How to Evaluate Macro vs Micro Business Problems

What You Will Learn

 The Difference Between Micro and Macro Business Problems

 The Importance of Evaluating Both

 The Micro and Macro Problems That can Affect Your Business

 The Benefits of Properly Evaluating Macro and Micro Business Problems

by Marcus Business Team

So, you’re at a point where your business is hitting a few challenges. That’s totally standard and nothing
to worry about. But you do have a little homework ahead of you. Your number one job is wrapping your
head around the specifics of the problem so you can solve it. It’s much easier than you might think.
Marcus Lemonis always says: “You don’t have to be a genius to run a successful small business, but you
better be willing to learn.” So, this is an article that helps you do just that. You’ll take an up-close look at
a few external problems your business might eventually face, as well as learn the difference between
macro vs micro problems.

Macro vs Micro Business Problems

Here’s a tip for small businesses

Micro problems affect your business. Macro problems affect everyone's business.

These might sound like technical terms at first glance, but there’s a really easy way to think of macro vs
micro. Micro problems affect your business. Macro problems affect everyone’s business. That’s speaking
broadly, of course, but you’ll definitely want to get your bearings before you dive into the specifics. So,
just to put that another way, micro problems are what’s going on in your world. Macro problems are
what’s going on in the world. It’s important to be able to make this distinction, because as you’ll learn,
that shines a light on the road ahead.

5 Micro Business Problems:

1. Customers

When it comes to macro vs micro, a change in customer is a micro problem because it affects your
company specifically. The vinyl record companies gave us a great example of this when their customer
base transformed around 2010. Nielsen Soundscan, an aggregator of music data, reported that roughly
1 million vinyl records sold in 2007. But by 2012, that number soared to 4.5 million units. That’s an
absolutely huge pop in sales and worth looking into. It turned out the uptick was because young people
were buying records again. So, the vinyl companies knew they had a micro problem: their customer had
changed, meaning they needed to shift their messaging. Make sure to stay on top of your market
research, so you’re able to spot and cater to a change in your customer base.

2. Competitors

Similar to the above, when you have a disruptive competitor, that’s a micro problem because the
challenge is yours instead of everyone’s. Do you remember when Gillette came out with the Mach 3
razor and Schick responded with the “Quattro?

They were locked in a competition for the closest, smoothest shave. But then Dollar Shave Club burst
onto the scene and started competing based on convenience. They delivered razors straight to your
door, and what’s more, they did it on the subscription model so the re-ordering process was automated.
For Gillette, this was a paradigm-shifting micro challenge and one that required a strong response. As
Marcus likes to put it, “If you don’t evolve, you die.” Gillette picked the first option, then launched their
own delivery service to stay competitive. You can stay on top of similar challenges by keeping tabs on
what your competition is doing and making sure to respond.

3. Supplier

Like any relationship, your dynamic with a supplier can hit a rough patch. Has your supplier ever created
any quality issues? Have they ever been late on a delivery? Do they get so busy that they can’t fill your
order in a timely manner? Did they raise prices and eliminate your margin? Keep an eye on every single
aspect of this micro problem and that assessment will illuminate next steps.

It might be as easy as communicating that you can’t make any money at their current price and
renegotiating. But if it’s a quality thing they can’t seem to resolve, it might be time to move on. Also,
make sure you’re set up to switch gears if it really is necessary, especially if you’re in a hyper-specific
niche. When you’re selling a piece of equipment used in laser eye surgeries, for example, you can’t line
up a new supplier overnight. So, it’s good to know who’s out there. Don’t be afraid to shop around.
Marcus has a pretty nice way of simplifying these things when he says: “High performance, high reward.
Low performance, there’s the door.” Do your suppliers pass Marcus’ test?

4. Resellers

Similar to your suppliers, you also have a symbiotic relationship with your resellers. Do you sell your
product through retailers? Are they marketing your product in a way that represents your interests? Are
they pricing your product in a way that’s moving units? When a customer interacts with their sales
team, how often does that get you a result? You may need to take a hard look at this micro challenge to
build a clear understanding of what’s working. But don’t be afraid to look in the mirror.

When Marcus worked with a watch company in California, they set up a display case of watches that
would be placed next to the retailer’s cash register. Each of the 10 different watch styles represented a
specific charity where a portion of the proceeds would be given with each sale. The watch designs were
vibrant and modern but Marcus noticed that the case itself could use an upgrade. It didn’t resemble the
colorful look and feel of the watches. So, they reworked the display case in a way that showed off the
vibrance of the brand and the results were increased sales and a better outlook for the brand. They
learned the importance of always looking for ways to optimize the reseller relationship to keep it firing
on all cylinders.

