HOW TO PUNCH ABOVE YOUR WEIGHT
WHEN starting up a business for the first time it can be frighteningly easy to
lose track of what you are trying to do.
You may think you have it all worked out in your head, but the moment you
start telling other people about your plans – whether friends, family or
advisers – you can guarantee they will start offering all kind of
suggestions that can completely throw you off course.
The problem is that while some of these suggestions may be brilliant, others
will be utter nonsense. If you have a well-thought out game plan it will
soon become obvious which is which. If you don’t, then pretty soon you will
have no idea which way is up.
And while your friends and family may be relatively easy to ignore, it will be
far harder to keep your head when customers start asking if you can add a
new feature or function to the product or service you are offering them.
Steve Hinton, executive chairman of QED Consulting, a business consultancy,
says it can be hard to maintain a balance between focusing on what you have
decided to do and at the same time keeping an eye open for other
opportunities that may arise.
He said: “Getting a focus on what you’re doing doesn’t just happen, it
involves using some of the business-planning tools and techniques. That
means deciding what your business is about and then putting together a
strategy-implementation process.
“Answer a few basic questions – what is your product or service, who are your
customers, why should they buy from you, what is it you’re really selling
them? Are you just selling them web design, for example, or are you really
selling them a proper integrated IT service? “If you answer all those
questions then you have got a mission statement to say what you do.”
Geoffrey Galitzine and Chris Waldron started up their glass-recycling company,
Smash & Grab, in 2006 to supply pubs and restaurants with a
glass-crushing machine they designed themselves.
They collect the crushed glass from the pubs and restaurants on a regular
basis and their system is so efficient that they now collect from more than
60 sites, including Young’s and Fuller’s pubs.
In a short space of time they have built up a sound business with a strong
focus. But their resolve is continually tested by customers who regularly
ask if they will collect their cardboard waste for recycling as well.
Although at first glance it may be tempting to expand their business in this
way, using the customer base they already have, Galitzine knows it would be
a bad idea.
He said: “People say to us, you’re taking our glass so why don’t you take our
cardboard at the same time? But there are two good reasons why not – first
of all we think we now know a lot about glass collection and how to do it
efficiently. We have a dedicated truck that is geared entirely to glass and
I think that with the best will in the world we would start missing
collections or being late if we collected cardboard, too. Second, our
machine is unique, it is patented and there is nothing like it on the
market. There are plenty of cardboard-crushing machines out there that are
perfectly good, so really all we would be doing is adding another collection
service.”
He says there is enormous danger in losing the focus of a business: “I think
that if we diffused our attention on what we do really well, then our
general level of service would go down. I think the businesses that really
know what they are doing and focus on that are the ones that are successful.”
Chris West, business adviser and author of the Beer Mat Entrepreneur books,
says it can be easy to get distracted when you are starting out in business:
“The problem with a lot of new firms is they tend to overtailor in order to
be nice to their customers. They end up doing everything the customer asks.
“In a way that is sensible, because when you start out you need to listen very
carefully to what the customers say they want. The trouble starts, however,
when the customers also start asking for the product to do different
functions that are specific to them.
“If you overtailor then you end up running round in circles producing stuff
that is not profitable and you never come up with any actual, defined
product, because they are all so tailored to individual customers and you
have completely lost focus.
“It’s all a judgment call. You have got to both listen to the market and at
the time be a bit resilient if the market asks you to overstretch yourself.
“If there’s something you really can’t do, then the best thing is to tell the
customers about a company that does do what they want. That way you get to
please the customers without damaging your product.”
