Small business owner needs info.

Re: Small business owner needs info.

Welcome to the forum I hope you will find your answer here

Re: Small business owner needs info.

Guilty feelings are a good thing, if they are based in reality. But they are not so good, and sometimes very bad when it comes to business. I once bought a domain name from someone and sold it 7 months later for $1,000 and I was very happy and not guilty at all. Was the buyer a small business owner that needed the domain and had a limited budget? No, it was a large German telecom company. If the buyer had been a small business, I probably would have taken the first offer of $450, since that was a nice profit. But I didn't know who the buyer was and countered back with what I felt the domain was worth at current values. My counter of $1,000 resulted in a quick sale, and when I found out who the buyer was, I realized that I may have been able to get much more for the domain. $2,000 or $5,000 may have been possible. It's up to each person on how to deal with feelings of guilt, but it really doesn't have much place in honest business. If the customer does not think the price is right, they will remove any reason to have guilt.

Now in your case, you are in a risky situation. Your business (and perhaps you) have something that is keeping your clients loyal, despite having a competitor that only charges 1/3 as much as you do. So this is what I think, from what you have told us:

You need to understand WHY your customers have not left you. Once you learn this you may not need to feel any guilt at all. You might be able to raise your prices, but that is not likely. Based on what you find out I recommend one or more of the following:

- Lower your prices. If you can afford to make less profit, then this will lessen some of the reasons for your customers to leave. They may be loyal now, but what if the economy gets worse and people have less money? If price is involved, your business could change quickly if people can't afford to pay as much.

- Keep your prices, but find ways to give your customer more value. Do things to surprise your customers in a good way, and they will not only thank you, but tell others about you. Here are some ideas:

From time to time have a small dish of cookies or treats at the checkout and let your customers take one as they leave.

Pick one random number every day, like 17. When your 17th customer checks out, sound a horn and announce that what they are buying is free, or 50% off.

Make a display of video titles of a certain kind, or perhaps one of titles that are not rented often. If they are not rented often, they are not making you much money. Offer to rent these videos for a small amount of money either with a coupon or just a sign. You won't make much on the rentals, but you will make something. If you use a coupon, you give the sense of added value to your business.

If you are not doing much to "tie together" your espresso shop, you should. Do you have movies playing in the espresso shop? Do you offer coupons at each store? Do you have a movie discussion group that meets at the espresso shop to talk about movies? Members could get a rental discount once a month. Does your espresso shop sell food items that people like to eat when watching movies? Does your espresso shop paper cups and bags list your movie rental business? And is your espresso shop mentioned on your video rental boxes?

- Talk to your distributors that sell videos. Tell them that you need to give your clients extra value to maintain your business. Ask them if there are any special deals or offers that they can provide? They may have samples they can give you or sell cheaply or other things that can help you to provide more to your clients.

If your distributors can't or won't help you, use Google or another search engine and start looking for others that are less expensive or have other benefits. Consider talking to other rental places in your city. If two or more of you work together, you may be able to buy in larger quantities and get better prices. But be very careful of who you work with...!

Another idea is to find local video producers and see if they can provide copies of what they create. The quality of the videos may not be so good, but the cost will be low or nothing and customers may like them. If you rent them at a discount the producers may just give them to you. If you feature some of these and they are rented, you could have an event at your expresso shop where people could come to meet the producers of videos they like...! 🙂

- Ask your clients for feedback. Have cards they can write on or a form on your web site. Ask your clients what they want and if they are happy? Get to know your clients by name if you can. Make some small talk, ask them about the movies they are renting or have seen.

You are very luck to have not one, but two businesses that are close together and can work to reinforce each other. I hope some of these ideas are helpful. 🙂