2017 is here. It’s time to review, renew and refresh not just how your business is doing but how business is being done. Here are six critical areas to consider.
What’s your business?
First, clarify what business your company is in. Railroads used to be in the passenger transportation business, at one point in the early 20th century carrying 98 percent of intercity passengers. Along came cars, the interstate highway system, and the airlines. Today, with the exception of Amtrak, trains move freight.
From its beginnings in 1901, for decades Walgreens was pretty much just a drug store. It has morphed into a friendlier mass merchandiser with more than 8,000 outlets in all 50 states. They sell grocery items, soft goods and alcohol in addition to over-the-counter and prescription drugs. They locate stores in convenient locations and provide consumer-friendly hours.
Clarify your vision
Second, it never hurts to review and revitalize the company vision statement. Businesses that get beyond the early survival stage grow in large part because they have a vision. The owner is not misled by current circumstances, but instead provides a destination for those who follow him or her. Does your vision reflect reality? Is it filled with energy, direction, and focus? Can employees state what the vision statement says? Is it memorable enough to be memorized?
Know your advantage
Third, review the company’s sustainable competitive advantage. Wikipedia states: “…Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors.”
Creating a sustainable competitive is done from the outside in. Clients initially chose to do business with a vendor because that vendor provides something, either tangible or intangible, not provided by other vendors. Clients continue to stay with a vendor for specific reasons. The solution, the challenge, is to find out the “why” behind those buying decisions.
Don’t become a commodity
Fourth is avoiding the commodity trap. Business owners often believe that their offerings have become commoditized by the competition. These same owners think that that low pricing is the key decision behind purchasing. Wikipedia defines a commodity as “…a good for which there is demand, but which is supplied without qualitative differentiation across a market…”
When a buyer cannot discern a qualitative difference of offerings among competitors, price becomes the only factor in the decision to spend.
The challenge is to build value that matters for the buyer into the purchasing equation. Former, current, and potential buyers can provide invaluable information to help strengthen the existing sustainable competitive advantage and also provide insight into what constitutes value for the customer.
See the target
Fifth, review, refine and redefine the target market of the company. Who is your perfect client? If the client base changed, how has it changed? Who is making the buying decision; are there multiple buyers involved?
Keep your plans fresh
Finally, there are three key documents worth creating or updating when proceeding through this business review process. The first is the strategic plan for the company. Second is the marketing and sales plan for the next eighteen months, and the third is the operating plan for the year ahead.
Here are those six areas of focus put as questions: What business is your business in? What is your vision for your company? What is your sustainable competitive advantage? What are you doing to avoid the commodity trap? Who is your target market? Do you possess the critical documents to move your business ahead in the short term?
In business as in the rest of life, a good definition of insanity is “doing the same thing over and over and expecting a different result.” If you want a better year in 2017, try adopting a new way to look at your business to move your company forward.
Ken Keller is a syndicated business columnist focused on the leadership needs of small and midsize closely held companies. Contact him at [email protected]. Keller’s column reflects his own views and not necessarily those of this media outlet.