October 2, 2022

You’re the Boss: Am I Focusing on the Wrong Part of My Business?

Thinking Entrepreneur

An owner’s dispatches from the front lines.

It is now more than three years since the economy took a nosedive. For most small businesses, this has been even more challenging than previous recessions because we have also had to deal with the real estate collapse, a credit crisis and changes in the marketplace brought on by the Internet and other forces. Not an easy time. And I don’t see much evidence of a bounce back coming soon. I have come to the conclusion that it is time to reassess.

First of all, Einstein had it wrong. Not his theory of relativity. That seems to be holding up quite well (not that I would know). But he’s also the guy who said that the definition of insanity was doing the same thing over and over again and expecting different results. Actually, I think that’s frequently the definition of small business.

I don’t think that doing the same thing over and over and expecting different results is necessarily insane; conditions change and business is not a perfect science. That said, this is the way a lot of small-business owners, including me, tend to operate. Whether it is continuing to hire the wrong people because of a bad hiring protocol, sticking with the same marketing plan even though it isn’t working or thinking we are going to become more profitable by underpricing our competition, many business owners stick to what they have gotten comfortable doing and hope it will start producing better results. Why? No doubt it has something to do with the perseverance and optimism that got us into this in the first place. No doubt it has something to do with our willingness to work hard. But sometimes working smart is more important than working hard.

My revelation started with a conversation among the owners in my business group. There are 10 members, and their businesses range from a software company to an auto body repair shop. We meet once a month, and at each meeting we do a “deep dive” of the business that hosts the meeting and a quick update on the other businesses.

After listening to the progress and plans for my five different but related businesses, several owners made an observation. They told me I need to go where the money is, instead of doing business as usual. That’s because there is no such thing any more as business as usual. My custom frame business is not growing the way it used to, and the entire industry is in a major slump that I believe is related to the housing market, changing demographics and competition from chain stores. But my furniture store is picking up steam, and we are doing more business on the Internet because of our unusual products and the attention we regularly get from home design magazines.

It took me a couple of days to process their points and to start thinking about a new strategy. They couldn’t give me specific suggestions because they were not in my industry, but the overall gist was that my home store was hot and they could tell from presentation that it was not my primary focus.

I need to spend more time on new opportunities and what’s working and less time trying to push things that are stuck. I talk to business owners all of the time, and I frequently hear comments like “we are holding our own” or “things are slowly getting better.” Most people I know are not making expansion plans. Avoiding risk is the new black. It has been a very sobering and scary three years.

And that’s way it is tempting to stay with a bunker mentality, especially if you follow the economic news. Every day, it seems, there is another crisis. But if your business is stable, and your debt is under control, and you can afford to take some calculated risks, this might be the time to get out of the bunker and try to get ahead of the pack. I am completely redoing the Website for my home store, and we are buying in bigger quantities — I purchased a bigger warehouse — in order to get better prices. In 2009, I was decreasing inventories.

Now might be the time to plant new seeds for future crops. Carefully.

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=5f839680e6c0f636ddda4b3872b2a277

Speak Your Mind