You may hear a lot about how your business is different — what you bring to the table is unique. And I join in the chorus on that… You are Unique — just like everyone else. <wink>
But, before you revel in your uniqueness, you need to understand how you are the same.
Your differentiation comes at the end of the process. Before that, you need to understand the commonalities.
In the Dot Com Boom (mid-to-late 90s) savvy business people were asking the tech companies how they were going to bring in revenue, get paying customers, and make profits. Their answer was what they called “The New Economy” — tech stuff didn’t follow the rules of The Old Economy.
Of course, the Dot Com Bust (2001) reminded everyone that there is no such thing as a New Economy… or an Old Economy. There are just economic principles that can’t be crossed, although they can sometimes be postponed.
I’ve had people ask me how I can work with certain businesses if I haven’t specialized in their area of industry. They ask because they don’t understand the commonality of businesses.
Every business — even the illegal ones — have certain things in common.
What are some of the commonalities?
· Customers – Every business has to have people who are willing to pay for the goods or services (or both) that the business provides.
· Expenses – Every business has expenses. And those expenses MUST be LESS than the money the customers bring in. At least over the long haul.
· Profits – the net effect of revenue (the money from customers) and expenses. You want more revenue than expenses.
· Cash flow – you have to have enough money coming in to pay the expenses (including a living for the business owner) each month. Even if a business is going to be making more money than expenses when the customer pays, if they are slow paying, the business can go bankrupt even though it is “profitable.”
There are a few others, but they are minor compared to these.
Every banker, lawyer, doctor, manufacturer, retailer, wholesaler, baker, restaurant, massage therapist, coach, counselor, dog washer, craftsman, artisan, writer, consultant, multi-level marketer, and on and on (do you get the picture?) has to have these. And every one of them has to have these things under control if they want to stay in business.
Do you know how many of them think they are immune to the economic principles? Somewhere between two-thirds and three-quarters. Do you know how many actually are?
That’s right. Zero.
Before you start worrying about differentiating your business from all your competitors, make sure you know how you are going to achieve the commonalities, first. Until you know that there are enough customers who are even interested in buying from you and your competitors, there is no point in differentiating yourself. Because if there aren’t enough customers to start with, even if they all come to you, you still won’t stay in business. (Remember profits and cash flow.)
If you haven’t figured out expenses (and controlling them), profitability, and cash flow, there will be no business, no matter how different you are. At least, not for long.
Once you have the basics down, then by all means it is time to figure out how you are different from your competitors… different in a way that will cause customers to want to buy from you instead of from your competitors. And then, you are on your way to fulfilling the commonalities above.
Or perhaps you have a different take on it. Go ahead and tell us your view of it (use the comments.)
Are you struggling with the basics for your business? Perhaps we should talk. My clients have discovered the way forward with the basics and with the next steps, as well. The industry is less important than the fundamentals (basics). Contact me and let’s see how I can help you achieve the success in your business that you are looking for.