Thinking big: how to penetrate a national market
Karl R. LaPan, President & CEO, The NIIC
Photo by Shutterstock
Many of Fort Wayne’s home-grown success stories started small, with a local or regional account base. Take Sweetwater Sound, for example. Founder Chuck Surack set up shop out of a bus. Their website captures this incredible success story when it observes, “Back in 1979, Chuck Surack had a 4-track recording studio in the back of his VW bus. He’d record bands in local clubs, then take the tapes back to his home to mix and master them. Like every musician and studio owner, Chuck was always looking for new and better gear.”
Decades later, and despite significant changes in the marketplace and technology, he has not veered from that goal, and it has served him well. Today, his company is considered a leading retailer of music/pro audio equipment on a global level with unparalleled customer support and raving fans everywhere.
How can your business scale to become a player in the national marketplace? The following steps are essential:
Select “best of breed” suppliers
Competing nationally and/or globally requires next-level partners, processes and tools. Unless you’re willing to place a monster of an order, beware that national suppliers may not be interested in doing business. Talk about a chicken-and-egg problem!
That’s why, as an emerging firm, your procurement strategy should focus on strength in numbers. Join forces with other local companies before submitting your order. This is a way for national suppliers to take you seriously and help build a relationship that could take your venture to the next level. You might also distinguish yourself by sharing with the national supplier your venture’s roadmap, and how you plan to grow and build into a significant venture so they can see the potential. This approach might cause them to buy into your plans and support your business accordingly.
Leverage data into strategic decision-making
Businesses of all sizes and stripes stand to benefit from data mining. For example, if you own a kennel, can you track local trends related to travel? Are there weeks during the year where people with pets go out of town (spring break, summer vacation, holiday) and therefore might need your services? What weeks tend to be slow? With this data in your arsenal, you can target prospects and customers to drum up business during those quiet times. I am also fascinated by the demand driven pricing of airlines. Delta does this extremely well – selling some tickets at a really low rate and then selling additional seats at a higher rate followed by more seats at an even higher rate. Also, why is it prices go down on Tuesday but might go up on Friday when more people might be planning their trip?
Curb labor costs
Full-time talent comes with a price, and related expenses tend to add up fast. Lean on independent contractors whenever possible, especially for ad hoc projects or temporary increases in demand. By going this route, you can stretch your dollar and transfer the full burden of labor-related costs to your outside provider — payroll taxes, unemployment insurance, workers’ compensation, pensions, sick days, health insurance, or vacation time all add up.
As an entrepreneur looking to scale, a flexible workforce on the labor front means you can invest resources in other areas that might deliver more of an ROI.
Play to your strengths
Many view national brands as giants because they have the resources at their disposal to take more risks. However, startups have something in their back pocket that more prominent firms don’t. It’s the ability to innovate. A younger company is often nimbler and therefore can change processes and course faster than a larger and more established corporation. Simply put, startups are hungrier.
It’s the leader, stupid
An excellent article in the Harvard Business Review (December 2002) on Why Entrepreneurs Don’t Scale makes the leadership difference in scaling crystal clear. In the article, Jon Hamm stated, “But entrepreneurs who grow into leaders almost always scale because they are open to learning. They want to be molded by new experiences and to improve their leadership selves. In fact, leaders who scale do so regardless of background, skill, and talent. Rather, they scale because they take deliberate steps to confront their shortcomings and become the leaders their organizations need them to be. Instead of floundering, they learn to fly.”
The bottom line: The national stage is only so big. However, to get bigger, you have to think big and execute small.