Recipe for Success
Q: I hear that half of all small businesses fail. What's the secret, then, to sticking around for the long haul? — Jess
A: Of course there are a lot of things that go into creating a successful business, but one of the most important, and one that is often under the radar, is the need for a great recipe or two.
Think about any great recipe that you like. Why do you use it? I bet the reasons are essentially two-fold. First, you like the result, that is, the tasty food. Second, you probably like it because you can count on it — you get the same basic results time and again.
Well, the same should be true in your business. To succeed long-term, you need a success recipe that you can turn to which consistently cooks up new customers.
When I first started my law practice, I tried a lot of ways to generate business, and finally settled on putting on legal seminars for the public every other month or so. I learned that whenever I put on one of these free seminars I would create enough new business to keep me busy for the next few months. After some trial and error, I had figured out a way to make money consistently. I had figured out my recipe for making my "dough" (I know — groan!)
That is what you have to do. Your recipe could be almost anything:
- An ad that consistently pulls
- A sale
- A viable social networking presence
- A weekly e-newsletter
- A killer e-commerce site
The important thing is that you try out various ideas and find one that works, again and again. Creating a great recipe will give you a sense of calm, knowing that you can always count on this recipe to keep you in business.
And then, down the road, if you really want to succeed, what you will do is create yet another great recipe, or two or three, and here is why: When an investor invests in the stock market, he or she knows not to buy only one stock or sector. That sector or stock may go up, but it also may go down. By diversifying their portfolio, investors create a hedge against failure.
Great businesses, large and small, do the same thing. Take Apple for example. No, they are not the biggest computer maker out there, but they are vibrant for many reasons, including the fact that they have created some additional great recipes: Computers begat laptops which begat the iPod, iTunes, and the iPhone (among others.) By creating additional recipes — additional profit centers in music and telecommunications in additional to computers — Apple continues to be a growth leader.
The best small businesses do the same thing. To be a long-term success, you need to add more profit centers. Here's how:
- Make a big list of additional ways to make money or create customers that is a natural outgrowth of what you already do. It should not be too much of a stretch.
- Winnow the list down, and then go over it with some people whose judgment you trust. You are looking for the best two or three ways to create additional revenue.
- Again, it could be almost anything — a new product, a new location, an additional service, whatever.
- Test the ideas out and see which one has the greatest potential.
- Roll it out.
The important thing is that you test and find new profit centers that make you money consistently while reinforcing your brand. Avoid being like those restaurants that advertise "Chinese and American food." Well, which is it? A great recipe makes logical, intuitive sense.
And they should also yield some yummy results.
Today's tip: I am sent plenty of business books and read a lot of them. Over the next few weeks, I would like to share in this space some of the best that I have come across recently.
© 2010 Steven D. Strauss, www.MrAllBiz.com