Several years back, I did the keynote speech for an economic development conference on my Destination Business principles.
When I was done, the next presenter got up and it was obvious he wanted to show that he was a well-traveled expert. To illustrate this, he began by flashing up on the screen photographs he’d taken of small businesses that he found particularly amusing.
Most of the photographs were similar to what I have posted on this page, a small business that combined two or more products or services under one roof that you’d never expect to be together. Now, to be fair, he didn’t flash the photo I have here of the quilt shop/liquor store, but he did show similar examples of unexpected combinations of products in the same business.
With each photo, the audience laughed, as he poked fun at the businesses being shown on the screen.
And all I could do was sit there thinking: “This guy’s totally missed the point!”
I’ve spoken in hundreds of cities and small towns, and I’ve never been to, nor seen the quilt shop/liquor store shown here. Someone sent me this picture. And just to be clear, I’m not making fun of this business. Actually, there’s brilliance in this business.
You see, in the world of retail development, this quilt shop/liquor store is called a “multi-focus business”, meaning that it has two or more unique business models operating under one roof.
So when I find a business like this that has an unusual combination of products in it, I know it’s often because it takes multiple product lines (often diverse ones), combined together, to generate enough revenue for a business in a small town to actually make money. I also know that smart business owners try to meet the needs of local customers, while also trying to grow their revenue, while identifying consumer demand, hopefully discovering and capitalizing on unsatisfied niche categories to produce a greater return-on-investment. (Basically, I’ve just described the fundamental rules of the most successful businesses.)
Plus, most independently-owned businesses in a smaller marketplace can’t operate like a retail store on Rodeo Drive in Beverly Hills. They don’t have millionaire customers walking in everyday and they aren’t located in a retail district that pulls customers from around the world.
Finally, when I talk to community leaders who complain that recruiting retail businesses is difficult, I point out that a multi-focused business is the first thing to look for. This is because it’s always easier to grow an existing retailer in a community who’s already there, who already understands the marketplace and who’s already committed to the area. Yet you’d be surprised how many retail development professionals look first to import a new business or poach one from a nearby community.
Personally, when I see multi-focused business, I start thinking: “How can we maximize this business into a stronger Destination, or even two separate Destinations?”
So remember: If you’re ever at an economic development conference and someone gets up and starts showing photos like this one, it’s OK to chuckle.
Just realize that inside that business, a creative, risk-taking entrepreneur came up with something that no one has ever seen.
And that looks like untapped opportunity to me.