as done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically remo

As the population of the world increases the basic needs of the population (food and shelter) are met with increasing ease. One result of this is that less of the population is employed in providing these basic needs. At the same time more and more people are living longer and in better health. A great majority of these people want or must work to keep pace with the ever-increasing cost of living.

More people living on less disposable income with less essential work for them to do coupled with more purchasing options from producers located all over the world selling through the internet adds up to the following:

1. More people are providing goods and services that do not fill needs; they fill “wants” which skillful marketing has transformed into necessary for us to be happy. Does any man go even one day longer between shaves when he uses a razor with five blades instead of one? So when we shop for any of these non-essential “wants” (dinning out, vacations, clothing, entertainment, etc.) we tend to look more closely at the perceived value - which means we shop for the best price.

2. The “new” products and services brought into the market are largely variations of goods and services, which already exist. For them to be successful they depend more on presentation than meaningful features. This translates into skillful marketing concepts (zero down payments, extended warranties, longer payment terms, more style changes, more meaningless features.)

3. The intermediary in the distribution process has changed from “mom and pop” stores to major retailers with revolving door clerks and the manufacturer has done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically remov

people living on less disposable income with less essential work for them to do coupled with more purchasing options from producers located all over the world selling through the internet adds up to the following:

1. More people are providing goods and services that do not fill needs; they fill “wants” which skillful marketing has transformed into necessary for us to be happy. Does any man go even one day longer between shaves when he uses a razor with five blades instead of one? So when we shop for any of these non-essential “wants” (dinning out, vacations, clothing, entertainment, etc.) we tend to look more closely at the perceived value - which means we shop for the best price.

2. The “new” products and services brought into the market are largely variations of goods and services, which already exist. For them to be successful they depend more on presentation than meaningful features. This translates into skillful marketing concepts (zero down payments, extended warranties, longer payment terms, more style changes, more meaningless features.)

3. The intermediary in the distribution process has changed from “mom and pop” stores to major retailers with revolving door clerks and the manufacturer has done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically remo

day longer between shaves when he uses a razor with five blades instead of one? So when we shop for any of these non-essential “wants” (dinning out, vacations, clothing, entertainment, etc.) we tend to look more closely at the perceived value - which means we shop for the best price.

2. The “new” products and services brought into the market are largely variations of goods and services, which already exist. For them to be successful they depend more on presentation than meaningful features. This translates into skillful marketing concepts (zero down payments, extended warranties, longer payment terms, more style changes, more meaningless features.)

3. The intermediary in the distribution process has changed from “mom and pop” stores to major retailers with revolving door clerks and the manufacturer has done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically remo

xist. For them to be successful they depend more on presentation than meaningful features. This translates into skillful marketing concepts (zero down payments, extended warranties, longer payment terms, more style changes, more meaningless features.)

3. The intermediary in the distribution process has changed from “mom and pop” stores to major retailers with revolving door clerks and the manufacturer has done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically remo

as done away with its dealer or representative network, and moved into direct selling. And the purchase and the guarantee are no longer covered by a handshake but by a multi-page series of documents. (Has anyone seen an unconditional guarantee recently?)

The backbone of the small businessperson, the relationship they could establish between their business and their customer has been systematically removed from the marketplace. The transaction has become the buyer’s highest priority.

What can the entrepreneur do? Where should he or she concentrate their efforts to make their business successful?

Without a truly unique product or service one must concentrate on controlling costs. One way to do that is to vertically integrate.

If you create a low cost culture in your business you can bring the goods and services you provide to the customer by providing “real” value, not perceived value. When you focus on continuing to lower costs and passing on the results through lower prices, you can effectively compete and win.

How do you lower costs?

Do a cost analysis on everything you make or provide. This effort will show you where you make the most money and where you make the least. If you must continue to provide the low profit item, start looking to buy it from somebody else or start offering it to your competitors who may be in your same situation. Higher volume may enable you buy it cheaper than you can make it or sell it cheaper than the other guy can make it.

This same analysis may help you find high-cost elements in a complex product or service that you could farm out to a specialist for less cost.

This all comes under the label “outsourcing.” You may not have to send your work to a third world country; you may accomplish your objectives by shopping harder in your own backyard.

The Big Three fell on hard times for a number of reasons, but a major contributor was the fact that they never adopted a low cost culture where it counted. They beat up their suppliers who were free t