Successful local businesses network. Some are natural networks of suppliers, for example. Other networks succeed because local businesses promote each other.
Sometimes businesses collaborate and form partnerships. These might be temporary, perhaps for a particular project, eg where a particularly challenging client needs co-ordinated support from more than one business. Or businesses might market a particular service jointly. Sometimes two or more local businesses form a partnership business and work together for the long haul.
Other partnerships resource businesses in a local area. So, for example, a group of otherwise unrelated traders might hire, refurbish and manage a building together.
Despite media rhetoric, businesses rarely compete. Most understand their success depends upon the success of others. Building relationships often unearths new possibilities for collaboration.
There are aggressive people who get their kicks from competition with others. They may claim to be successful but upon analysis their business will depend on others in dozens of ways. The competitive mindset is rarely effective, particularly into the long-term. People need to know, like and trust the people they do business with and fear does not help!
The idea of the niche might help us understand partners and allies. It comes from biology and shows how organisms adapt to their environment. What do you need to be successful in your niche?
- Location is crucial. There is probably a limit to the number of cupcake makers the City of Sheffield can support. But it is likely several cupcake businesses can be sustained across the city. Cupcakes are perishable and need to be transported. This places limitations on their business reach.
- Unique products. If you want cupcakes you can go to your local supermarket for manufactured cupcakes. But if you want something special, where do you go?
- Environment created by other businesses. If you have capacity, you can supply bakeries, cafes and restaurants with cupcakes.
- Diversification – can your skills be transferred to other products? I heard recently of a wedding cake business who makes 6 cakes a year to break even. Presumably, a cupcake maker could graduate to celebration cakes and wedding cakes. Other cupcake makers have opened their own cafes or offer lessons in cake decoration.
All these require you to pay attention to other businesses in your locality. Asking for help, listening to potential customers or other traders who will help you find your niche. You may know what you want to do, eg cupcakes, but you need to know how your place sets the agenda. If people want celebration cakes, you may need to adjust your activities. The person who makes 6 wedding cakes a year, however, will have plenty of time to do other things. They have a niche where they can make a living through relatively little effort. The customer is not interested in how much time it takes to make and ice a cake – they care about the contribution the cake makes to their wedding.
Your place sets your agenda; an agenda dominated by its local businesses. So, your business relationships, your partners and allies, are not an afterthought, they are at the core of any local businesses’ practice.
This post is a part of the series based on the circuit questionnaire, the element about branding.