5. Public Perception

When British Petroleum’s rig exploded in 2010, oil poisoned the ocean and BP had a serious micro
problem on their hands: public perception. Their reputation had taken a major hit and they needed to
make things right with the public. So, they responded in a few ways. They worked on cleaning up the
spill, committed $500 million to environmental research, gave billions of dollars in financial assistance to
numerous affected businesses, and spent time and money working on PR promising to do better. You’ll
likely never have to deal with a catastrophe this large, but it gives you an important reminder to factor
in public perception. Is there a way you can make things right and have you communicated that to the
public?

Keep in mind, sometimes you’ll have a problem with public perception even when you haven’t done
anything wrong. The animal shelters in Los Angeles ran into a situation like this when they realized they
were up against a common misunderstanding: rescue pets have behavioral problems. That’s not always
true. Plenty of rescue pets make amazing companions. So, the shelters launched a hilarious and
successful campaign detailing all the funny ways a rescue pet can surprise you. It’s important that you
know how the public perceives your company. If you’re open to constructive feedback, there’s always a
way to improve that dialogue.

4 Macro Business Problems

Macro problems, as mentioned prior, affect everyone instead of just you. They’re huge, sweeping
factors, and simply put, aren’t your fault. To some extent, everyone’s going through it. There are often a
few different macro trends in play at the same time, so their impact can be slightly abstract. But you still
need to keep an eye on these so you have one more valuable piece of information to factor in. Below
are a few big-picture shifts to monitor and a broad look at how they might have an impact on your
business.
1. Economic Factors

These include interest rates, exchange rates, a recession, or a change in taxes. A change in interest rates,
for example, might mean it’s more expensive for you to borrow money. An increase in taxes might mean
your customers have less expendable income and are willing to spend less on each purchase.

2. Demographics

This can refer to age, education, background, or lifestyle. If fewer people are going to college, SAT prep
courses take a hit. Whereas a drastic population decline in The Rust Belt might mean it’s a bad year to
increase your marketing spend in Akron.

3. Cultural Shifts

This is a nod to the general sensibility of the world. Whether things are moving in a more health-
conscious direction, or there’s more pressure for companies to be socially responsible, it’s always an
advantage when you know where things are headed. Is there a way you can use a “buy one, donate
one” model, demonstrate your company’s eco-friendly initiatives or donate a portion of your proceeds
to a worthy cause, for example?

4. Technology

This one speaks for itself, but it’s crucial to keep your finger on the pulse of today’s innovations.
Technology is moving at light speed and you don’t want your company to be left behind. If you own a
kiosk that makes physical copies of keys, for example, you need to be aware of keyless entry. Likewise, a
realtor whose competitor offers VR tours might want to start offering the same. Is technology phasing
out part of your business? If so, it may be time to diversify.

Again, the impact of macro problems can be slightly nebulous. But as Marcus would say, “You’ve got
this!” You’re more intuitive than you realize. Sometimes a common-sense analysis does the trick. If the
macro problem is big enough, like our culture slowly turning against plastic straws, you’ll obviously want
to start pricing out some paper options. But if interest rates and the tax code change at the same time,
you might not have the answers off the top of your head. That’s okay too, because you know what you
don’t know and can either read up or seek out an expert opinion, and prepare. When it comes to macro
problems, the devil you know is always better than the devil you don’t.

Macro vs Micro – Why It's So Important to Know the Difference

Let’s say your business is making money hand over fist, but out of nowhere, your sales tank for an entire
month. The last thing you want to do is start flailing around, reacting in an uninformed way, and
changing all the things you were doing right. Remember, everything was going great. Maybe it’s not a
“you” thing. So, you take a look at some big-picture factors and realize China started taxing American
imports and your price is no longer competitive. Congratulations. You’ve figured out it’s a macro issue,
which means you keep doing all the micro stuff that made you a winner, and all you have to do is shift
your international focus.

That’s the power of understanding the macro vs micro. It’s a more advanced form of troubleshooting
that allows you to keep what’s working and fix what isn’t. Think of it as another place to look for
solutions. But most importantly, when your business hits a snag don’t worry too much – just pick up and
keep going. In the words of Marcus, “People make mistakes. I know I do. But it’s how you resolve it that
matters.” So, be brave about acknowledging business problems, understand the macro vs micro, and
you’ll know exactly which areas need a little attention.

MARCUS’ CLOSING QUESTIONS

1. How does your business currently evaluate macro & micro business problems?

2. Are there any areas your business can improve in this area?