How to Evaluate Macro vs Micro Business Problems

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.

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.

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?”

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.

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 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?

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.

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.

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.

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.

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.