Scaling a Business in a Small Town

[Mimaktsa10]

Sometimes a person is ready to start a business or already has an existing business, but does not yet know the upper income threshold in the chosen niche in his region. Or he is faced with the fact that the profit is not higher than 100,000 per month, but he would like more. In this case, it is worth thinking about scaling.

Case No. 1
Let's look at an example with a movie theater. Having studied the statistics, the owner noticed that the monthly income was approximately the same throughout the year. It was possible to raise ticket prices to increase the average bill, but the owner recognized this strategy as irrational. He decided to increase attendance and find out the reason for the lack of income growth. An analysis of movie theaters across the country showed that about 10% of residents of each city go to them. According to statistics, a movie theater is a fashionable trend, it attracts 2,500-3,000 visitors per month out of a population of 40,000. That is, there are 1,500 people missing per month to reach the expected attendance.

Scaling a Business in a Small Town

Source: freepik.com

A study of data from a competing chile email list movie theater in the city showed that the overall attendance corresponded to these 10% of viewers. The owner came to the conclusion that it was necessary not to win new moviegoers, but to lure them away from the competitor.

Case No. 2
The advertising products manufacturing company was organized with the expectation that banners, signs, brochures would always be in demand in the city. But the expectations were not met. The market is saturated, and in some periods less profit comes into the cash register.

For example: all businessmen have ordered light boxes, new sole proprietors have not been registered for six months, and no one needs signs anymore. Moreover, the average service life of these signs is 12+ years: they will not be replaced anytime soon. This is how seasonality arises, which presents certain risks associated, for example, with the fact that the company cannot maintain a full staff of professionals at the workplace.

To avoid such negativity, it was decided to expand the range of PR products. Previously, they were printed only in large print runs. After scaling, the following types of services were added:

printing of leaflets, brochures, business cards from one unit;

production of magazines and forms for city budget organizations;

production of certificates;

publishing magazines and books commissioned by local poets and writers.

Result: previously, the printing press would stand idle for three days, now it is never out of use for even two hours.

Case No. 3
Situation: the population of the urban-type settlement has already purchased kitchen units, TVs, beds, etc. Then it is time to think about selling to neighboring cities or focus on the cases above: expand the product line or lure customers from competitors.