- Pittsburgh Investor
How To Succeed in Business
When it comes to starting and running a business, there are really only 3 ways to become successful. Yes there are hundreds of small things that need to be executed properly, but from a business model standpoint, these are the top 3 ways to run a great business.
1. Low Cost Provider
This is just as it sounds. Being the lowest cost provider is the cheapest option in the market place in your industry. There will always be a section of the buyer marketplace that says "what is the cheapest option"? These people will always buy the low cost product or service. Everyone likes the idea of getting something for less! That is why this business model is so valuable. You can think of the big brands you personally use. Consider companies like Dollar Tree, Walmart, Amazon, GEICO, all of these companies excel at getting you a product or service for less than the competitors.
When considering if this makes sense for starting a business in Pittsburgh, think about if there is a way to source your materials or produce your products at a very low cost. Do you have a way to go direct to the source of whatever materials or goods you need, to pass on the savings to your customer. Also, you can consider cutting your profit margin. Can you charge less and make less, but do a ton of volume? This is the model I have implemented at Sterling Heights Financial Group. We focus on low fee financial services to win over a large percentage of the market, while still providing a great service! These are the ways you can have a competitive advantage with a business in Pittsburgh as the lowest cost provider.
2. Proprietary Product/Service
Next is having a proprietary product or service. This is just a fancy word for saying your product or service cannot be copied. This is extremely important in technology and product development. This can happen if someone patents a product. You see this a lot in the healthcare industry as well as the technology sector. When someone patents a product, the competition cannot copy that design, they can only license it, or hope to create something better. Also, there may be a service that you are able to provide due to certain connections, resources, etc that makes it very difficult for other businesses in your area to duplicate. Having a business with proprietary technology or services is amazing as it almost protects your business from competition.
3. Premium Product/Service
The last way to run a successful business, is by providing a premium quality product or service. These are the types of experiences that your customer will love and want to tell their friends about. This is the type of product that people wait in line for because nothing compares to it, and the amount of money almost doesn't matter to the consumer. Consider some brands like Apple and Jordan. You see images all the time of people surrounding a building to get the newest product from these companies. Even if the only change was a slightly different camera and phone storage, the raving fans of apple will be ready to drop another thousand dollars on a new phone!
That is because they create a premium product that people are willing to pay extra for. This is very common with services too. Maybe you do some of the work for free, help your customer solve an additional problem, or show them such a great time at your establishment that they leave with a big smile on their face. No one ever went out of business creating happy customers! Providing an experience they always remember will keep people coming back, and you can charge a premium for this. The goal with this model is not to be cheap, it is to be the best quality.
These 3 business models apply to any industry. If you take some time to consider which of these models makes the most sense for your business plan and your skill set, you can run a very profitable business in Pittsburgh. Many business owners and investors will simply copy or try to implement similar practices of other competitors. The truth is, you must find your lane and stick to it. Any one of these 3 business practices will make you successful, just find the right one for your business.