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Focusing Your BusinessI recently read the book, Focus—The Future of Your Company Depends on It, by Al Ries. Though the author gets a bit repetitive about companies that aren't focused, it's difficult not to see that the most profittable companies are ones that have a focus to their business. They aren't diversifying their products into industries they have no business getting into. There are two main reasons it seems companies diversify. One, they buy companies that seem to be good complements to their product. The problem is that there is usually a large learning curve in getting into these new industries and the time (and money) spent takes away from their main products. Two, they don't want to put all their eggs in one basket so they branch outside of their expertise. Again, this is a drain on their time, energy and finances. In hedging their bets by diversifying they make themselves more unstable. One solution is to stay in the same industry and develop products that are similar in focus. If you develop the new product you should change the name of the new company, much like GM did when they developed Saturn. One mistake GM made was trying to create new products within the same name, like making less expensive Cadillacs. They were a dismal failure. I saw one the other day and if I hadn't seen the emblem on the front I would have assumed it was a Buick or a Toyota. They would have been better off staying in the high end market with the Cadillacs. So when your company is considering branching out, look to develop products within your same category. If you must go outside your own realm of expertise, develop a new brand with a new name. As I've developed my own business, I am focusing on fewer and fewer things. I still offer hosting and maintenance of Web sites, but I'm not focusing on that. I'm even considering focusing less on Web design and focus more on email marketing as a way of promoting your Web site. One reason I'm considering this is that you can hardly swing a dead cat without hitting a Web designer (though I think it would be harder to hit a competent Web designer). I might move into just doing Web site analysis along with the email marketing. We'll see as I move forward. In the meantime, read the book I recommended and start focusing your company and your life. ***** © 2001, Dave Carlson, All Rights Reserved |
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5808 S. Rapp St., Suite 235 Littleton, CO 80120 - in the Denver Metro area - 720-922-3124 |
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