By Iris Ann Cooper
“Stirring the pot” conjures up threatening images of subterfuge from the undesirables in your world, right? Troublemakers. Antagonists. Villains. Pains in the A–! Who is empowered to stir your pot? The IRS can stir your pot. The health department can stir your pot. Employees and family members can stir your pot (and burn the entire meal!) However, for this discussion, the undesirable is your primary competitor who is appraising your business model 24-7.
Check out the impact of market disruption:
Uber has stirred the Yellow Cab pot and is now challenging FEDEX with package delivery.
Amazon and Ebay stirred the retail shopping experience pot and malls are empty and closing.
Redbox is waning as online movie viewers increase. Theaters have to re-engineer with restaurants and arcades to attract customers to view first run movies.
The funeral business has seen serious disruption; cremation is on track to dominate the death conclusion market by 2025 according to the Cremation Association of North America.
Who knew the world would change so dramatically for these industries?
Stirring your own pot will keep you fully engaged with the strengths and weaknesses of your business model. The business model is only as relevant as the operating environment that surrounds it. So, why-on-earth would you mess up a good thing like an old school, sanctified soul food restaurant or a dynamic drop-in daycare center? You would, could, and should if you covet a business model that will survive the market and economic risk that are certain to visit your business regularly and unpredictably.
The business model is the skeleton of your business. The business model guides the activities and processes for profit creation. In other words, profit is the potion in the pot that pays the bills and puts a smile on the proprietor’s face. If you ignore or neglect business model maintenance, you invite market disruption from the undesirables AKA your competitors.
Entrepreneurial pioneer Michael Porter (1996) suggested that market strategy must focus on the competitive advantage: the ability to be different enough to capture and sustain consumer engagement. The 4P’s of Marketing, (the marketing mix), are product, place, promotion, and price; these concepts buttress a traditional business model, but the operating environment today is anything but traditional. Sustainability also depends on being different enough to satisfy your target customer’s continual desire for new bells and whistles. Using the sanctified soul food restaurant as a platform and the 4Ps, let us explore how an entrepreneur might disrupt the model to gain greater market share.
Product: If fried chicken, (although unhealthy), is your #1 item, can you produce a tasty
low sodium batter for your wings and/or or sell wholesale to grocers? Would anyone care for a cup low sodium homemade chicken noodle soup (from scraps) for a delicious winter diversion? Scraps, when recycled, add seamless profit to your bottom line.
Place: How many in-person sales do you accumulate from 2-5pm weekdays? Would
“carryout only” during slow times save labor, utilities, and waste? How about adding an ATM to your restaurant? An additional $2.00 fee per transaction would be a simple addition to the bottom line and would pay for itself rapidly. The more opportunities the customer has to spend money while physically in your establishment, the more potion in your pot!
Price: How much does your competitor charge for beverages-$2.00? Profit margins on soda pop and coffee can be huge, sometimes 400%. Can you profitably include a beverage or dessert with a complete meal ($10.00) purchase? What about a loyalty program? With seven weekly chicken dinner purchases, the eighth dinner could be discounted and your customer could bring a friend!
Promotion: A Facebook page will not reach those who read the newspaper, in spite of its global marketing value. If your target customer is an elderly, single female on a fixed income, then perhaps direct mail for food delivery makes more sense. Neighborhood youth could earn extra cash by delivering a hot-card with a sample menu and pricing right to her doorstep. In addition to meal delivery, you could sell a limited amount of convenience items like soap, milk, hot sauce, and coffee to enhance your value proposition and make her life less stressful. Prescription pickup might be another service that seniors would appreciate with their dinner delivery (for a small fee), and a free dessert or beverage coupon with a meal the following week.
Change is constant and those who rebuke change will dry up and become a leftover. Opportunities to innovate and disrupt the market are today’s special on your menu for sustainability. Stir up your pot today to disrupt the market and extinguish your competitor’s plan to have your business for lunch!