clientele can mean expensive marketing (continually having to acquire new clients) and might not provide sufficient stable income. So, he might wisely decide to also offer ongoing garden maintenance—business #2. Since he doesn’t live in a sunbelt state, his business is seasonal. So he also offers snow removal—business #3. Eventually, some of his customers ask him to install and remove their outside Christmas decorations. Since that’s more predictable than snow removal, he adds and starts marketing that service. Business #4.
Adding each of these “businesses” makes sense, but it can make an entrepreneur schizophrenic. After all, our hypothetical landscape designer really wants to be creating inviting gardens, yet he spends part of his time fixing electric lights on reindeer on rooftops.
While I’m not dealing with twinkling Santa Clauses, I face the same dilemma. I own and run a publishing company. That’s my primary source of income. Business #1. But I’m also a speaker for conventions and conferences. Business #2. Taking up a lot of my time is writing books. Business #3. And you thought all I did was lie in a lounge chair by a pool, sipping a tropical drink, effortlessly typing out 700 words of expertly crafted business insight for my weekly newspaper column. Business #4.
I’m a big believer in finding a niche and sticking to it. As a business strategy, being highly focused makes it far easier to succeed.
But, you don’t want to have all your eggs in one business basket. If you’re too dependent on one client, or even one product line, you’re very vulnerable if there’s a change in that market.
What’s an entrepreneur to do?
Your Mission Statement
“If you don’t know where you’re going, how will you know when you’re lost?”
A Mission Statement is a written document that makes clear what your company does, and where it is going, and enables everyone involved in your company to share and understand the mission.
A Mission Statement doesn’t have to be long. Sometimes a relatively brief one sums things up best. By selecting a very small number of items, you send the message that these are your company’s highest priorities.
The key elements of a Mission Statement:
A Mission Statement only achieves value when management and employees use it as a touchstone. Share your Mission Statement with all those who have a stake in your company: employees, customers, shareholders, even suppliers and distributors. You want them all to know what you’re trying to achieve. Of course, nothing proprietary should be included in a Mission Statement.
Keep in mind that your Mission Statement can evolve over time. As conditions change in your industry, the economy, or your management style and beliefs, you can go back and re-examine and revise your mission.
Developing Your Strategic Position
During my first few years as a management consultant, I helped business owners learn to improve their operations and marketing. I helped entrepreneurs learn how to increase their profit margins and design more effective brochures. In other words, I helped them with the nuts and bolts of running a company. Over time, I realized that nuts and bolts aren’t enough.
In today’s increasingly competitive and constantly changing business environment, it’s not enough to know how to run a business. You have to have a clear understanding of what business you’re really running. You need to find a way to meaningfully differentiate yourself from the competition and create a bond between you and your customers. What you need is a clearly defined strategic position.
Today, defining a strategic position is as important for the proverbial “mom and pop” small business as it is for a high technology company. I learned this from one of my very first clients, a florist. Although this business was located in a neighborhood storefront and might be perceived as just another “bucket shop”—a place where people pick up a dozen flowers on their way home from work—in fact, they specialized in exquisitely designed arrangements for high-society weddings and events, often importing unique flowers from Europe or the tropics. On any given day, however, you might walk into their shop and not be able to find so much as a dozen roses or daisies. They didn’t try to be all things to all people.
This type of positioning better equipped my clients to deal with increased competition as both supermarkets and discount warehouse stores began selling cut flowers. They were clearly different from their competitors.
A strategic position differentiates you from others. It shows you have something to offer that’s unique, special, and difficult or impossible to replicate. When defining your company’s strategic position, look at:
After a few years in business, I had to struggle with defining my own strategic position. I had been doing a wide variety of management consulting, taking whatever came along. But just hanging up a shingle and saying, “I’m a management consultant” was like the florist who says, “I sell flowers.”
