It’s important to know what your business is. Sounds pretty simple, doesn’t it?
But you’d be surprised by the lack of understanding and business definition most businesses operate under. Why is it important? Largely, it does two things: Provides focus and prevents waste.
A lack of understanding of what your business actually does could lead you into being lured by evil temptation.
Take this example:
Good old Tom -- he’s been slaving at his business for 18 months now. A knock at the door and an opportunity is presented. Not quite within the business framework of what he does but worthwhile to give it a shot.
Tom now starts to learn about the opportunity and how to tackle it. He starts allocating resources to make the opportunity happen. He utilizes existing staff and materials to make it happen. And many weeks later he succeeds, and the opportunity is realized.
He realizes that the profit from the exercise is non-existent or marginal at best. He also realizes that he has taken significant resources away from his existing business.
The existing business has suffered during this time and the awareness has just kicked in. He now needs to go into damage control and correct the direction of his business.
He also finds out that the “opportunity” was a one-off and unlikely to be repeated.
Tom lost focus and has incurred considerable waste.
Don’t be like Tom. Ask Yourself: “What really is my business?”
We’ve all heard of mission statements. Most are motherhood statements that provide little value or understanding to anyone reading it. So that’s not what we are talking about.
It’s a case of defining “what you do” and “what you don’t do,” within the context of your products, your customers, your market and your geographic reach.
1. What products/services do we sell? What product/services do we NOT sell?
2. Who are our Customers? Who are NOT our customers?
3. What markets do we serve? What markets do we NOT serve?
4. What geographic territory do we service? What geographic territory do we NOT service
Give it a go. Defining is always harder than you think. But doing the exercise will be fruitful. And, it will provide a basis for staff, customers and others to understand what you and your business are about.
Business is about thinking.