30 Apr Does Your Business Need to Narrow its Focus?
On the TV show Restaurant: Impossible, host Robert Irvine fixes failing restaurants in two days on a $10,000 budget. He helps improve cash management, décor, and ownership issues.
One thing he consistently does each episode is reduce the size of their menu. When there are too many items on a menu the restaurant normally relies on more prepared food than cooking from scratch. And there is rarely a core competency.
From what I’ve seen on the show, he does this for several reasons:
- Distinctiveness: Visitors can get the same quality of prepared food at Costco or grocery store.
- Costs: Cooking from scratch is normally cheaper than buying prepared foods.
- Waste: It’s hard to manage food costs because of spoilage when you have to guess when diners will be ordering the less popular dishes.
- Employee motivation: The cooks are more motivated by preparing good tasting food.
The successful clients I’ve worked with a lot of different business owners over the last 16 years have a narrow focus. They know what they are good at and what is profitable.
I’ve evaluated my own business this way. Last year I nuked several things from our website because I didn’t feel comfortable offering certain services, like graphic design. We have been good at the service in the past but I didn’t feel comfortable offering it any longer. I want to concentrate on search engine marketing and website design.
Here are the questions I asked myself:
- What are the services we are really good at?
- What services are making us the most sales and highest margins?
- What services should we nuke that aren’t profitable?
- What services should we nuke that we don’t like to do?
- What services get us sales but we aren’t that good at it anymore?
Is it time to pare down some of your service offerings? Doing so will likely make you more profitable and even improve your main services. All of this applies as well to your business if you offer products, not only services.
It comes down to three words: could, do, and should. What services could we offer? What services do we offer? What services should we offer?
You need to concentrate on the should and put aside the could and the do. It’s going to take some discipline and boundaries to do this but you’ll be happier and more profitable. Some of your employees might not like it but who’s signing the check?
So, here’s some homework for you.
One, answer the questions above. It might mean digging into your accounting software to put some hard figures on the profitability of your products/services.
Two, consult a professional business coach. They are trained at digging into businesses to help them figure out what’s working and what isn’t. They do this with an objective, unbiased eye. The most important thing with a business coach is to actually do what they say.
It would be nice to have someone like a Robert Irvine come into our business. Most of us don’t need to blow up everything and start from scratch. But now is a good time of the year to look at your service offerings or products.