Pauline E. Ranger Small businesses often dream of growing into a larger company. Suppose you stop to think about it; nearly all big companies started as small ones. Nike made its first sale from the trunk of a car. Dell’s first computer was shipped from a dorm in a college. Starbucks started as a small mom-and-pop shop.
A bigger business does not always mean a better one. Big becomes a bad thing at some point. McDonald’s is a good example of how big becomes more about being convenient than unique. Wal-Mart has made big a matter of gaining market share and not caring about the customer. Big becomes ubiquitous.
By the time a business becomes big, it is time to go back to being small. Paradoxical? Yes. Impractical? No.
Numerous businesses have grown to be larger while still maintaining the appearance of being small. They become bigger by acting small. These businesses are, in essence, like jumbo shrimp – big but small.
How can you grow your business by being smaller? Start by following these “Jumbo shrimp business rules.”
Be the best, not the biggest
Businesses that sell Jumbo Shrimps believe that the key to success isn’t necessarily increasing their sales or sizes but rather becoming the best in what they do.
Cabela’s ( www.cabelas.com) personifies this philosophy. What began as a small business selling hand-tied fly fishing has grown into a large enterprise generating more than $2.0 billion a year in sales.
Cabela’s growth has come from its desire to be the best retailer of hunting, fishing, and camping equipment rather than to try to be the largest. Cabela’s executives are so committed to being the best outdoor retailer that they have stated publicly that they will not open more than about 40 locations. Cabela’s will be able to focus on creating bigger, better, and unique stores with such discipline.
Jumbo Shrimp Step Action: Concentrate efforts on being the very best at what you do. Customers and your industry will recognize you for consistently delivering the best products, services, and customer experience.
Love your business
Jumbo Shrimp businesses are more likely to be started of passion than a desire to make money.
Box office sales have been declining for the last five years. But the Alamo Drafthouse (www.drafthouse.com), a small movie theater chain based in Austin, TX, is bucking this trend. Since its founding in 1997, the Alamo Drafthouse has seen double-digit sales growth in each of its seven Texas locations. Last year, sales exceeded $25 million.
Alamo’s love of films is the root of its success. Alamo’s owners are film buffs. They have created a concept that appeals to film lovers and moviegoers who are looking for a more thrilling and inspiring experience.
Alamo moviegoers won’t be satisfied with Twizzlers and Milk Duds. The Alamo offers dinner and drinks at each show. The Alamo never shows on-screen advertisements because real movie fans dislike them. The Alamo’s pre-show entertainment is made up of homemade commercials, spoofs, and previews from offbeat and obscure films.
Quentin Tarantino hosts his movie festival every year at the Alamo.
Entertainment Weekly magazine has named the Alamo the “Best Movie Theater Chain in America” for its increased sales and growing fan base.
Jumbo Shrimp Step Action: Follow Your Folly. Passionate about your business. Customers will notice if you’re not passionate about your company and may take their business somewhere else if they see it.
Passion attracts passion
Passions can be inspired by the forces involved in creating a Jumbo Shrimp Business.
Passion has propelled The Guitar Center (www.guitarcenter.com). The Guitar Center’s employees and customers are both passionate about music. The Guitar Center started in 1961 in Hollywood, CA, as a small organ store. It now has nearly 200 locations across the country and a 1.8-billion-dollar business.
Guitar Center employees are usually aspiring musicians from the local music scene. They also act as evangelists for the Guitar Center in their locality. These employees are passionate about music and love to share their love of music with Guitar Center’s customers.
Jumbo Shrimp Step Action: Do not settle for “warm bodies.” Hire passionate people. Hire passionate people.
Treat your employees like family
Companies that sell Jumbo Shrimp develop relationships with their staff in a way beyond professionalism and into something personal.
The Container Store (www.containerstore.com) is a Dallas-based privately held company specializing in selling boxes, bins, and everything in between. The Container Store has had a very successful business, with 2006 sales exceeding $500 million in spite of only having 39 stores in 18 markets.
Why has the Container Store achieved such success when many of its products are available at Wal-Mart and other mega-retailers? The Container Store understands that competitors can copy its effects but not its staff.
Container Store offers new employees more than 240 training hours in their first year, compared to the industry standard (7 hours). The employees are paid up to three times as much as the industry average. Employees receive a generous discount of 40% on all purchases made at the store. The Container Store amazes its employees to make them astonish their customers.
The Container Store, which treats its employees as if they were family members, has won a loyal following and was named one of Fortune Magazine’s “100 Best Companies To Work For” in five out of eight years.
Jumbo Shrimp Step Action: Apply the golden rule. The company will ultimately be rewarded if you treat employees the way that you want to be treated.
Redefine success
The majority of businesses focus on sales and their impact on both top-line and lower-line figures to measure success. Jumbo Shrimp firms, on the contrary, measure success by their impact on customers, suppliers, and other stakeholders.
Derek Sivers founded CD Baby in 1997 to allow his band to sell their CDs online. CD Baby has become the largest online retailer for CDs by independent musicians. While you will not find the latest Beyonce CD for sale at CD Baby, you will find the debut CD from an emerging artist like Lemme (www.cdbaby.com/cd/lemme).
CD Baby’s mechanics are in the favor of the musician. The musician sends four CDs and pays a $35 setup fee to CD Baby. CD Baby takes $4 per sale, and the musician gets the rest.
CD Baby’s success is measured uniquely. It is prouder to say that nearly $45,000,000 has been paid back to musicians than to talk about CD Baby numbers.
Jumbo Shrimp Step Action: Measure Impact Find out how to measure your impact on others’ success. You will most likely succeed if your customers do.
