Some people believe that the classic entrepreneur throws off ideas like a popcorn machine–an idea a minute. And, while some successful entrepreneurs build growing businesses that way, it’s a recipe for disaster for most companies.
That seems counter-intuitive, doesn’t it?
But the essential truth of small business, is that time, money and attention are scarce resources. How you allocate them determines your success or failure.
The most successful small business–and business that have grown out of being small businesses–are the ones that focus on doing one or a few things really well. They constantly channel their time, energy and investment back into doing a better and better job for their core customers and their core products.
One great example is the west coast burger chain In ‘n Out. They have a very simple menu: burgers; fries; soda and shakes. That’s it. You can play around with adding lettuce or cheese. Stacking up patties. But the model is totally reductionist. Get great ingredients. Prepare them extremely well. Keep the prices reasonable. Do it every day. There are no specials. No hot dogs. No tacos. Their energy and investment has gone into moving more customers through the drive up more quickly. That creates a better user experience AND it maximizes the revenue potential for each In ‘N Out store. Because they do such a good job, they have attracted a cult following that has grown over several decades.
Many businesses though do a lot of things badly. They have twenty ideas that are 10% complete and console themselves with the idea that “on average” they are getting a couple of things done. In short, they confuse motion with progress.
The CEO of a small business needs to also be the Chief Discipline Officer. And, although I have sometimes been tempted, I am not talking about inflicting corporal punishment on the team. It’s a about strategic discipline.
The CEO needs to have a keen understanding of the customer and what value your business is delivering to them and then translate that into product and services offerings. It’s not about spending more. It’s about concentrating your investment where it will do the most good.
Focus is always important in a small business. But it’s the essential skill in tough times like these.