Does a doctor who owns her own practice run a business? If she opens an office and treats patients, then no, she simply owns her own book of clients. If she opens an office, acquires patients, hires more doctors, reduces her practice hours, opens more offices, and manages those instead, then yes – she’s running a business.
THE BIG QUESTION
Business owners need to ask themselves: “Do I want to use the skills I have to earn an income? Or do I want to increase my capacity to make money by catering to a market niches, regardless of my personal skills?” The answer indicates whether they are a Lifestyle or Growth CEO, and how they should position themselves in the market.
Sometimes, business owners pigeon-hole themselves into one of these categories without meaning to, and wind up on the Great Small Business Plateau. I work with a client who analyzes data in the radio industry, to help stations improve their ad sales. He thinks of himself as being directly associated with radio, and calls his business a “radio company.” Anyone outside looking in would say, “No, your clients happen to be radio stations.” His services could be as applicable in television, digital media, and other industries, but he positions himself in radio because it’s comfortable. He is limiting his own business, rather than diversifying his client base and growing.
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For growth companies, there is an ever-expanding batch of markets to explore as you grow. If you’re stuck looking at one product, one skill set, one type of clientele, your growth potential is limited.
GOOD AND BAD EXAMPLES YOU’LL RECOGNIZE
We see this all the time. Blockbuster was a movie rental company; that was their model, and they were sticking to it, even when Netflix came along and took all their customers. Hostess preferred to continue making unhealthy food when consumer tastes were trending towards healthier. Neither could look to the periphery and see the next opportunity.
The company 3M presents a good example of the other side. Founded in 1902, as the Minnesota Mining and Manufacturing Company, the brand has evolved through time. Today, 3M makes and distributes everything from adhesives and abrasives to passive fire protection, medical products, electronics circuits, and car-care products. They rolled with changes to a remarkable degree and leveraged key people and resources to ensure they stay relevant in areas where they identified gaps.
They filled every niche they came across. This is not a strategy that works for everyone, as you risk stretching yourself too thin or straying away from core competencies and vision. It is a good idea, however, to stretch yourself enough to expand into new and viable markets.
When business owners identify which markets are most advantageous and understand why they should be in them, the strategic communication and marketing techniques come directly from that knowledge. If you’re not sure of your purpose, branding and advertising campaigns are ineffective because you do not have a good sense of your position in the market. You won’t be able to communicate why you’re there, or why customers ought to care. If you don’t have that, you’re not going to break through plateaus. If you do, well, watch out 3M.