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Can your business outlive you? It’s worth asking when considering an exit plan. Millennials seeking entrepreneurship instead of traditional 9-to-5 jobs are snapping up small Boomer-founded businesses with recurring revenue, solid customer bases and expertise in niche markets not easily replaced by AI. We take a look at what kinds of SMBs are making the cut and who’s buying them. We also examine why your store’s point of view might be the invisible line item that can impact your bottom line the most.
But before we get into it, check out this video explainer on why Dollar Stores keep essential items at the back.
[ FIRST GLANCE ]
[ THE TOP LINE ]
What makes SMBs sellable and why Millennials are buying them
Why is that sleepy HVAC business suddenly a hot commodity? Younger generations looking to acquire rather than start a business are zeroing in on those that provide recurring revenue, an existing customer base and fill a specific need–and companies in blue-collar trades or bookkeeping often fit the bill. But no matter what you sell, these traits are crucial to any business seeking longevity. Ask yourself if your business has sellable assets, a viable successor and healthy finances (the latter can take a few years of work). If it’s valuable to your customers, it’s probably attractive to prospective buyers, too, which can alleviate uncertainty about exit plans.
Why this matters: An estimated 85% of Baby Boomer businesses for sale never end up selling. Making sure you stand out in a competitive acquisition market takes years of prep, but it’s work that also pays off in the present. (Forbes)
Why a point of view is your brand’s most valuable asset
While a “point of view” can seem intangible, it shows up in multiple ways: your store’s brand identity, taste level and aesthetic. It may be crystal clear when you launch, but as you grow over time, it risks becoming diluted and you risk losing customers. To stay focused, lead regular in-person reviews with your team to ensure that your products, store layout, presentations and messaging stay consistent (Apple and Costco are excellent examples). Resist the temptation to be everything to everyone and constantly ask yourself: “Is this something my target customers will want?”
Why this matters: A POV is like any living, breathing relationship: it takes ongoing, company-wide discipline to sustain and protect. It may not be a line item on your ledger, but its absence will impact your bottom line. (The Robin Report)
[ THE LOWDOWN ]
[ THE THINK TANK ]
The invisible ways you build customer loyalty
Invisible loyalty doesn’t develop quickly. It’s the result of consistent, intentional actions made over time. It requires investing the time to get to know customers, their preferences, and how the retailer’s expertise and products fit into their life.”
Customer loyalty is harder to spot than a punch card that accrues points. According to Quilt Software CEO Andrew Stern, it’s invisible. Data from CapitalOne shows that 65% of retail business comes from loyal customers who cite intangibles as why they choose one store over another. A small action like setting aside a product you know a regular customer will like can make them feel recognized, understood and valued. Prioritizing local sourcing and creating signage to educate customers can show that you share your customers’ values, and taking the time to advise them on a purchase builds trust and positions you as an advisor and expert.
Why this matters: A willingness to prioritize long-term relationships over short-term wins is what sets successful niche retailers apart. Go out of your way, remember the small details and don’t try to be everything to everyone. (Retail Customer Experience)
[ THE DOWNLOAD ]
How buy now, pay later is saving small businesses
The fintech function known as Buy Now, Pay Later (BNPL) has changed the consumer landscape by allowing cash-strapped shoppers to pay over time for their purchases. Now it’s aiming to level the playing field for small businesses, allowing vendors to do the same so that businesses can get paid on time. Intuit QuickBooks partnered with BNPL company Affirm to integrate this function into its platform, so you simply send an invoice per usual while customers now see several pay-over-time options. Affirm handles the financing processes so owners don’t have to chase down late payments. You not only continue generating revenue, but you increase customer conversion.
Why this matters: Small businesses are especially vulnerable when a customer doesn’t pay on time. Integrating BNPL into existing bookkeeping platforms is a much-needed back-office assist without the time or money investment of additional software. (Retail Brew)
[ POLL ]
Do you plan to sell your business when you retire?
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The SKUpe is curated and written by Marcy Medina, and edited by Bianca Prieto.
