Entrepreneur
Big tech companies and small businesses face the same basic problems. They both need to understand their customers, manage costs and watch competitors. However, tech companies tackle these challenges with processes that most small businesses never implement.
I’ve spent years understanding both worlds, and I promise you: These five tech practices are worth stealing. They don’t require fancy software or a huge team. Just consistency.
Related: How Inefficient Processes Are Hurting Your Company
Understanding your customer persona and “jobs-to-be-done”
Tech companies and successful large corporations strive to understand their customers well. It’s much more nuanced than “we serve young professionals” or “the people in this neighborhood.”
Let’s take Starbucks as an example. They don’t just sell coffee to “coffee drinkers.” They have distinct customer personas: the rushed morning commuter who values speed above all, the remote worker camping out for hours (who probably should be paying rent, honestly) and the social meetup crowd treating the café as a gathering spot. Each persona drives different decisions on how their stores are set up and operated.
The key is understanding what job your customers are “hiring” you to do. Nobody buys a quarter-inch drill because they want a quarter-inch drill. They want a quarter-inch hole. Maybe they are first-time home-owners who are hanging shelves. Maybe they are woodworking hobbyists building a birdhouse. These are both different jobs to be done, an industry standard framework by Clayton M. Christensen.
It’s why Apple doesn’t sell “smartphones with good cameras.” They sell the ability to capture your child’s first steps in stunning clarity. The job to be done isn’t “own technology.” It’s “preserve memories.”
What job is your customer hiring you to do? Figure that out, and you’ll see opportunities your competitors miss entirely.
You’re leaking customers and don’t even know it
Product managers and tech companies obsess over retention. If your customers don’t come back, they probably don’t find your product valuable, and the company does not have product-market fit. Even if you acquire a lot of customers now, you will eventually lose them and churn through the market to oblivion.
You don’t need fancy systems for this. Just make a spreadsheet and start tracking. How many customers from last year still buy from you today? If that number makes you wince, you have a churn problem.
Your spreadsheet can track the purchase history of all customers. When do customers typically vanish? Three months in? After five purchases? Now, try to understand the reason behind it. Did they stop liking the product or service, find a cheaper alternative or just forget? If you email or call a couple of people to ask, you will have the answer.
Your existing customers believed in you enough to give you a shot. Understand their problems and make them loyal fans.
Related: 3 Pillars of Client Retention Every Brand Needs to Implement
Know your costs
Unit economics is the magic math that lets corporations grow large and become profitable. What does it cost the business for each thing sold? Small businesses often track overall expenses but forget to attribute them to individual products and services.
Let’s think about your neighborhood sandwich shop. If the supplying bakery raised its prices by 10%, what does it mean for each sandwich’s margins on the menu? Are they still profitable, and by how much?
Tracking costs in detail can be hard and tedious. It’s not just materials but also the labor costs, transaction fees, packaging and so on. However, not knowing detailed costs is a missed opportunity at best and dangerous at worst. You could be losing money on some items while others subsidize them. Or worse, your apparent “best seller” might be bleeding you dry while a humble side offering quietly delivers all your actual profits.
Create a spreadsheet today. List every product and service. Assign all costs and make sure to include everything. Update it when your costs change. I guarantee you’ll find surprises that will change what you sell or how much you sell it for.
Learn from your competition
Go down the street and try your competition. In a new city? Go to the store in the same business as you. Yes, actually pay for something. What works? What’s frustrating? How’s the service? How does it compare?
This introduces you to brand-new approaches to doing things. You can learn from what others are doing well and avoid their mistakes.
Maintain a shared document where your team can add insights regularly. Make this part of your culture, not an occasional panic response if sales dip.
Your personal board of directors
Silicon Valley startups assemble advisory boards featuring industry veterans, subject-matter experts and been-there-done-that entrepreneurs. Small business owners often try to figure out everything themselves, occasionally consulting with an accountant who’s juggling 200 other clients.
Your advisors shouldn’t just be friends who validate your ideas. You need people who will challenge your thinking, identify blind spots and connect you to opportunities. You need expertise you don’t have.
You don’t need to offer equity like tech companies. A lot of professionals will advise you for reasonable fees. Sometimes, retired or later-in-career veterans in the business will guide you just for the intellectual challenge of a new problem. Remember to formalize the relationship and talk to them regularly.
Related: How to Build an Advisory Board That Drives Startup Success
These practices all share one quality: They complement gut feelings with systematic processes. Your instincts still matter because you know your business intimately — but these systems catch what instincts miss.
As a small business owner, you’re already more nimble than large corporations. Add their systematic processes to your operation, and you’ll become truly dangerous.
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