Trust me. You can learn about innovation and the business model of any type of company , regardless of its size or location.
A few months ago I wanted to talk to you about this real example of a small neighborhood store that opened a little over a year ago, and that is having an overwhelming success in your municipality. And the best thing is that its owner is very young, which is very hopeful.
A History Of Innovation And Business Model
I put you in situation.
The story of innovation and business model that I am going to tell you is from a retail business, specifically a neighborhood grocery store, with no more than 100 m2 of surface area.
This business is located in a town with about 20,000 inhabitants, with a medium-low purchasing power, whose economic activities are mainly commerce and agriculture
The capital is more than 30 km away. away, so its inhabitants, especially the oldest population, are accustomed to local commerce and family time. Everyone knows each other and the setting is very traditional.
In this environment, our entrepreneur, let’s call him Juan, decides to set up a neighborhood supermarket to serve his potential customers, in a neighborhood where there is already a similar business that has been operating for more than 10 years. Juan comes from a family business, which he cannot stop attending because his father is retiring soon, specializing in meats and sausages.
What Did Juan Do?
As I have already told you, Juan had the idea of setting up a supermarket, taking advantage of his experience in the family business and to also sell the product in another location.
He noted that there was already one, but he detected a niche in the market, a gap to sneak through . So that innovation and business model is not only applicable to large companies, nor is it about inventing great artifices.
What Juan saw is that the nearby stores closed at noon, when many people come from the capital to eat at home. The same thing happened in the afternoon, which closed at 21:00 at the latest. He also realized that the stores run by Asians did not close, their hours were longer, but the clientele did not trust them very much. For all this he decided to open his store from 8 in the morning to 12 at night, including weekends and holidays.
Today, Juan has 4 people employed in 3 shifts, he continues to attend the family business and has not even finished his high school studies.
It seems that studying kills creativity , and influences innovation and business model.
How Can You Implement It In Your Business?
Sometimes those of us in professional services get stuck because we want to be so innovative or develop services so perfect that we don’t move forward .
That’s why I admire Juan’s simplicity when considering creating his new business in a small, saturated market, and one that tends to go by price… Does that ring a bell?
So I have done an analysis to be able to replicate this success story in several steps.
1. Talk To Your Customers And Be Observant
Juan took advantage of the family business to collect information, such as that other stores were open for longer and that customers did not trust much.
If you’re going to go it alone or develop a new service, talk to your customers and look at your market . Read magazines in your sector, look for success stories, talk to customers from the competition, etc.
2. Keep An Eye On Your Competition And Look For The Gap
Despite the fact that in his municipality there were already similar businesses for his market, Juan looked for a hole in which to sneak in. He took advantage of an underserved market to position himself.
I already told you in the previous point. Look for the weakness of your competitors and turn it into your strength .
To do this, apart from listening, I recommend you carry out a SWOT analysis .
3. Design Your Product Or Service Based On Innovation And Business Model
Juan wanted to sell the products of the family business, which, if you remember, specialized in meats and sausages. Starting from that base, listening to his clients and observing his competition, he set up his new business. He was consistent at all times with the process.
You do the same.
4. Advertise In The Right Media
In the municipality where Juan lives, it is very common for a car to come out with a loudspeaker announcing the most relevant events for his community. Word of mouth also works very well. For this reason, Juan contracted the advertising service for the car, and invited the clients of the family business to the inauguration. He also advertises in his father’s business.
If your clients are on social networks, attend fairs or events, belong to a professional association or college, find a way to approach them to advertise your services .
At first, Juan wanted to open the store 24 hours a day, but he soon realized that it was oversizing the business. He wasn’t going to get an adequate return on the resources he had to deploy. So what he did was propose a schedule, which he adapted in the first few months based on demand, and thus also provided the business with adequate personnel and shifts.
The same thing happens with services. Start with something minimal and then go adapting to what they ask of you . Or what is the same: develop the minimum viable product .
6. Start With A “Hook Product”
In Juan’s town no one made fresh bread on weekends, nor in the afternoons either, so he invested in an oven to make bread that comes frozen.
People who return from work at the time that other businesses are closed (midday and late-night) usually stop by to pick up freshly baked bread for lunch or dinner. And for a very competitive price. This attracts a large flow of customers to your establishment, who often end up buying something else.
It is also common on football afternoons to see people queuing to buy bread, cold cuts, popcorn and snacks, soft drinks, etc… By the way, they attend very quickly, so no one misses a minute of the match…
Design a service that acts as a hook , in a way that allows you to get closer to your client, show how good you are and earn their trust, and sell them something else.
And the best way to start this chain is to offer a free resource that helps your client solve a very specific problem. It is what is called lead magnet and I recommend you to design it NOW.
And these are the lessons on innovation and business model that you can learn from an entrepreneur and his local business.
Your turn. Are you going to apply Juan’s “tactics” to your online project? Let’s go to the comments!