If everything is a top priority, then nothing is a priority, and nothing will get done. This is a tough lesson, but all successful business owners eventually learn it. Many startups are particularly susceptible to the idea that they can serve this market, and that market, and those people over there, and these groups over here, until their message and brand become so confused that nobody knows what they stand for or who they actually serve. When that happens, the message becomes so confused that the business usually fails.
Many established businesses have a reasonably well-defined target market and brand, but can’t decide what their other priorities are. Should they focus on customer service, or product quality, or sales, or marketing, or innovation, or something else? Obviously everything matters to some extent. No company can stay in business without reasonably good sales, marketing, products, customer service, etc. However, while great companies have to be good at many things, they only have to be great at one or two things to really stand out. This is one of the themes of the classic book “Good to Great”.
Tesla went from a wannabe niche car company to the most valuable car company in the world (by stock market capitalization) in less than a decade because they excelled at one thing: innovation. In December 2020, their market capitalization hovered around $600 Billion, more than all the other major car companies combined. While their stock price is probably going to come down to earth at some point, Tesla is clearly a very valuable company. Tesla has shaken up the car industry.
General Motors, on the other hand, used to be the most valuable car company in the world, but now has a market capitalization of under $60 Billion. GM lost their focus, gave up on innovation, and despite a huge bailout after the Great Recession, is still struggling to become relevant.
At Ground Floor Partners we focus on small businesses, so any discussion of giant businesses such as General Motors may seem silly. But focus is even more important for small businesses than it is for large ones. Large companies have the financial, management and operational resources to diversify. They can form different divisions and product areas, each with its own focus and core positioning. Small businesses don’t have this luxury. They have to focus like a laser (ok, maybe a flashlight) on a few, clearly defined areas. In fact the narrower the target market, the positioning and messaging, the better.
Whatever industry, sector or market segment your business is in, take some time to sharpen your focus. You can’t simultaneously be a non-profit and a for-profit. You can’t sell products to everybody. You can’t be the the fastest, the cheapest and the highest quality all at the same time. You can’t emphasize the triple bottom line, pay your workers a low wage and close your eyes if your suppliers are destroying the environment.
You have to choose.
Who do you want to serve? What are your values? What are your priorities? What are you great at?
When you can honestly answer these questions, you have something to build on.
- Time to Start Something New? - April 29, 2021
- Focus On … Something - December 16, 2020
- Business Planning for Success - August 14, 2020
- Where Do We Go From Here? Small Businesses and Coronavirus - March 23, 2020
- How International Conditions Can Affect Your Small Business - February 15, 2020
- Selecting the Right Firm, or What Could Possibly Go Wrong? - December 10, 2019
- Should You Scale Your Business? - July 17, 2019
- 15 Tips to Protect Your Small Business on the Internet - May 30, 2019
- Bright Shiny Object Syndrome - May 17, 2019
- Interview with Cecelia Hamilton - April 8, 2019