The U.S. economy has now turned the corner and is in a hesitant uneven recovery. It is not boom times yet but there is enough encouragement that business owners are now looking at how they can grow their businesses.
They could just sell more of their existing product or service but that can be very challenging. How about thinking differently and invest in your assets? We recognize that we are suggesting this against a back drop of coming off a really challenging recession and a diminished risk appetite. However, to get meaningful growth you need to invest in assets because income follows assets, albeit normally in 12 to 18 months. If we agree that the economy is recovering then we need to invest now to take advantage of the upturn.
With this in mind and to get business owners thinking differently we ask them “What are you really good at and not being paid for?” Personally I have found that the conversation then normally takes one of three directions:
- It helps them crystallize what their secret sauce is, which in turn could lead to developing a cut through product or product extension.
- It helps them repackage their existing offerings.
- It starts them on the journey of reconnecting with why they started the business.
Now let’s look at each one in more detail with a relevant case study
A wholesale distributor with a focused product offering was finding it challenging to increase sales. On closer examination they are really good at executing and processing orders in a timely and fault free fashion for their clients plus giving them instant feedback in status and advice on best sellers etc. They were able to do this because of their continued investment in technology. Their secret sauce is that they are system innovators but they were not being paid for that.
However, this is what the customers were buying! So now they are utilizing the platform to offer a wide range of products (product extensions) and also looking into being a fulfillment house for other wholesalers (product innovation and channel extension.)
What about repackaging existing offerings? It might surprise you that 95 percent of all product innovation is pricing and packaging! Whether it is Apple at the high end of the value chain able to get a premium because of their sleek design and simplicity or at the other end of the chain Turbo tax that is offering tax preparation on-line at a discount to traditional tax preparers.
In fact as the Internet continues it rise to dominance many industries/professions are being impacted and are repackaging their offerings. Nowhere is that more apparent than in professional services. As an example look at Rocket lawyer who offer a blend of services. The base product is providing documents on line for you to complete but at the next level you can also talk to a lawyer on line if you have questions about how to complete the documents. Finally if you want a customized document then they have lawyers standing by only too delighted to work with you on that.
Lastly, and this may surprise you, we often find that it reconnects a client with their vision when they started in business. Recently we were having a discussion with a client and the discussion turned to the value of their culture. It quickly became apparent that they were most productive and profitable early on in their journey because everyone got on and the culture was aligned with the vision of the founder.