Our small business strategy philosophy

Small businesses do have options to set themselves apart.

We believe that a strong business strategy has the following three key components:

Trying to demonstrate that you’re better than your competition is almost impossible but there is an alternative: positioning.

This essentially involves taking a unique marketing position by narrowing your focus to a specific industry, client type, demographic or service offering.

Instead of trying to be all things to all people, you aim to provide exceptional value to a very specific type of customer.

Positioning helps your business because:

• You’ll be able to clearly identify who you want to work with and tailor your message to resonate with them.
• The deeper you go, the more knowledge you’ll have of who your customers are, how they think and how you can help them get what they need.
• You won’t need to make statements like “we’re the best” to claim you’re different. Instead you’ll just be different. And this will help you stand out in a crowded marketplace.

Think about a specialist doctor. If you have a scary health condition, you’ll no doubt pay significantly more to see an expert on that exact problem rather than a regular GP. A specialist treats only a narrow range of patients but is extremely valuable to those people.

Our small business strategy philosophy

Just like a specialist doctor selects an area of expertise, you need to identify the characteristics of customers who you’ll be able to provide most value to.

This is often a niche market, based on:

• Demographic factors e.g. a particular age group, gender, income level, religion, belief, culture or family size.
• Geographic factors e.g. people living in a particular suburb or city.
• Industry factors e.g. businesses or employees working in a particular industry.

This strategy works equally well for products and services.

For products, it’s important that the positioning decision is made prior to developing the product. It’s very hard to take a generic and non-specific product and convince a particular niche market that it meets their specific needs.

Example: Pana Chocolate

Pana Chocolate have successfully positioned their product. They developed it based on the needs and desires of health-conscious consumers, i.e. only healthy ingredients.

Because of this, they achieved significant penetration throughout health food stores in their local area. This led to word-of-mouth marketing within their niche market and further growth, to the point that they now have national distribution through Woolworths.

Nerd Fitness?

There are different degrees to which you might promote your product or service to your niche market.

In the most extreme case, you would name your brand to directly appeal to the chosen niche. Everything you do and all your messaging would be about that particular niche.

For example, a business known as Nerd Fitness caters to, you guessed it, nerds who want to get fit and have their own way of thinking about it, talking about it, and pursuing it.

Alternatively, you could have a slightly broader scope by targeting multiple niche markets. This might result in a less-specific brand name and would probably make other marketing efforts (such as SEO or social media) more difficult to optimise.

For instance, how about a meal delivery service that focuses on city office workers at lunchtime and busy families in the evening?

Examples of good strategy

• A fashion expert sets up an online clothing business (a hugely competitive market) but positions themselves to focus on only maternity occupation-specific clothing: a much less competitive market, allowing the business to really help customers with a specific need.
• A public relations firm focuses only on plastic surgeons. If pharmaceutical companies want to reach plastic surgeons effectively, they’ll need to use this publicist. They will know all the journals and conferences and most of the doctors. If your job depended on hiring the best person in the world to publicise your new product to plastic surgeons, who would you hire? (Example taken from Purple Cow, Seth Godin)
• A restaurant in Sydney called Bistecca specialises in offering only T-bone steaks. Its business is built around the idea that their chef cooks the best T-bone steaks and their website, advertising, branding and restaurant’s interior design all support this idea.
• Another restaurant in Sydney called Saint Peter is based around interesting and innovative ways to prepare seafood, particularly the cuts (like offal) that are often valued the least. Such targeted positioning has resulted in the chef becoming known as an expert in the field of cooking seafood, leading to a successful side business selling specific seafood-cooking utensils, tickets to cooking classes and seafood cookbooks.

Restaurants like the two mentioned are great examples of businesses that have nailed their positioning.

If you were taking a friend out to dinner for a good steak or seafood, maybe one of these would be at the top of your list? And budding chefs who are passionate about meat or seafood would probably be doing everything they can to get a job at either of these restaurants.

Perhaps it’s worth recalling your dining experiences at places that have no clear strategy. These are the cafes and restaurants that try to cater to the masses: a huge menu with no particular focus – a little bit for everyone.

Are they consistently booked-out like the ones targeting a niche market? Do you think the staff are as passionate about the food they are serving? And how about their marketing – how would they attract new customers?