When asked about some of the fundamentals that I’ve written about — offering extended warranties, taking steps to reduce dismantling costs, or putting salespersons on commission — none has been done.
My response is generally the same: You just need to be a little better to beat your competition.
Even more encouraging: Once you make the decision to focus on beating the competition, the odds of achieving a measurable difference are way in your favor..
Let me share with you why I feel that way.
Imagine that your business has 100 competitors. Consider where most of them are in relation to these four key thresholds that lead to competitive advantage:
- Recognizing that there is an issue — Most owners and managers know that they are facing pressure on earnings. Something isn’t quite right, but they don’t want to devote the energy to defining the issue precisely. I would estimate that only about one in four has the willingness to face issues directly. So, out of 100 competitors, simply recognizing the issue puts you in better shape than 75 of them.
- Zeroing in on the issue and creating a workable solution — Now, how many of the 25 competitors left will act upon the insight? How many will invest the time to design a workable solution? Let’s be generous and say that half of the remaining competitors recognize the issue and can remain focused long enough to design a solution. Now, of your hypothetical 100 competitors, only 12 remain.
- Quantifying the solution with goals, metrics, and milestones — As business owners, we know that implementing a major initiative (such as shifting sales people and delivery drivers to pay for performance) doesn’t happen overnight. It takes careful planning and good leadership. It requires sound management and an agreed upon measures of progress. How many of your competitors will do this step effectively? Let’s be kind and say half of the remaining twelve get this far.
- Executing the plan — Among the six of your competitors that have a plan with measurable milestones to deal with the issue(s) that have been identified, only half, or three, will have the gumption to carry it out. It takes a lot of energy and involves changing key processes. Before you become discouraged about competition, consider that only three of your hypothetical 100 competitors might be doing the right things to make meaningful improvements to their businesses.
The very good news: If you can carry out these four steps, you only have to be a little better than these final three to win.
You must delegate effectively to make sure that you cross all four of the key thresholds to lasting competitive advantage. If you find you’re stuck, get help. It’s available, and the cost is small relative to the IMMINENT decline in earnings you will see if you don’t constantly innovate, cannibalize your old paradigms in favor of new ones, and change.
My friend used to say I threw 100 changes against the wall every year, and only a few really stuck, but they were real humdingers.
Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can deliver wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.
Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.
As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.
To inquire about consulting or keynote speaking, contact Ron at 817-834-3625, ext. 232, rons@MrMissionPossible.com, 5940 Eden, Haltom City, TX 76117.