Sustainable Business/Building your credibility
It is difficult to convince people to do business with you when you have little or no established credibility. This does not mean you have poor credibility but rather the potential customers will perceive you has having no credibility.
People are always apprehensive about switching to any new supplier. There is always a risk that comes with change, for example the risk of being overcharged, of encountering rudeness or experiencing poor work habits. Few customers will switch simply because they are looking for a change.
So you must be prepared to convince them you are the best choice. This will not only take creative thinking but also an understanding of your potential customer and what motivates them to purchase.
- 1 Credibility Strategy
- 2 The aim of a credibility strategy is to:
- 3 Your Competitive Advantage.
- 4 Knowledge
- 5 Better Supplier Relationships
This is an attempt to offset and address as many of the potential customers apprehensions as possible. The aim is to give the potential customer confidence in dealing with you.
Customers do business with a company or person who is credible, expert and trustworthy.
The aim of a credibility strategy is to:
- increase your credibility
- reduce the level of risk and apprehension the customer may feel about dealing with you and your business..
Your Competitive Advantage.
This is your unique selling point. Emphasise your competitive advantage and unique selling points early in your business plan. This way the reader will understand the concept of your enterprise as they work through the information (you will neet to show how you plan to communicate these to your [potential market).
A competitive advantage is what you are better at than anyone else. (and is how you manage to stay ahead of the competition).
Consider competitive advantage from these perspectives
- Could you list your key advantages?
- Could your staff?
- Could Your customers?
A competitive advantage is only relevant when a customer (not you) thinks it is an advantage.
Lets think about you and your business with the idea of a competitor in mind. We can define a competitor as any business competing for the consumers discretionary dollar. So to survive and stay in business (or be sustainable) you need as many of the following as possible:
Unique or exclusive product.
never underestimate the value of excellent service, starting with the first point of contact.
You and Your Image
You are your own unique product, nobody else has your particular mix of skills.
You must have better knowledge than the businesses around you, in the modern world knowledge is power is what we have often been told. To bring this down to the level of the small business person it means keeping an eye on your competitors and their product offerings. It is critical to evaluate the product offering of your direct competitors as they could quickly draw your customers away. Changes that indirect competitors product offering does not have the immediate impact on your business but is still worth watching as they could signal shifts in customer spending.
Better Supplier Relationships
these are an often overlooked competitive advantage. Perhaps you have a strategic alliance or a contract with them that the competition cannot match.
Supply chain integrity is important. Unacceptable practices by your suppliers expose your business to the risk of losing customers. Try and align your business to suppliers who share similar values. For example a supplier using child labour in the 3rd world could give you a negative image with your market.
Key Supplier Backup
Being linked with a well known supplier will help. They conduct all the market research, develop new products and services, undertake customer analysis and provide nationwide branding and advertising which all helps with your credibility. A contract where you have exclusivity to supply is even better.
The quicker you can deliver the product or service at a consistent quality the better. (work with a customer to deliver in slow where there is no urgent need) Edit
The traditional view has been the quicker you can deliver the product or service at a consistent quality the better. However having a good understanding of your customers means supplying when the customer needs the product. This is referred to as Just-in-time. This requires having n understanding of your customers need for what you are supplying. This can lead to mutually beneficial cost savings - in your case you might be able to select a lower cost carrier or obtain discounts for shipping sereval items with the same acrrier on the same trip. the carrying company is able to more efficiently utilise its equipment and reduce its carbon footprint For your customer it means having reduced need to storage space of and having the satisfaction of being involved in a transaction that helps lower a carbon footprint.
Developing relationships with customers at this level has further benefits as it means when we come to form budgets we wil involve our customers and as a result our own budgets will be more reliable.
being cheapest is the easiest tactic to implement, but long term survival in business requires good margins. Generally businesses that compete on price have a cost advantage so they might still have quite high margins.
Building a strategic alliance with a customer, a supplier or a business that sells complimentary products or services is an advantage.
Thinking more broadly strategic alliances can also be built within your local community. This can help your credibility in the eyes of some customers. For example by having involvement with a local sports club or cultural group the small business can demonstrate a sense place within and commitment to a community (and a market).
Owning a unique technology that nobody else can access or will have difficulty copying can be a great advantage. In this situation patent or copyright protection is very important.
In terms of your office management reviewing your technology needs is critical. One common area to overspend on is software. getting the right software for the job means understanding what it is that is required. A common practice when accounting software is being used for the first time is to select the most basic package that will do the job. Once the system is working it is then time to think about what else needs to be automated and what additional modules to purchase. This stepped process means that staff make gradual steps and learn as thy go. It also helps stop overspend on modules that might be of questionable value.
An area of rapid change in the last 5 years have been the availability of Open Office. This software is free to download and will have almost the same features as Microsoft Office which is not free.
This is becoming more and more of a competitive advantage for many small businesses. You must mention how you intend to use e-commerce in your business. (??????) Eg e-commerce has enabled you to lower costs, improve customer relations speed up delivery or maybe it provides you with new streams on income.
The internet and internet enabled business processes are not part of everything we do from ordering, paying bills, wages and filing routine tax returns. The failure to take full advantage of internet enabled solutions frequently means more time is spent on routine work and where responses are required response time is slower.
the big issues with e-commerce now relate to security. Because of our reliance on the internet we have to ensure that computers used have adequate security from unwanted viruses. Whilst everyone will understand when a computer is attacked by a virus they will not be so forgiving when your computer is hacked into and sensitive information about your staff, customers or suppliers is stolen. adequate security will not just keep your computer and software running but also help preserve your reputation is as somebody of credibility to deal with.
Environmental issues offer a number of opportunities for you to gain a competitive advantage. For example the way you design, manufacture and package your product using environmentally responsible, sustainable or recyclable materials may make it better for the environment than a competitors product. If you can add an environmental label such as Choice or Enviromark so much the better.
Quality means conforming to customer requirements. The right product at the right price at the right time. Meeting the competitive advantages above will give you a quality product and quality service.
In a business plan you should also outline key achievements to date (you might be pleasantly surprised).