and services do they buy? Then, serve them those goods and services until you are No. 1 in your market. You don’t become No.1 in a niche by offering too many choices to too many people. That will just confuse the market place, and you will never have a unique identity. Your ultimate goal is to become the go-to place of business for the best burgers, customer service, best selection, or cleanest stores. It doesn’t matter as long as you are No.1 in your category. Strive to become the Jack Welch of your business, and before long, your customers will be talking up your business as the best place to visit because you are the best at what you do in your marketplace.
they like while ignoring what their customer base actually wants or needs. In other words, they’ll try and serve everybody all at once, or only themselves. A few restaurant chains in the fast- food industry fall prey to that first mistake. Some of them have menus like pulp fiction novels — all words and no substance. Take McDonald’s, for instance. I eat there a lot because I travel, and McDonald’s has created a reputation around the consistency of its menu. A McDonald’s cheeseburger tastes the same in Dallas, Texas, as it does in Fargo, North Dakota. I always know what I’m getting. But one way McDonald’s has undermined its consistent menu is by giving its
–Terry Monroe
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Intellectual Property and Your Business
How to Effectively Protect Your Intellectual Property
FIXED MINDSET VS. GROWTH MINDSET You may have heard the phrase, “If you’re not growing, you’re dying.” It applies not only to your business but also to the mindset with which you approach everything in life. According to research from Stanford psychologist Carol Dweck, everybody has one of two mindsets: a fixed mindset or a growth mindset. Depending on which mindset best describes you, your business — and your life — could be destined for doom or destined to bloom. So, what are the characteristics of these two mindsets? Someone with a fixed mindset believes their success comes from their innate talents and intelligence. They take stock of these traits, but they don’t tend to develop them. People with a growth mindset see their innate talents and intelligence, instead, as only the beginning. They believe that with time and effort, they can develop themselves to become smarter, more skilled, and ultimately more successful. The biggest trap that people with a fixed mindset fall into is striving for the approval of others. Since they believe their hand at the start of the game is all they’ve got, they’re stuck hoping it will be enough. When it’s not enough, their self-worth takes a hit, and their failures mean they’re not as smart or talented as they thought. Intellectual property is defined by Merriam-Webster as “property (such as an idea, invention, or process) that derives from the work of the mind or intellect.” As you can no doubt glean from this definition, intellectual property can be a lot of things, so it’s important to identify and protect you and your business’s intellectual property. Here are the main categories and protections for your company’s creations. Trade Secrets A trade secret is any useful piece of information that the public doesn’t know about and the owner has taken steps to protect. If you have taken the steps necessary to protect your own trade practices, you may have a case if you ever discover your trade secret has been leaked. Having your employees sign a nondisclosure agreement (NDA) is a great way to initially establish your unique business practices as trade secrets. Trademarks The name of your business, product, or service — anything a customer uses to identify a product — generally requires a trademark. This may include your company’s name, product name, etc. Think of the distinctive Nike “Swoosh” and the familiar ending sound of Dell’s commercials. To properly protect your trademark, file a trademark application to have it registered. Copyrights Most people seek protection under copyright law for a variety of things related to their product or business, like images, specific words on packaging, labeling, the actual product, and the business webpage. The best thing about copyright registration is that it’s The Science Behind ‘Putting Your Mind to It’
inexpensive. Plus, the law allows you to demand attorney fees from those who infringe on your copyright. Patents Patents are a fantastic way to protect your designs, and companies have utilized patents to maintain their competitive advantage. A great example of this strategy is when Sony Pictures patented their animation style for “Spider-Man: Into the Spider Verse” which grossed over $375,502,565. There are two types of patents: one for utility (function) and one for design (aesthetic). To apply for a patent, register with the United States Patent Office. Regardless of the type of intellectual property you have, it’s important you identify what type it is and which type of protection is most appropriate. Even a small amount of intellectual property is worth protecting, so start the process now to safeguard it.
