“Life is all about timing… the unreachable becomes reachable, the unavailable become available, the unattainable… attainable. Have the patience, wait it out. It’s all about timing.”
- Stacey Charter

A recent Harvard Business Review article called Why Small Businesses Will Win in this Economy shows that  small businesses are getting deals that they never had before. Writer Peter Bregman says:

Small companies with low overhead, reliable owners, a small number of committed employees, personal client relationships, and sustainable business models that drive a reasonable profit are the great opportunity of our time.Small is the new big. Sustainable is the new growth. Trust is the new competitive advantage.

And from what I am seeing in the marketplace, it is true. Here are 5 main reasons why I think that Small Businesses are going to win in this economy:

1. Democratizing technology. We have Twitter, Facebook, Google ads, e-mail etc. One talented creative can create a huge looking brand presence. Everyone has Microsoft Outlook, Word, Excel etc. Think of today compared to the Mad Men days of Advertising – the barrier to entry has shifted down significantly.
2. Larger networks. You don’t have to be a large company anymore to access a cluster of great thinkers. With social networks like Facebook and LinkedIn, and expanded professional networks through online forums etc. we can access a larger network of people to consult and team up on for new business ventures.
3. Declining trust in big. Seeing major banks and companies like GM and Chrysler fail, makes people doubt the automatic trust they have for big business.
4. Lower costs. With the recession, both labour and capital costs are declining. This is making it easier for small businesses to get resources that they may not have dreamed of before.
5. New ideas welcome. With the tanking of the economy, many people are looking at the way that they are living and wanting change. This ranges from personal finance to being more environmentally responsible. That hunger for change can create a great opportunity for creative entrepreneurs.

It is an exciting time to be a small business, for those of us who are brave enough to seize the opportunity.

As a kid, I loved the “Choose Your Own Adventure” books. I found it interesting that depending on how you chose to read the book, it would turn out with a different ending. There were usually some endings that were more “winning” than “losing”. At first reading, I would always try to figure out what type of “moves” in the books would lead me to the best outcome.

The love for those books prepared me well for getting the right prospects for clients, because the way that you go through the process of Marketing and Selling can determine whether you are a “winner” or a “loser” in your business.

Scenario: Mike has a $150 out-of-the-box software package that helps consultants with their time tracking. Prospective Consultants could be from a wide variety of industries and geographies. Mike has one very experienced sales executive. Other than that, he does not have a large staff, but he hopes to build one in the future as the business grows.

Choice 1: Sales or Marketing?

Sales and Marketing often report to the same people or department. Although there are many war stories of Marketers who have hated reporting to clueless Sales bosses, or Salespeople who have hated reporting to head-in-the-clouds Marketing bosses, since they don’t understand each other, I think that it is pretty clear that we are doing the same thing: bringing in new business.

Sales is more “custom” and marketing as more mass appeal. Although there are many ways to customize marketing with geotargeting and demographically targeted messages, there is really nothing that beats having a live person talking to another live person. For example, custom vertical market software packages with a 40K + price tag will likely need more sales, since there are probably very few people that would go through some customized pre-built software wizard where the options would be so endless as to make it not worthwhile to build.  Given that the nature of the product is out-of-the-box, it seems that Mike should opt for Marketing.

Sales is better for a known market. If Mike’s software was for hospitals in Canada for example, doing a broad-based campaign does not make sense, since it is known that there are about 600 hospitals in Canada and the prospects within them are known on many lists.  Since the market is unknown and international, Mike should go for Marketing. However, he should have people on-hand to do phone sales where necessary.

Choice: Marketing

Choice 2: Search or Direct Marketing?

Online campaigns are effective for many products or services. Typically, I use online marketing campaigns for a market of unknown targets. It can be useful for markets with known targets, since sometimes it is not the person within the organization that you think it is doing the primary research. For example, a low-level clerk can be doing preliminary research for a buy decision, and could leave your company out if you are not reaching them through sales channels, but I use this as a secondary tactic only. Since the targets are unknown, I would lean towards search.

Although search is king when it comes to online marketing, it does not always get the best quality prospects. Prospects that are known to you, such as old customers that are on an opt-in list, will be much more loyal. Prospects found through search are ones who are thinking of you as a contestant among a long line of people, rather than thinking of you and only you. For example, you line up Hollywood’s hottest actors, and you compare and measure their features against each other. But if any of those actors walked into your local coffee shop, he would quickly become the centre of the room. Since Mike does not have an opt-in list, and has few connections in the industry, I think search marketing is appropriate.

Choice: Search Marketing

Choice 3: Qualify or Don’t Qualify?
I have already mentioned that search prospects are lower quality than those who are known to you. The question of qualifying the leads or not is a good one. Because of the potential quality issue, I would say that Mike should qualify.

Forms are often intimidating to users, and lead to sharp drop-off. Like many in the industry, I tend to shy away from them. Instead of large forms, use simple ones that collect little information. If there is a large volume of filled-in forms, I will suggest getting a more junior person to qualify them. If this is an intimidating prospect, it is always possible to get a work-from-home lead qualifier who will do it part time, or some companies source this abroad (I am not against this in principle, but I have simply never seen it done with success).

Having a qualifier is also good if there are more high-quality salespeople. If they are wasting their time on leads that are not worthwhile, they won’t have time to use their sales skills. Since Mike’s salesperson is very experienced, I would lean towards having a qualifier.

Choice: Qualify

I don’t have all the “choose your own adventure” options here, so you can’t see what the “losers” ended up with. But, I hopefully this adventure will help elucidate your adventure.

That’s a quote from strategy guru Michael Porter of Harvard’s famed business school, one I think makes a lot of sense.

In my first year as a marketing consultant, I found that the biggest challenge I faced is that many clients resisted committing to a brand. Instead, they wanted to be everything to everybody. I understand the thinking – it’s an attempt to cast a wide net. But actually, if you try to speak to everybody, you end up appealing to no one.

Another scenario I came across more than once was a client who wanted to emulate the strategy of a competitor. Or a competitor might pursue something else, and my client will want to follow suit.

The honest truth is this: one of the worst paths to follow as a business is to battle with a competitor on their ground. For example, if you’re a hotel, you can’t emulate the strategy of the Four Seasons in some elements and the Holiday Inn in others. These are two very different extremes. If you are trying to be both, you are probably neither. There is no advantage in being average. Instead, focus on your own company’s strengths within the right industry, regardless of what the competition is doing.

When you’re doing something the same as the other guys, it’s called “destructive competition” because it leaves to escalation with lower prices and higher costs, unless one of the competitors happens to be incompetent.

Many companies focus on being “the best in their industry,” but the question is, what does that mean? “What is the best car?” Mr. Porter asks. “It depends on who is using it. It depends on what it’s being used for. It depends on the budget.”

The best solution is to focus on what you can be good at, and do it very well. For example, Porter Airlines, a commercial airline flying between major city centers, chooses to do so from the Toronto Island Airport, which is far smaller than the city’s Pearson International Airport, but which is located five minutes from downtown – unlike Pearson, which can be as much as an hour away from downtown if the traffic’s bad.

Porter is taking advantage of the preference of its customers for convenience, the airline has avoided the kinds of price wars that created other airline “wrecks” such as Roots Air, Jetsgo and Canada 3000.

Large companies have integrated this approach into their business models. For example, when Microsoft released the original Xbox, they created a brand that distanced itself from the Office productivity suite and the Windows operating systems. They knew that a gaming console would not be able to leverage from their existing brand, so they created something entirely new.

So if you’re sitting at your desk, trying to figure out what to do about the current economic climate, maybe you should determine what not to do as well.