The 5 Mile Radius Rule for Your Local Business

hey bad ass business owners welcome to another episode of the local small business coach podcast where each episode we work on getting you to $100,000 in take-home pay so if you're all ready to boost your profits increase your sales improve your processes and develop stronger teams so you can stop living chopped a job and let's dive in hey bad ass business owners how's it going alright I want to actually had a question a couple of times this week with folks that I've been coaching and talking to and it has to do with their business and where they should be doing business you know obviously I'm a huge fan of our local communities that's who I target that's who I want to focus on and that would be the majority of you now part of that is our communities look very different for some of us we have communities where it's a smaller town smaller town could be anywhere for 50,000 people on down some of you are in town that I've talked to you have downs of like 10,000 people some of you live in communities where there's you know hundreds of thousands of people and it's pretty large and it goes pretty big but when here's the thing when I say local what I really want you to focus on is in the local area that you live in so even though you may be part of a bigger town you don't necessarily need to serve that entire town so for example I'm in Arizona so obviously Phoenix Metro is huge the City of Phoenix is small but the actual when people think of Phoenix it's pretty big there's the west side the east side you can go north you can go south it's pretty big and you'd be foolish to try to serve everybody now that said that's if you're a solopreneur if you're by yourself trying to do that business that is crazy now if you're trying to scale your business into becoming you know a hundred thousand two hundred thousand a million dollar business then yeah you're gonna put crews in the different areas of that valley or that area and be able to do it you know I lived in California same thing with Sandy San Diego is huge you got the North Valley you got down south you know same thing you got little towns inside at the end of the day what you want to focus on is small and then grow from there what I don't want you to do which is what a lot of people do is they chase sales everywhere people will call them up and say hey did you go to X town and X town happens to be 30 minutes an hour away and because we need money and because we need the sales we tend to chase those sales but by the end of it if you actually ran the numbers for that job most of you are going to make little to no money and you probably turned away a local job in your community that would have made you a heck of a lot more money so it actually lost you money it cost you money because while you made I'm just gonna make up numbers may you may have made you know $50 on that particular job had you had it open spot for somebody local it may have made you $100 in which case it costs you $50 for that job I really want you to to to look at the area that you service and are you just chasing sales versus focusing on your area and driving and growing the sales within that community now you probably noticed that when you look at big-box retailers or bigger companies especially well focus on big box retailers if you will or any kind of type of store have you ever noticed that some time and in fast-food dozens as well for example in my little town we have 50,000 people it's still a smaller town we are growing but we have three McDonald's and people joke around and laugh that we have three McDonald's and they make fun of that but guess what all three McDonald's are always busy and the reason that they're busy is they service three different areas of town now could you drive over to the other McDonald's and it'll take you an extra five minutes yes but that's not what we want we associate fast-food with being able to get what we want when we want it as quickly as we want it fast-food companies know that so if they create the need from us for example we want our Big Macs we want our fries we want our whatever we want and we have that craving and we want to get to it as fast as possible this is also true of for example Starbucks a lot of you guys out there drink Starbucks if you drink Starbucks you probably also have a lot of Starbucks in your area we have three Starbucks in our town we have them in stores as well as we have a brick-and-mortar piece of it and the reason is when someone's shopping they want you to really hacks and enjoy yourself and have that Starbucks within now the Starbucks that's inside the grocery store knows that it's not going to get the people that are riding around driving around and everything else that even though they're going to drive right past it they're not necessarily gonna go park in a parking lot and go inside that store they know that their ideal customer for that particular Starbucks location are the people shopping and that's who they're going for now is there a small part of that those sales that come from people that specifically drive their for it absolutely and for the longest time that's what you had to do here in this town before we had our brick and mortar type standalone one you actually had to drive to the grocery store and get out of your car go inside go to the bashes and then you can get your your go up to the counter and be able to get your Starbucks but well my point is the reason they have multiple locations is so that because they know there's a plenty of business within a certain mile radius of each of those locations even if you take a big-box retailer same thing you know if you take a Home Depot you probably can find one every 30 miles or so unless you are in the boondocks yeah in the boondocks they know that that particular store is mile radius because the populations are much smaller they're going to get people that are going to drive two three four hours but that's common because of how large of a landscape that they are servicing the smaller the town they obviously know they need to pull from larger locations but for the vast majority of you in your particular business odds are you do not need that drive hours a day trying to find the ideal customer what I want to challenge you to is to use what's called the five mile rule and the five mile rule is you should have plenty of business in your community within five miles of your location if you to have a brick-and-mortar location typically a brick-and-mortar is going to pull within five miles of their location but as a service based business your 5-mile radius is going to be where you live look or if you farm a specific area so what I want you to start thinking is going okay when you sit back and you actually look like get a map go to Google Maps looking on your your phone grab a physical map whatever it is and I want you to draw out five miles and make a big giant circle from your location and I'm gonna bet you that you're going