Proximity businesses can still take great advantage of their location, despite the e-commerce boom and outsourced delivery. For that they must focus on good quality, adequate attention and adaptation to the client. And add the digital tools that allow them to attract new consumers. three cases.

In full explosion of geolocation, of colorful bicycles with fast delivery and e-commerce, the neighborhood business resists. And not only resist, but it is renewed. What are the keys to local businesses? What are neighborhood stores doing to survive, even in this recessionary context? How do they feed on virtual tools? And finally, what are the mistakes they should avoid if they want to grow smoothly?

critical factors

Mariano Mileo is a professor at IAE and a specialist in small and medium-sized firms. Postulates to start with realism regarding the possibilities of a new business to access the best locations in a neighborhood, “which are usually beyond the economic reach of a recent entrepreneur”. Before falling into frustration, However, emphasizes that the entrepreneur “should establish the real importance of the location for the business he wants to start. Because that way you will allocate only the necessary resources to that objective, and will allocate efforts to the variables that will make the business stand out and sustainable: personal, setting of the premises, product variety, stocks, low prices, equipment, distribution, and so on".

More conceptually, Mileo stresses the danger of losing sight of the essential: “Day to day life makes the entrepreneur forget what the critical success factors were (FCE) that you surely evaluated when starting your entrepreneurial engine. These CSFs are, As minimum, three or four components of the business model that make it sustainable, and that must be worked and strengthened daily. Said in a more colloquial way, are those issues where we 'can't stumble' as a company. Getting the job done right on each of those FCEs causes the effect we need to capture, retain and keep our target customer satisfied”, Explain.

Whose, where, how many

From the DINKA consultancy, especializada en SMEs, Delfina Pérès Copello emphasizes the importance of having very well identified the customer segment to which it will target from a given location, though that's just the beginning. “It is not enough just to know who are the ones who are going to buy from us, but also analyze their behavior, identify where they are and estimate what the volume or traffic of people will be. Another consideration may be the proximity of businesses with complementary products and with a target similar to ours., so as to be able to leverage on them and thus capture that influx of consumers, which is also our target market”, says.

Pérès Copello strongly advises going down to earth with concrete numbers. It aims to first determine the calculation of the necessary traffic, so that the business can initially match income and expenses, and then start generating profit: “We recommend taking into account the structure of fixed and direct costs, in order to determine the break-even point of the business, namely, that billing necessary per month to be able to face and cover all expenses and thus not have losses ".

The expert immediately proposes a numerical example, and thus manage to establish the income floor necessary to maintain the basic balance: “If a business has to cover expenses for $100.000, and an average ticket of $250, then they have to specify at least 400 monthly sales, namely 20 daily sales (calculating an average of 20 days the store is open each month). Then, if the business is open eight hours per day, the daily goal should translate to a range of two to three sales per hour”. However, Not everyone who enters the store is going to make a purchase., so at least they have to enter 10 people per hour, according to the criteria of Pérès Copello, for him to enter 20% and the 30% of those who enter make a consumption. Then comes the moment of verification.: Is such a goal of entrants being reached in the local, day after day, hour after hour, in order to cover at least the expenses of the operation?

Tools

The DINKA consultancy emphasizes on focusing first on the needs of the client, “to then offer you a value proposition that is different from other alternatives. Once these points have been identified, you should work on the shopping experience, a key aspect in consumer decision making”. This approach, says, will generate a differential value, which will allow at the same time to attract customers who until now chose other alternatives, in addition to retaining and retaining their own.

Mileo, del IAE, among the classics 4 P of marketing (price, product, point of sale and advertising), puts the accent on the last leg when it comes to neighborhood businesses: "If we stop at the 'P' of Advertising, and trying to be very efficient in the cost-benefit equation to get a new client, it is clear that the option does not go through the graph, the events much less the TV. In these types of companies, social networks are THE channel, but it requires two key aspects: creativity to achieve post impact, and a specialist who guides in how, when and where to publish at the most reasonable cost. And where you can not fail is to appear on Google Maps, something that seems very basic. However, there are businesses that fail in this plane”, warns the specialist.

Peres Copello, As it was expected, agrees on the emphasis on social networks, “an excellent product communication channel, services and promotions, for its effectiveness, wide reach and repercussion at low cost”. But he puts the magnifying glass on the "real" premises. For them, he recommends “not overloaded” designs, where the client can perceive and understand the proposal that is being offered. 'Less is more', it is our recommendation, to select what you want to highlight”. When it comes to customer loyalty, You can use benefits such as accumulation of points for purchases made (that then allow access to discounts), product rewards for purchasing at a certain frequency, earn referral discounts, among others. “But you always have to position yourself from the customer's head, to understand their needs and on that basis offer a proposal that is valued”, emphasizes the expert.

Chopped and wallets

Asked about a successful case, Mileo does not hesitate to mention two examples: “All Fashion, that achieved its expansion based on managing the cash that a local should contribute to the business, in order to open the next one”. And in second place, the cadena Piccadelly, of bites at home, “whose business model was changing as a result of the negotiation with the motorcycle union, the appearance of delivery companies, and other factors. But they never lost focus when it comes to the quality of the raw material., production efficiency and product presentation, that is, its Key Success Factors”, details.

Pérès Copello describes the case of a client who designed, made and sold handbags. "At the time of contacting us, the businesswoman was alone in charge of all the responsibilities of the business, but did not have effective and secure information for decision making. A) Yes, the first stages of the work focused on providing management tools. Then", explains the specialist, “We work on the cost structure of each product, to set prices, that at the same time had to be competitive in the market. A) Yes, by achieving healthy results for the business, the next steps were to add an administrative assistant, develop business strategy (with the incorporation of resellers to expand geographical areas and significantly increase sales), and also improve collections and the flow of funds. Electronic means of payment were also incorporated.. in communication, finally, work was done on the expansion of channels, such as social networks and digital media”, Pérès Copello review.

Even so, the store on the street was long in coming, explains the consultant, "Because at that time it was not yet feasible to open your own business premises, since the volume of sales required to meet the fixed and direct costs was too high.. The solution? “Deliver products on consignment to clothing stores and complementary products, in order to start having visibility of the brand on the street”, Explain.

See full note