Having a “power lunch” merchant style
One of the benefits of owning a small business that has several employees is that of being able to enjoy an occasional long lunch. A long lunch, however, can also be one of the most profitable experiences that you can have, if you decide to enjoy the meal with another small business owner. The other owner does not necessarily need to own the same type of business, for there are many commonalities shared among all small businesses. You may find an owner that would be interested in developing such a relationship within your immediate trade area, or as was the case of the small business owner that was interviewed for this article, his lunch buddy was in a nearby town.
In this scenario, the two businesses sold similar products and services. Bill, the business owner, explained that the two owners took turns as to who was the host, and who was the guest. Each made a habit of arriving early, and undoubtedly would find the other busy with a customer or office paperwork; lunches never started on time. In addition to taking a self-guided tour of the other’s business, they took notes as they asked the other to point out new items and product lines that had been added, and had shown signs of success.
During one of their most recent luncheons, they discussed the many benefits they had each reaped because of their get-togethers. Bill also mentioned the many telephone conversations they had, as each would ask each other to provide a fresh viewpoint to areas of concern. Both owners had similar experiences with other local and out of town dealers. The results were almost always the same: conversations that had been of benefit to all.
There was also a thread of commonality among these dealers. The participants in these informal get-togethers always tried to attend as many of the schools and merchandise shows that were available through manufacturers, associations, and suppliers. While at these gatherings, they were all looking for new opportunities. They knew that they had to make themselves visible at these events, so that they could ask vendors that they were interested in, to visit their businesses. Of course, there were vendors that did not make sales calls, making the trade show all the more important.
In addition to these activities, Bill mentioned that whenever he was near another business, even while on vacation, he carried a pen and note pad to look for new items, product lines, or vendors. It was not surprising to find that most business owners would welcome a fellow owner into their business. And most would gladly give information when asked. It is almost the same reaction when asking a grandparent about their grandchildren. The conversation begins to flow, and therein lies the mutual exchange of information.
The information that he gained from the experiences of another business helped to guide Bill in selecting several manufacturers' lines that were not sold in the chain stores. Bill also shared with the other owner, items that his friend would have to watch his prices on, and which items would allow a dealer a larger margin so as to make a manufacturer into a profitable choice.
With some of the items which were no longer his exclusively, Bill had to review his margins, and revise them downward as many of these chain stores were of the type which traditionally offered little customer service, narrow product selection, and lower margins. Bill also had experiences where he narrowed his product selection, or eliminated a line completely.
These are all examples of where the idea of consulting with another owner comes into the picture. It was once said that you profit most from your mistakes, but Bill found that frequently he could profit more by taking advantage of another owner's experiences.
The fact that Bill's favorite lunch partner was out of his immediate trading area was immaterial to him. He had received and given assistance with businesses that were drawing from the same customer base that he was. Of course, as they were competitors, they had several areas, prices for example, that they did not discuss.
All business owners have had experiences that another owner can benefit from. In addition to speaking of the positive points of your business, you can caution each other of potential problems. Some of the common bad experiences that Bill had shared were product lines that had poor packaging, manufacturers that did not provide the discounts as promised, or dating on orders that was not given. And, he and his lunch partner had cautioned each other about salesmen that did poor work in building displays, or representatives that gave bigger discounts when additional pressure was applied.
Consultation with other businesses can be very uplifting. The common thread that you will find in these owners is that they are successful in many areas of their business. Finding these people in your immediate area will be easy, because customers and salesmen are eager to point them out. You will find these owners from other towns at various events. Whether at a seminar, a trade show or a trade association meeting, the results will usually be the same.
These owners have not joined the association, attended shows or seminars because they are successful and have the time to be away from their business, but they are successful because they take the time to attend these events or visit another person’s business. Hopefully, you want to work towards being a member of that group.