Business Killer 4: Non-traditional Competitors Cont'd
Posted by Ryan Volberg at October 10, 2007 2:15 PM
Are the products you sell now available in non-traditional stores?
This week we’ll take a look at a situation where your competition comes from just outside of your industry as in the case of Agnes.
Agnes owns a neighborhood favorite restaurant. Until recently, she was the only restaurant within 20 minutes to offer traditional food from her home country. Now she finds herself competing with a local grocery store that has brought in a selection of high quality fresh entrees. To make matters worse, a meal preparation concept that allows customers to make their food for an entire month has opened nearby and seems to be siphoning off some of her more frequent customers.
At first Agnes ignored the issue. She simply continued to run her business in the hope that it wouldn’t affect her. Over the next two months, she posted her first declines in year over year sales since she’d been open.
Then she became angry. She was angry that city council had allowed a large grocery store to be built that they knew would take away her business. And she was angry that they also allowed another strip mall to be built. Obviously, there wasn’t enough business for everyone. Most of all, she was angry with her supposedly “loyal” customers who were now abandoning her in favor of these new options.
When her sales continued to slide, she began to run 2-for-1 coupons in the local newspaper. She started to use Val-Pak coupons as well. Once, she wasn’t careful in her proofreading and simply offered “Free Appetizers” with no-strings-attached. She’d meant to offer it in conjunction with a meal. She thought that it would mean bankruptcy with all of the customers coming in to redeem these coupons by the stack. Even worse, she barely got a reaction from them, redeeming only 12 coupons.
As she considered her fate, she thought about selling the business or maybe just closing it down. She even consulted with a business broker to get a valuation on it. Her declining sales base created some concerns on the part of the broker. She decided to postpone her decision.
She asked herself a hard question. “Do I want to walk away from a business that I spent 15 years building?”
She pondered her situation over the course of the week. One morning, as she was jogging on the treadmill, she had a moment of extreme clarity. What if she were to turn all of her energy that she was spending on being angry and silly promotions and really look at what was wrong with her business – and what was right?
Stay tuned for next week when Agnes will begin to take action.
Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring retail and restaurant success.
 Category: Survival Tips Story of Agnes the Restaurateur
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