Tips for entrepreneurs: There are reasons for everything, but are they good ones? How do businesses succeed? You’d be surprised.
By ISSAMAR GINZBERGBusinessman in a mirror 311(photo credit: Digital Vision)
There are reasons for everything – but are they good ones? How do other businesses succeed? You’d be surprised. They don’t necessarily thrive or fail because of the reasons we’d think.For instance, people think its good business to be located next to a bank because “Everyone has to go to the bank!” It’s where they conduct their financial business.Many people want it be convenient, so many retail businesses locate their stores next to banks. However, people don’t particularly like to go to the bank. They go because they have to. Banks are boring. Unless you are rich and doing well financially, they create feelings of tension. Hence, when people pass a bank, they speed up.So if you were looking to open or relocate a shop, opening it next to a bank might actually hurt your business.There’s an entire science called the “economics of agglomeration” that is devoted to determining and studying how, why and where to locate your business.This is just a pearl I once found that I’m sharing for the purpose of illustrating this column. According to the basics of agglomeration, similar businesses tend to group together. That’s why there’s a “financial district, retail malls, food courts, and industrial parks.”“Now you tell me!?” I can almost hear the shrinking and feel the horrified reaction of retail readers of this column. This is not the end of the world or your business.It’s just something to be aware of. You just have to be aware of it and then turn it to your advantage and do something to catch the attention of those people hurriedly going to and from the bank.How a mirror can help you There is something any retailer can do to make people slow down as they pass your shop, no matter where it is located.Here’s the tip: a mirror. Folks are fascinated by what they see in a mirror. The more prominent the mirror, the better. Have a mirrored window right next to your display window. Mirrors make people slow down to see themselves. This gives you an extra chance to slow down passersby long enough so they can notice your store or business and – depending upon your display of products, your clean look, your signs and perhaps the wonderful odors of baking or cooking wafting out the door – enter your store.Not every business is so customer oriented, however. I once went into a Staples office-supplies store in Howell, New Jersey. It was hard to find, as my GPS kept showing me that the Staples was in Lakewood, literally one intersection away.Once I finally found the store, I asked an employee, “Why was your store so hard to find? I’ve been searching for half an hour!” The employee responded, “Our store managers get rated based on total sales. That’s what a chunk of their bonus depends on. And since Lakewood is an Urban Enterprise Zone, tax rates there are only 3 percent. Here in Howell, they are double that. So, our managers kvetched to have the store relocated... The corporation and shareholders may have spent a fortune on this, but the manager got his bonus!” It still shocks me when I think about how much money gets spent on the backs of shareholders for the benefit of some specific person. But I admit, it also does the positive job of helping me analyze a business.Out of that incident and others grew this column! I learned some other things about perceptions and business location.What the brain wants to believe At my Nefesh B’Nefesh seminar earlier this month, the audience was agape when we discussed the study of the “woman coming home from work.” It wasn’t just the talk that stunned them, it was the research I shared with them: A group of students were shown a video clip of a woman coming home from work. Half of the students were told she was a waitress and half were told she was a librarian.Although the woman was not wearing glasses, a high percentage of those who were told they were viewing a librarian recalled her wearing glasses. No such recollection was found among those who were told she was a waitress.In short, brains – both ours and those of our clients – are amazing in both their ability to recollect and in their ability to invent information to justify what their brain already wants to believe. This research has been proven over and over again in every field – including law enforcement’s study of how accurate eyewitnesses are when describing a crime.There are reasons for everything. What we think is the reason for why people may or may not buy our products or services may or may not be the correct reason (focus groups don’t work consistently). It never hurts to take a look, to talk to your customers and to find out for sure why people love, or hate, your business!issamar@issamar.com
Issamar Ginzberg is a business adviser, marketer, professional speaker and rabbi who has been published in more than 50 business publications.
if(catID != 151){
var cont = `Take Israel home with the new Jerusalem Post Store