Those with a growth mindset, however, see failures as learning opportunities. This mindset leads to a passion for learning, and research shows that maintaining this mindset leads to personal growth. You don’t have to settle with what you’re given. You may have innate talents, but they can be developed and improved with time and effort. The good news for people with fixed mindsets is it’s possible to rewire your thinking toward a growth mindset. A big part of doing this is understanding what talents and intelligence you have and acknowledging your weaknesses. But beyond that, how do you best learn new skills and take in new information? What if you started seeing every challenge as an opportunity? Everyone can grow and improve. Sometimes all it takes is a change in perception.
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WORD SEARCH Take a Break! August Word Search
A Tale of Taking Action WHEN SHOULD YOU GET STARTED
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There was a man who had just retired from his job and hosted a huge retirement party to celebrate. At the party, when his friends asked him about his retirement plans, he said he wanted to travel more with his wife, play golf, and spend time with his grandchildren. They all nodded in agreement and commended his plans. The man and his friends get together about a year later. They asked him about how he was enjoying his retirement. He excitedly began by saying that he and his wife had been traveling all over the country, and they had also been to Mexico and Canada, not to mention the big trip to Europe they had planned. He also said he had been playing lots of golf and shaved five strokes off his golf game. But, with a twinge of regret in his eye, the man told his friends there is really only one thing he set out to do as a part of his retirement that he hadn’t been able to do: play with his grandchildren. When his friends asked why, he replied that he doesn’t actually have any grandchildren. They asked him why not, and he said he doesn’t really know. His three adult children are all happily married and perfectly healthy. Soon after meeting with his friends, the man hatched a plan to get some grandchildren. When all his children were at his house around the dinner table on Thanksgiving Day, he said, “Before I say the blessing, I have one quick announcement: Today I opened up a $100,000 trust fund in the name of my very first grandchild. Now, let’s bow your heads.” He said that blessing, and when he looked up, it was just he and his wife standing there.
AUGUST BACK CHILDREN CHILLY
COOL END FALL LEAVES
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SUDOKU (SOLUTION ON PG. 4)
So, what’s the moral here? Well, if you’re going to get started on something, the best time to start is right now!
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INSIDE P.O. Box 810 Effingham, IL 62401 1 2 Niches Lead to Riches Types of Intellectual Property
Sudoku Solution
The Science Behind ‘Putting Your Mind to It’
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The Best Time to Start
Take a Break
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Get the Most out of BTS Season
A s you load up the family for some final school supplies, your main focus might be finding the best place to position your lawn chair around the campfire for optimal marshmallow roasting! But the back-to-school season is coming up, and families need to begin the expensive task of purchasing items for school. According to the National Retail Foundation, back-to-school shopping contributes to 17% of total annual sales. That’s a nearly $76 billion industry that your business could be cashing in on. However, when you only offer a special or sale because of a particular season, you are not tapping into the full capacity of the market. You need to make the offer something people actually want or need, be it chiropractic adjustments for kids carrying too many books or discounts on vehicle services for carpooling families. For example, if you sell and service computers, you must do more than offer 10% off all technology services for the back-to-school season. Provide summertime adventures, preparing for the upcoming school year is likely one of the last things on your mind. Instead of shopping for
a sale on installing and updating programs for students or provide a gift with the purchase of a laptop for college students on the go. This makes your offer more appealing to your customer base, which will guarantee you happy and returning customers. There’s also a key demographic in the back-to- school market that often gets forgotten: teachers. Thousands of dedicated teachers across the U.S. have a classroom budget, and some must dip into their bank accounts to keep their classrooms stocked. Offering “thank-you” discounts and sales for teachers will bring more business through your door and help you support your community. Teachers can also serve as a direct marketing tool for your business. Whether it’s via mailers or in- person during open house nights, August is full of teacher-to-parent communication that could include coupons or recommendations to your business. The back-to-school season isn’t just for the big- box stores or retail providers. You can tap into this powerful market and make this last summer stretch a lucrative business season.
School’s Back!
Tap Into the Back-to-School Season
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