Why Do Businesses Fail?
A micro independent business in my area closed. It wasn’t a pet industry business; it was a little frozen yogurt shop. However, whenever a micro independent closes, I want to know what happened. Was it poorly run, was it in the wrong area, or was it a combination of the many things that can affect a micro independent business?
While the frozen yogurt fad might have peaked where I live, this independent had survived long after those colorful franchises were all melted and gone. I would love to be part of a roundtable discussion with the leading experts in business and analyze why a particular business failed. My guess is I would look at completely different things than the other experts. I’m sure the experts would look at things such as business cycles, inventory management, cash flow and marketing, while I would look at customer engagement, passion, knowledge and flexibility.
It doesn’t matter if I’m buying a cup of yogurt or a pair of shoes: I want to buy from an expert. If I’m buying a pair of shoes, I want the salesperson to know everything about the shoe I’m buying. I want them to know it’s a quality product, made in a decent place and that it’s going to fit my needs perfectly. I don’t necessarily need to know all of this information, but I want the seller to know it all. Most of the time I don’t even know what I want to know about a product—I learn that by listening to the expert.
I didn’t know that yogurt stores can be a burden on the environment. The traditional yogurt machine can cause hundreds of thousands of gallons of fresh water to be wasted each year. Then there is all the waste going into the landfills from the plastic spoons and cups. I also didn’t know about the different mixes that go into the frozen yogurt machine. A lot of shops buy the mixes from the same distributor, and some of those can be loaded with ingredients most people would want to avoid if they knew they were in there. I learned all of this and more from talking with a frozen yogurt shop owner. I then found myself using that information to judge new yogurt shops I visited.
Knowing the product inside and out is still only a piece of the puzzle in making a successful business. There also has to be a connection between the owner of the business and the customer. Customers who love to shop small and local want to know they are supporting someone working hard to have a store and that their dollars are staying in the community. That’s why it’s very important for micro independents to tell their story to their customers. The story should include information about them personally.
When posting on social media sites, don’t just post about your product or your store. Post about something interesting you did over the weekend or post about a positive experience you had at a store in your neighborhood. Those are the things that connect you to your customers beyond the traditional “business relationship.” Telling a story about your dog getting into the trash or talking about how the dry cleaner went above and beyond to get a stain out are things that make your customers feel like they’re your friends. Nothing feels better than spending money at your friend’s store.
Having a great customer connection can also help with what I think is one of the most important things for a micro independent, and that’s flexibility. If a micro independent sees their customer is shifting away from the main product they offer, they need to be flexible enough to change course. If frozen yogurt is losing popularity, then maybe the firm could have offered bakery items, or a coffee shop. If a business has built that connection with its customer, the customer will be happy to come try a cup of coffee from that store, especially when they learn that they are sourcing the beans in a very specific way and only offering the product in a biodegradable cup.
I don’t have the same products or services I started my store with. I have evolved, products have evolved and my customers have evolved, but our story has remained—we want pets to live long and healthy lives.
There is not one secret as to why a business succeeds or fails, but the customer connection definitely tops the list for the micro independent.
B.C. Henschen, a certified pet care technician and an accredited pet trainer, is a partner in Platinum paws, a full-service pet salon and premium pet food store in Carmel, Ind. His knowledge of the pet food industry makes Platinum Paws the go-to store for pet owners who want more for their pet than a bag off a shelf.