What Business Are You In?
Copyright 2006 Donna Gunter
Back in the early-1990's, after I had quit my job in higher
education, I began my journey into the self-employment world by
opening a business in which I made stenciled floorcloths and
wallhangings and sold them at juried craft shows. The business
wasn't going so well, and I wasn't really enjoying what I was
doing, so I decided to enroll in an entrepreneurial training
program, thinking that whatever I learned in there would help me
build and grow my business.
One of the more interesting tidbits that I remember from the
program is a conversation on what business each of us was really
in. I, of course, thought I was in the crafts business --
anybody could see that as plain as the nose on your face. What I
discovered in this process is that many times we are not in the
business that we think we're in, and shifting that mindset may
make all the difference in the success of your venture. One
example given was the McDonald's restaurant franchise. Now, call
me silly, but I had always thought McDonald's was in the
restaurant business. It seems, however, the McDonald's is really
in the real estate business.
Yep, that one surprised me, too. Apparently, the strategy of
McDonald's is to seek out very valuable pieces of commercial
real estate on which to locate their buildings. By doing so, the
location and the real estate becomes their real asset, often
worth much more than the actual restaurant that sits on the site.
I had occasion to ask this question to a potential client a few
weeks ago. This family runs an entertainment facility in which
dances and social events are held in the evenings. They aren't
able to run a restaurant from the facility, so it sits empty
most of the day. When I inquired about what business they
thought that they were in, I got the expected response -- the
entertainment business -- and it's a business in which they're
struggling. I told them that in reality, they were in the space
rental business. I asked them if they'd considered renting the
space out to hold bridal/baby showers, children's birthday
parties, proms, school dances, family reunions, class reunions,
etc. in the times when they weren't using the facility. They had
never even considered this. Furthermore, I added, the key to
increasing their revenue was to look at ways that this very
large facility could be generating income for them during times
they weren't using it for their business. This question helped
them put a completely different spin on this business--it wasn't
something they'd ever considered before, as it didn't "fit" with
the business they thought they were in.
Are you in the business that you think you're in? In my
stenciling business, I wasn't really in the crafts business at
all -- I was in the interior design business. In my coaching
business, I'm really in the "help me fix my business" business.
Give some thought to what business you're actually in. You may
discover an entirely new perspective and new opportunities that
you never previously realized.