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Quick Marketing & Business Tips – Episode 32

by Tasos

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Sep 9, 2021

The Digital Marketing Game Has Changed

The Web 3.0 Future – The Power of Questions and Quiz Funnels

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Quick Marketing & Business Tips

Episode 32

Welcome to our video series “quick marketing and business tips” where we’re giving you actionable advice, tips, and recommendations, to grow your business today.

This is episode #32.

Let’s dive right in!

Episode 32: Business growth failure example

We have already discussed that entrepreneurs are innovators, leaders, action-takers, and risk-takers. But we also underlined that successful entrepreneurs take calculated risks.

Today, I want to share a story from my neighborhood.

There is a cafe on one of the main streets in the area. It was opened over 10 years ago. A big place, around 100 tables, 10-12 employees.

Close to this cafe, there is a bakery, a dance school, and a fish market.

On the other side of the road, there was another cafe of the same size. Next to it, a martial arts school, a gym, a butcher shop, and a pharmacy.

So, there were 2 cafes, the competing brands, and all the other stores and shops.

Both cafes were busy and crowded most of the time and I was visiting both of them.

For many years, these 2 cafes were doing just great.

But at some point, one of the cafes was closed. I don’t know the reasons why.

And here’s what happened next.

The owner of the cafe that was still in business was worried that a new cafe would open soon at the same exact spot, on the other side of the road.

And he decided to rent the place himself. Just to make sure no competing cafe would open at the same spot, a cafe of the same size.

He knew that anyone could open a cafe by renting another property in the same area, but none of the other places had the same size as this one.

He also took the risk of building a new business from scratch, he did not just rent the place to keep it from opening.

Eventually, he opened a sports cafe.

So, this entrepreneur was running 2 businesses in the same area, the cafe and the sports cafe on the other side of the road.

But…the sports cafe was not doing well.

Only a few people here and there.

The old cafe was doing still OK.

Then, we got hit by the pandemic and both his businesses were forced to shut down for 2 months or so.

During this period, all the stores and shops in the area, and generally, in my country were suffering.

Long story short, the entrepreneur had to close the sports cafe once and for all.

Unfortunately, he lost a big amount of money in less than 1 year.

What happened to the store that was closed? 

Now, it’s run by a bank.

I know all these things because one of my friends was working as a manager at his cafe at that time.

What can we learn from this story?

The entrepreneur acted prematurely. He did not calculate all the risks. He made a big investment in the hope that the new cafe would do OK.

If he had given it a second thought, he would have decided just to rent the store and keep it from opening. He would not invest in a new business venture. He would have lost only the money of the rent, 100 times less than he actually lost.

Do not invest big money just to stop someone from opening a competing shop. in your area. They will find their way if they want to.

Invest in your own business growth.

When you run a local business, competing brands in the same area are not enemies, they can actually turn into allies.

More importantly, I noticed it a hundred times in my country and other countries, competing cafes in the same area is actually a good thing.

In all the areas I’ve visited where there are many cafes, even one next to another, all the cafes are prospering.

Find ways to form a partnership with competing brands instead of sabotaging them.

Invest in your service, your products, your people, your own business.

And last but not least…do not open a business that is very similar to the one you already run in the same area. You are competing yourself.

Thanks for watching and if you want to learn more about marketing and business, check out our private training workshops.

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