“Everything old is new again” – Jonathan Swift
Most people have become familiar, recently, with the sight of businesses opening, only to close in an unusually short time.
It happens everywhere:
-Strip malls
-Traditional malls
-Commercial or industrial areas
-On city and town main streets
It’s visible in everything, from restaurants to service providers like hair salons.
In most of these cases, aside from unpredictable factors playing a role in the business closure, the one common point that can be found as a cause is the business owner’s expectation that clients and profits come quickly. With that the business is operated in a manner that relies exclusively on the expectation of large profits within the first year. It’s all to clear how devastating this expectation can be to small businesses, the majority of which don’t have a large reserve fund to rely on.
It’s all too easy to see why this train of thought is so common; at every turn there’s a story about a business making obscene profits in an unbelievably short time, or even simply stories about a specific decade when almost every business ended up becoming successful regardless of how much time or effort was put in, with business just seemingly flying through the door with seemingly little emphasis put on advertising.
Today, there are of course still businesses that have such luck, although the numbers that end up in that category are few and far in-between. Too much has changed since those decades after the industrial revolution where seemingly anybody could open a business, and with minimal effort being put in, make a successful business in what would seem impossible nowadays.
Without taking into consideration the present-day access to any information imaginable, for researching what to buy and from where to source it, it has been proven in countless studies and data that customers have developed a reduced attention span. From style trends, product or brand loyalty, to customer service, the list is substantial. The number of factors that currently play a role in business to client interactions are numerous, although this is the one that can be said has done the most to disrupt the status-quo.
When talking about the past in comparison to the present, the current business situation couldn’t be more similar to the environment throughout most of the 19th century.
Let’s look at the realities businesses had to deal with in that century:
– Clients that were limited in numbers and part of reality was that longer times were needed for travel, limiting how often repeat clients would appear.
– Fewer clients meant that competition would be more intense between businesses of the same type operating in the same region.
– Gaining and keeping the trust of clients was #1. If the client has no trust in your product or business, they would readily go elsewhere.
– Supplies were rarely available on-demand; waiting times were a regular part of business. Planning ahead for possible delays or shortages was necessary.
There are most certainly many lessons that can be learned from how businesses operated back then, without having the intense rate of new business closures in the first 2 years of opening.
Considering the fact that operating expenses for businesses in that era were less, it also has to be taken into account that the possibility of attracting new clients was far lower. This would most likely even out to be equal opportunity for businesses now and then. That would leave one point as a cause for businesses to not close down as frequently, in that century:
A lack of expectation of extreme business growth at any period of time.
Most people started a business first to make a living wage; that they ended up becoming a successful business owner wasn’t their primary goal. There are countless examples of such a business; every city or town has it’s own long-running business that started in this same manner, only to grow to substantial size after a decade or more.
Back to the present, there are several realities that have negative effects on business operation.
Too many businesses of the same type open in the same area; this is most often seen in food industry businesses, mainly restaurants. How many customers can more than one restaurant serving the same cuisine expect to have in a neighborhood? Oddly, this is even more evident in areas that are reliant on seasonal business.
Business planning and market research rarely takes into account potential client input; instead emphasis is put more on data. Often a specific need is wrongly interpreted from data, which leads to the former and latter examples. I’ve personally seen, during the period of growth in 2018-2019 which a major international coffee shop chain had, numerous locations opened in major cities in Ontario, reducing distance between locations to 3 kilometres on average. Nearly two years later a major reversal was made, and not only were those newly opened shops closed, they ended up closing more shops that had previously existed.
Changes to product, business direction or even operation to catch and/or keep customer attention are too often viewed as a standard part of business operation these past few years. Customers often expect a constant stream of new products, it’s true; However, that’s a large expense for small businesses just starting, and is a trend that too many adhere to.
Lastly, if a business has an owner that doesn’t put in all their effort and creativity into the business, nothing else will matter. Almost any obstacle can be overcome and a solution can be found, if the business owner puts a strong enough emphasis on the goal of success.
When market research and business planning is done properly, before beginning business operation, when adherence to the goal of gaining customer trust is top priority, when maintaining over a long term a specific plan and product, and when ensuring that product can be supplied consistently, there is little that can get in the way of business success.
There are many occasions where the saying “Everything old is new again1” fits like a glove; in this case it describes all too perfectly what is happening now. My takeaway from this is that there is always something to be learned from looking at past events; It just takes a more abstract interpretation or view of the events to see what can be applied to the current day situation.
1 – Quote attributed to Jonathan Swift
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