Hazel was furious and screaming obscenities. The former owner of a business we acquired, she thought our changes were brutal.
Why was Hazel upset?
With the business hemorrhaging financially, we couldn't afford a "pocket knife" approach and just cut around the edges. When things are bad, sometimes you take out a sword.
It was necessary, and it was too much for Hazel.
To address the loss, we took three drastic steps. First, we cut 90% of the products and, second, shut down the retail store that highlighted them. These first two steps allowed us to thirdly, focus on THE ONE product that sold the most AND that we could produce better than anyone else in the world.
Hazel operated her business out of the limiting belief that the more products she had to sell, the more sales the company would make.
Like Hazel, entrepreneurs often believe more products mean more sales. This limiting belief will kill your business.
The problem is that trying to be everything to everyone; your business will miss its niche market.
Lesson: More products do not always equal more sales.
It often becomes easy to confuse activity with sales. Your inventory may be growing, but it is not being sold.
Hazel was stuck. We dropped 90% of the four hundred items the business was offering. The remaining products were the best sellers, and they were all fruit syrups.
Focusing on these syrups meant we recognized this was something we could do better than anyone else in the world. So, we put 50% more fruit in the syrups to distinguish ourselves even more. Raising the bar in our level of excellence was the goal.
It was our niche. It became what we were known for.
Lesson: When you try to be everything to everyone, you miss your niche.
What happened? Profitability exploded! Sales doubled in the next year, and over the next seventeen years, sales grew seventeen-fold! This 90% reduction in product offering to a singular focus catapulted the business and allowed the brand to be known for a niche. That niche business continues profitably to this day.
Are you missing the "riches in the niches?"
I would love to hear your stories of success and failure in this sphere. Connect with me on LinkedIn or email me at harryt@cultivatingimpact.biz.
Harry T. Jones
Comentários