Startup co-founder Jim Sinegal is no stranger to starting a business. In 1983, he started Costco, a discount warehouse store that is now the 5th largest retailer in the United States and the 11th largest in the world. The business has annual sales of $1 billion and each Costco location averages more than $130 billion.
But what is now a large business didn’t start that way. Their growth came by following some simple rules that Sinegal shares with young entrepreneurs and those planning to open their business in the near future.
You Don’t Need the Swag
If you’re opening a spa, plush interior decorating may be required but for most startups, putting their limited cash resources in to expenses that matter is more important. Costco still has bare concrete floors and simple steel shelving but their no frills approach gives them the cash to negotiate better deals.
It’s all About People
Have you finalized your business plan yet? Even if you have, go back through it and add more customer service ideas. Business may be all about cost but it’s likely that your competitors will have a similar pricing structure making the experience you offer to your customers a way you can stand out. Don’t design your business around making a sale—design it around pleasing the customer.
If you plan to hire employees or work with partners at the beginning, quality matters. Find the best people you can and commit funds to paying a little more. Minimum wage employees with often perform at a minimum wage level and that’s not good for your business. Pay a little more, offer incentives, and show your employees how valuable they are and they’ll pass that along to your customers.
Take Care of Your Vendors
The price you pay for the products that you’ll sell often go down as you form strong relationships with your vendors. Try to stay loyal to a few companies, pay your bills early, and form a relationship with the sales associates. People like to do business with others that make their life simple and rewarding. Strive to do that with your suppliers and it will likely translate in to lower costs.
Costco rose to the top of the retail business market by holding on to core values as a small business. Regardless of your size, remember to take care of others before yourself. People may concentrate on price but businesses who don’t put customers, employees, and vendors before profit will struggle to survive.