to find hundreds and hundreds and hundreds and thousands of homes within that five-mile radius so for example even in my town if you do a five mile radius you're still going to pull up I want to say 10 to 12 of our subdivisions will be in that five-mile radius with an average you know anywhere from 800 to a thousand homes guess what that's that's almost what 10,000 homes within that particular area now each of you once again you're gonna be a little different I understand that some of you're gonna have a lot of home concentration some of you're gonna have a lot of business concentration but what I want you to do is ask yourself because you have to continue to dive that down because part of it is how many homes and locations but even that doesn't matter it depends upon what you specifically do for example if you are a handyman you definitely can stick to your 5-mile radius for the vast majority of everything that you do there are plenty of houses for you to be able to service you don't have a customer problem you have a lead problem okay there's a difference there are plenty of customers for a handyman within a 5-mile radius if they don't have a lot of business they have a lead generating business it's because those people that live within that 5my 5-mile radius don't know they exist or they don't know that that handyman can solve those pain points that they have now if you happen to put garage doors on and you happen to be in a community full of carports then obviously that's going to be a much difficult and more difficult you're gonna have a bigger difficult time finding people that want to put garage doors on unless all of a sudden your specialty is converting carports into garages in which case you have a plethora of homes that you can service so you can see the difference whatever you do whatever you specialize in you've got to ask yourself are there plenty of people I'm not telling you and I want to go back to what I said a few minutes ago because it's very important you hear this it's not about are you getting the business within that five mile radius today do you have the potential to get the business to if you could if you could wave your wand are there plenty of homes within your five mile radius that you would have all the business that you could want until the time comes for you to be able to expand your business if the answer is yes you have a marketing problem you have a pain point problem you're not explaining to people the pain points that you solve and that why they need to use you if you're a bakery and you're in the middle of a commercial real estate guess what you're not going to be selling a lot of necessarily birthday cakes and stuff like that as much as you might be making cakes for that radius around there for people doing events and stuff like that but you could now that I'm thinking about it you absolutely could because you can solve those people that are busy hardworking working in that commercial stuff that have no time and they can't get to a grocery store before they get home but they can run by you the bakery that's in the middle of their area so there's a way to think about you just have to change what pain point you're solving so I don't want you to keep thinking that you have to drive all over tarnation I'm telling you you are causing yourself to lose so much cash and so much profit in your business by doing that you need to focus on that ideal client who is in that ideal customer who is in your five mile radius you need to tweak the way that you're marketing to them you need to change and tweak the the pain points that you're solving all right because the more you drive outside of that five mile radius all you're doing is costing yourself time gas profit other people that you could be helping there's so many negatives that we could sit down and discuss that you're throwing away by trying to just drive all over tarnation not to mention the fact that you have long as days you know what you're working hard you know what you're you're frustrated because you're having and if you haven't forbid if you have to come back and get something else and you got to backtrack a bunch of miles to be able to get something it's just it just none of it makes sense and I was saying just because you can doesn't mean you should and here's the problem with a lot of you just because you can drive 10 15 20 miles to help serve somebody doesn't mean you should I want each and every one of you who is serving larger than a 5 mile radius to ask yourself why why are you serving outside of that because honestly once majority of you know if you have a business that you take it to them you have to say ok it's because all the businesses outside of that 5-mile radius I do events therefore I have to go outside of that 5-mile radius ok that is probably true now then you have to ask yourself going ok but how much of that is true is that 100 percent of your business or are there customers within your 5-mile radius that also could use your services your events are there places within your 5-mile radius that you can set up your business and still serve those customers I just I don't want you to pooh-pooh it and say all of a sudden that won't work Tammy you don't understand you don't understand my business ok just pause for a minute and ask yourself in an ideal world if you could looking at where you are within your 5 miles what would have to happen to make it true that you could run your business within that 5 – ok that's what I want you to do instead of just saying no it's not going to work ask yourself what would have to be true in order for you to be able to make that work what resources what people what pain points would you have to solve how would you need to communicate with people of whatever the case may be you know part of this whole thing and what we're trying to do and I'm gonna fill you in on the next episode about a video that I actually just put together and it ties until last week last week's episode about know your numbers is that a lot of times what happens is we do things because we think that we need to do them that it's the only way we're going to get our business and what happens is you guys work more and more hours in more and more hours well every time you work more and more hours and you're not necessarily getting more profit all you're doing is diluting how much it is that you make an hour and if you're working more and more hours and yes you are getting more profit but if you're getting the same type of profit all you're doing is working more hours you're not earning anymore it's like somebody who goes to work for $10 an hour who picks up five extra shifts and our five extra hours of work but they're still making the same ten dollars all they're doing they didn't grow they just worked more hours they just worked harder they didn't necessarily work smarter where as opposed to somebody that can say okay I'm gonna work fewer hours but I'm gonna get a raise I'm gonna increase how much I