In the world of startups and entrepreneurism, we spend a great deal of time discussing, funding, modeling, online marketing, lean principals, minimally viable products, goals and strategy and tactics, data analysis, ROI, CPC, and CPM (IMHO). We learn a great deal by reading various theories of business, analyzing principles of leadership, dissecting case studies, creating gantt charts, flowcharts, bar charts, cartesian charts, and venn diagrams. We study, review, and investigate in order to improve, progress, and develop out enterprises. And we take ourselves very seriously indeed.
I remember in business school, in the Entrepreneurial Finance course how the professor illustrated the difference between what he referred to as “high growth” businesses and those he (scornfully) called “moms and pops.” The expectation was that Kellogg students were to launch only high growth businesses, those with massive upsides, sophisticated underpinnings, and founder/managers who were well versed in the methodology and jargon of the day.
What we often forget to do is ask ourselves a simple question: WWMD? What would mom do? Or in this case, what would Mom and Pop do? Well to start mom and pop know their customers, understand the nuts and bolts of operating their business, and have their priorities straight when it comes to any and all expenditures. Here are 5 things we can all learn from them:
1. Do it yourself. If Mom and Pop know anything it is how to run their business. They may or may not have other employees, but you can be certain that if they do they are capable of doing the employee’s job better, faster, and cheaper than the employee herself. The key is to know your business from top to bottom and to be able to step in to execute on any aspect of the business.
2. Build relationships. Even if Mom and Pop have never heard of “customer lifetime value” they sure in heck understand the concept. Mom and Pop businesses are based entirely on relationships: starting them, building them, nurturing them. Through these long-term efforts at relationship building, Mom and Pop also have a deep understanding of word of mouth. Not “word-of-mouth marketing” (whatever that is), but simply the goodwill that is developed when a business builds a strong lasting relationship with its customers.
3. Bottom line above all else. Mom and Pop pay very little attention to the latest business books, the most popular blogs, or the current theories about social media marketing, but they do pay very close attention to one thing in particular: how much black ink is there at the bottom of the monthly income statement and how can that be improved next month? Practical and basic business operations are what matters and when Mom sees that expenses have risen or sales have slowed, she knows that something is off and must be addressed. She sticks to the basics, doesn’t get distracted by what others are doing and knows from deep experience how to run her own operation.
4. Don’t waste time or money. Unlike many startup entrepreneurs, Mom and Pop know when it’s time to go home at the end of the day. For them it’s not about working ungodly hours or burning midnight oil, but rather about running a business that fits their lifestyle. So they tend to be very productive with the hours they work, they will invent and iterate on their own home-grown systems and methods and they will keep their personal priorities well balanced between work and life. And, just as important as not wasting their time, they also tend to guard their money with great care. Marginal expenses are cut, overhead is kept low, and savings are celebrated wherever they are found.
5. Be humble. For Mom and Pop it is never about them. The customer comes first and the business is operated without personality or ego getting in the way. Mom and Pop are respectful and unpresuming; they defer to customers, take care of their workers, run a clean and tidy business, and make sure their bills are paid on time and their taxes are never in arrears. Their bank loves Mom and Pop, and even in a period of historically tight credit for small business, it is their long-term relationships with bankers and other professionals that pay off when that increase in the LOC is needed.
Photo: erin white
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