Entrepreneurs and businesses are always trying to make a profit.
However the money isn’t why you are in business or at least it shouldn’t be. Profit is how you stay in business. If you don’t generate profit your business is over.
Businesses or entrepreneurs that think their strategy is to make money are missing an important point. Your strategy has to be about something for others – to deliver a service, or a product that people need. Furthermore, you want to perfect the service or product. You want to make it as easy as possible to understand, acquire and use.
A company that sells widgets has to focus on improving the delivery and function of the widget – if they keep doing that, the money will follow.
Then how do you generate revenue? By following your strategy.
What is a strategy?
The strategy is your vision of your business in motion –your inspiring vision of success. Imagine a business to which non-greater can exist.
When you know your strategy, you can more easily sort the good ideas from the ideas that are actually appropriate for your business. Just because something is a good idea, doesn’t mean it makes sense to your business.
In my last blog I talked about McDonald’s failed experiment with Pizza. Had someone been thinking, and really paying attention to their strategy this is what they would have said:
“Wait a second … do we want to sell Pizza? We sell burgers, and we have sold over 1 billion of them. We feel good about our product. Can we make good Pizza? And even if the demand for Pizza is there (meaning money) does making and selling Pizza make sense?
No doubt some others would have chimed in with the facts – that there is a lot of money in Pizza, and that in some way selling Pizza at a burger joint makes sense – give the people what they want etc.
The only problem was that despite all the money there is in Pizza, it didn’t make sense for McDonalds. All of a sudden, franchise owners had to invest in big, expensive equipment and suddenly they realized that they had introduced their first product that wasn’t handed to the customer immediately. Pizza is great, but it didn’t fit with McDonald’s strategy. It was a mistake.
Enterprise requires time, energy, and money.
Sometimes a great idea isn’t so great. You should rely on your strategy to measure your new opportunity. Keep in mind that sometimes good ideas are good ideas, but they don’t make a lot of sense when measured against your strategy, and you will be pulled away from your mission and cost yourself a lot of time, money, and energy.
Lots of my readers are Financial Advisors, and they get compensated based on how much money they have under management. A seemingly fast way to get to the top is to merge your business with someone else. Two advisors managing $50 million each can become a team managing $100 million almost overnight. This is an attractive option to a lot of advisors, but my question is always “have you done your due diligence?” Meaning – are you and the other advisor on the same page philosophically about what does, and doesn’t work in the financial services industry? Do you share the same strategy or are you chasing the money? Do you have the same values and believe in the same approach to working with, and taking care of your clients.
If the answer is ‘maybe not’ – then you might end up with $100 million under management and a business at odds with itself.
What is the difference between your Strategy and your Plan?
Your plan is the activities and process you will engage in that support your strategy. The activities that have to happen in order to create and consistently deliver your desired experience. Your plan is built on procedures, attention, and measurement.
Let’s use Starbucks again. They’re plan is to “Inspire people one sip, one cup, one neighborhood at a time.” Everything they consider doing they will ask: “Does this new idea, help us achieve our strategy?” Does selling cool music help inspire people? Yes. Does providing free internet and a comfortable environment to sit and stay in help inspire people? Yes. What if Starbucks started thinking it might be a good idea to feed people lunch. They are there already. They already like Starbucks; why not keep them there a little longer and sell them a club sandwich. Would this help inspire people? Not so much.
The Strategy is executed through the Plan, which is delivered through systems and procedures that establish and define your brand.
What’s a brand?
A brand is a promise kept or a promise broken, that’s it.
Our Strategy – To Inspire Entrepreneurs to innovate and make meaningful changes in their lives or the lives of others
Our plans are to speak at conferences, blog, write, and work with advisors in workshops and individually to inspire them. All of these initiatives help us fulfill our strategy.
Our brand is reliable, professional, expert, always delivers.
Do we ever get pulled off track? Of course we do. We are entrepreneurs, and we love ideas and we love opportunity, the difference is we never get pulled off track too far, or for too long. We manage to catch ourselves; ultimately early in the evaluation we will start to ask ourselves “Does this help us fulfill our strategy?”
Do what you do best. Do it all the time. Have more fun.