To Build a Great Company, Focus on Your Strengths
What does your company do better than anyone else – or at least better than your main competitors? What are you known for? In which category do you have top-of-mind recognition in your market? What are your strengths?
Some companies get distracted; they fail to focus on the answers to these questions. Blackberry lost sight of the fact that their strength was robust security and durability – a definite advantage for businesses. They got pulled into the consumer market, a misstep that has cost them dearly.
As you consider the transition or sale of your business, think about the ‘secret sauce’ that has been the foundation of your success. Is it a special skill-set that your team has developed, which enables you to fix problems no one else can? Is it a specific product line? Is it the way you treat your customers? Why do your customers continue to buy from you?
If you’re not sure, you should find out. Ask. Ask your best customers why they have stayed loyal and continue to buy. Ask them if they would still be loyal if you were no longer owner and manager. If they hesitate, you have a problem. If you are the main reason your customers spend money, then the value of your business as a separate entity may not be worth very much. How do you sell a business that exists because customers are loyal to you? You may need to train, coach and mentor others so they can gain a similar level of trust and loyalty.
Knowing your strengths can be a challenge when you’re focused on the day to day. Feedback from customers, suppliers and employees will help. Ask them. A review of your sales could be revealing. You may find that Pareto’s law is alive and well; 80% of your sales may come from 20% of your product line or services. Further, you may find that 80% of your revenue comes from 20% of your customers. If that is the case, analyze your top customers and the products they are buying (we call this process Profitable Client Strategies) and focus more of your time, energy and marketing on those critical few instead of the less important many.
When your company is good, know why it is good, and continue to refine its areas of strength; you’re more likely to increase your profits now and make yourself more attractive for acquisition when you’re ready to sell.
October 2, 2014
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