get per hour guess what they can work the same number of hours they're not having to work harder they just have to work smarter at what they do to increase their value to make themselves go from ten to twelve dollars an hour hopefully that makes sense but for a lot of you guys who want to expand the cities that you service I really want you before you go doing that asking yourself do I need to do I have enough business within my five-mile radius that I'm not taking advantage of today and what needs to be true in order for me to grow that business within that five mile radius do I need to change what it is that I offer you know if you keep trying to shove a square peg into a round hole and it's not working for you maybe you need to step back and say wow I didn't realize this I need a round peg to go in this round hole so maybe the services that you're offering don't fit your community all right maybe you need to change the services that you offer so that way you can service more people within your five-mile radius maybe you need to change what it is that how you're communicating to it you know what for most of you if you were just to take one for your job if you were just to take once to two subdivisions and really concentrate your business and own those subdivisions you would have plenty of business you know it it you know what happens as we run all over town and run all over the place to be able to get the business but what if whatever you did you focused on a community and really built that business you know ones that just popped into my head is let's just say you have a dog grooming business probably cuz I took my dogs to the groomers but if if you have a dog grooming business you might think I got a pull from all over the town to be able to do that but I'm gonna bet that in any subdivision that has say let's just say a sub vision has a thousand homes how many of those thousand homes have dogs probably at least half right if not more I would probably say more let's just say half have dogs so now we're down to 500 dogs now I'm gonna assume that of those 500 dogs will assume that they probably all need to get grooming that doesn't necessarily mean everybody would grooming but maybe we need to talk about why they need grooming maybe we need to find out what type of grooming it is but let's just say there's 250 dogs let's just say half of the half need to have a dog groomer that's 250 potential dogs that you could be grooming with in that particular subdivision we didn't even leave the subdivision we just took a thousand homes to five hundred homes with dogs half of those dogs being able to be groomed that's 250 dogs just waiting for you to be able to groom them and if you think about it and then you just stack at the next subdivision but you've got to get it down for that particular subdivision instead of shotgunning the entire city shotgun you know focus and rifle approach on a particular subdivision and how you can grow your business there because guess what those people are gonna love what you're going to do and they're gonna turn around they're gonna tell their friends and neighbors and family that are in the other subdivisions to use you and it's gonna help you grow your business so you can see there's so many reasons why you need to focus on your local communities and specifically within that 5 mile radius and you're gonna be shocked at how much business that you can drum up by doing that ok I've done giving my lecture but I can tell you that I think that if you just make this simple easy tweak and really focus your energy in the right way no longer would you have to drive all over tarnation to get business you don't have to continue to chase business into other cities or into other areas of your town that are further away until you are ready to do that because then what you do is if you can because here's the thing you know some of you wanna know how do you grow broody big here's why if you really nail that 5 mile radius then all you have to do is duplicate what you did in the next 5 miles duplicate that for success then duplicated again in a different area and guess what next thing you know you're taking over everywhere but you're doing it systematically you're doing it with a plan you're doing it with the crews that are trained on how to do it and you can continue to grow your business from there but if you just try to go all over tarnation and you never really get really good at owning a particular community or a specific area you're going to struggle because you're going to grow way too fast before you're ready before you have the systems in place get the systems in place get your communities right get your marketing right get everything right and guess what you're gonna find that for you to be able to grow and expand your business it's going to be ten times easier all right with that I'm gonna go ahead and wrap this one up but hopefully this helps some of you guys focus your attention in the right direction all right with that I am going to talk to you on the next episode and by the way I'm finishing up a video for what y'all talk about because our next episode has to do with no you're never series every Thursday we talk about that and I just put something together that I think it's kind of fun for everybody all right and I do want to talk about your numbers a little bit more because some of you have been frustrating the crap out of me and in a good way I'm not mad at you but I'm gonna talk about that on the next episode so come join me over there and as always oh you know what no I'm gonna end it here cuz I really want you to focus on your areas I don't want to throw too many things that you focus on your five mile radius I'm gonna end this because I'm just gonna rattle on to about other things I don't want to do that I want you focused your I want your brain leaving me today thinking about your five mile radius and how you're gonna attack and grow your business within that five miles and what you need to do alright go do that don't don't listen to another word I say just focus and put your brain and wrap around that how you can grow your business within your 5 mile radius bye get out of here go hey badass business owners before you go just one thing if you ever feel like you're alone and you would love to be with a like-minded group of individuals head on over to our badass local small business owner Facebook page we have no spamming no advertising anything like that just your questions mine and we just kind of help each other out grow our businesses and share knowledge you can feel free to know that you're in a safe place and ask your questions and people that are actually gonna care about you so once again head on over to Facebook it's the badass local small business owner page you can also hit the show notes and it's right there once again it's gonna be stuff and people out there that care about you and helping you grow your business

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