Since the 1980s, small businesses have become a staple of the American economy, growing in numbers and strength by using tenacity and ingenuity to stay viable in the ever-expanding corporate big business game. And yet, over the last decade, small businesses have had a rough time of it. Tax incentives for them have diminished and larger corporations are infiltrating small-town America, driving so many mom and pop stores into bankruptcy.
The Internet shopping trend has also increased to take the shares that small businesses used to command. For example, Amazon used to be only an online bookstore. Now, it sells literally everything including cars and houses that can be shipped right to your door. It is estimated that they alone constitute 40% of the retail market entirely. That is a staggering percentage that does not bode well for your average hometown retail shop.
Small towns like Hamilton in states such as Montana are fighting the takeover of large box stores in their communities. Walmart has been trying to purchase land and erect a huge store in the Bitterroot Valley for almost two decades, but the citizens always somehow manage to vote it down. They are concerned that the presence of a Walmart will significantly damage what little locally-owned small business is left in the city.
Local businesses rely on support from their communities to help keep them in business. Yet, with so many people migrating to rural America from large states like California and Colorado, real estate prices are going up, but wages are not going up to help locals to afford housing in their own town. Big box stores drive the price of goods down and also tend to drive local businesses out of business entirely. It’s a difficult time to be a small business owner in America.
Stores like Walmart and Amazon have one thing in common about how they go about doing business that makes them more cost-effective to operate. They do not really produce anything. Instead, they drop ship from suppliers around the world and stock things from other countries that have cheaper labor and goods. There are many lessons to be learned from these big box stores that can change the course of how small businesses manage their operations.
Support From Bigger Businesses
In order for an individual business to be successful in small-town America today, it must be able to compete with the larger stores and even exceed expectations that customers have regarding service, products, and cost. But how is that possible to achieve when the competition can order 100,000 units of a product at a fraction of the cost of what the mom and pop store can? There are two basic ways to grow a business in a more competitive business environment: decrease costs and increase efficiency.
Let’s take a look at an example of a locally owned and operated drugstore to review how it might stay viable enough to compete with a larger store such as Walgreens.
Seeley Lake Drugstore is a small, locally owned and operated pharmacy that caters to local residents. They have one main pharmacist, a manager, two employees and are open Monday – Friday 10-5pm. Their store stock is much like a Walgreens but on a much smaller scale, so they sell toiletries, over the counter medicine, first aid supplies, etc. They also sell greeting cards, locally made candles and lotions, and some candy and sports drinks. It is a charming little place that provides a model for other businesses to follow.
Yet, if a big box store were to move into Seeley Lake, MT, how would a small shop like this stay afloat? Though it might be tough to compete in the long run, there are a few ways that they could stay in the game. They would first need to review their business practices to determine how they could streamline some services and increase advertising.
They might try to start by decreasing costs, increasing efficiency, and outsourcing some of their services so that they could focus on their core competencies. It would of course still be tough to compete, but changing some of their core business strategies could only help. Let’s look at how outsourcing can save time and money.
Seeley Lake Pharmacy has a mailing list to which they send invoices for account balances, including a monthly newsletter, discounts and sales advertisements, and health advice. They have about 800 people on the mailing list in a town of only about 3,000 people, which is an impressive ratio. Every month, one of the only two employees that they have spends the good part of a week in the backroom on the computer. Let’s call her Mary.
Mary usually works full time every week during the hours of operation. She makes about $10/hr and puts in about 35 hours a week, which is a gross income of $1400/month. Each month she is taken away from customer service at the front desk to work on the invoices, sales flyer, and newsletter for the 800-person mailing list. They have one computer in the back room with an older model ink-jet printer.
Mary knows a little about design software so she uses it to create a trifold one sheet that has some sale prices of products along with some health tips during flu season and a fun fact or two. She prints each person’s individual invoice to go along with the flyer. She has a template that she uses to design the flyer and invoice, though it is neither flashy nor exciting in any way. It is usually printed in black and white on some color paper stock that she buys at Staples in Missoula.
It takes her about a day to update the invoices, 1-2 days to design the flyer, a day to print, and another day to fold and stuff the entire print batch. That is four days of work for her and another day to order supplies, troubleshoot computer problems, change ink and clean the printer, add postage to the batch, and drop the flyers in the mail. Let’s say that means she spends 5 days a month doing the mailing. That adds up to being the cost of the paper, ink, computer and printer upkeep, stamps, and a little less than $350 gross for her wages.
By outsourcing that printing and mailing to a third party company such as Towne Mailer, Mary’s focus would go back to being customer service. She would send the info to Towne Mailer to be expertly formatted and printed. Within 24 hours of approval of the proof by Mary, the mailer would be sent. Most of that would happen in one day by partnering with a printing and mailing company such as Towne Mailer.
For the small cost of hiring out the printing with a company that deals in huge volume to keep costs down, Mary has saved the company more than $200/month, which works out to be over $2,400 a year. While that is not a huge amount of money, for a small business, it can really help. That is only one small way to decrease costs, increase efficiency, and improve end result using outsourcing as a guide for success.
Building Core Competencies
By outsourcing their printing and mailing, Seeley Lake Pharmacy can also train Mary to become an assistant to the one pharmacist that they have. She can pick up some night classes so that she can see a wage increase over time. Mary can also be more available to help in busy times at the register, can help with customer service, and generally be able to focus on the business of a pharmacy, rather than the business of a print shop.
When you partner with a third party professional printing and mailing company such as Towne Mailer, your business can benefit in the same way that the pharmacy did. You can help your business to decrease costs, increase productivity, improve the end result, and be able to focus on your business’ core competencies. Valuable time and money are saved in the meantime.
Who is Towne Mailer?
Towne Mailer is a locally owned and operated specialty invoice printing and mailing company located in Missoula, MT. Located in our state-of-the-art printing and mailing warehouse of over 7,000 feet, we at Towne Mailer have spent over 20 years perfecting our craft of designing, printing, and mailing the most beautifully formatted, highest quality prints available on the market today. We specialize in helping small and large businesses alike to outsource with us and improve their businesses.
Our 20 person staff is expertly trained to handle both small and large batch printing without preference for either. We treat Mary just like we treat a large corporation: with respect, excellent customer care and service, and impeccable printing every time. We pride ourselves on being the best in the business and we serve clients all over the United States. It is our goal to help businesses to streamline their services to allow them to focus their attention on what they love about doing business the most. Call Towne Mailer today for a free quote on how we can help you!