Effective Business Strategies for your Project - The Importance of Focus
Posted on 02/14/2017 at 12:01 PM by Shannon Hoyle
Everyone will have different opinions as to what is important to your operation. This is OK. Concentrate on collecting ideas, get as much input as possible; save the ranking, organizing and setting of action items for later. Encourage people to brainstorm, develop lists of what you do well and why, then how these things reflect your operation’s core values and mission statement. (And if you don’t have a mission statement? Well, this as good a time as any to create one.)
If you are the entrepreneur swimming up-stream in the daily current of “just getting by,” fighting the good fight in your own little world, well, it is pretty easy to focus upon the wrong things. You may want to start to develop regular business-plan reviews or visioning exercises to knock you out of the rut and encourage an environment that fosters positive change.
Learn to be able to step back and take a look at your project and where it is in space and time. So, what does this mean? Space is the space you occupy in the market; time is what is unique to the market right now, as well as where where the market has been and where it may be going. Most folks who are not familiar with this or other “futuring” exercises, approach them with uncomfortable trepidation. In a nutshell, the key is to be the detached observer and be able to take a good hard look, not only at what is going well, but also at the bad uncomfortable things that everyone wants to ignore. It helps to start with some categories for your analysis; for example, human (in-house and out-of-house), financial (internal and external), time and logistics. This is where one really needs to look at what is not working and why; the problems and situations that may be very uncomfortable to address. Setting aside personal feelings from objective thinking is a huge evolutionary step in becoming a business-development professional; and the very crucial first step to becoming a “focused competitor.”
Select diversification in your business strategy. It easy to focus on a single objective. Carefully consider what you are doing from various vantage points. “Diversity” can be achieved in several ways.
For example, if an entrepreneur only makes one product and is completely focused on selling that one product to a particular audience, that person is missing several key factors that could generate considerable sales and income. By focusing on a single product and/or audience, our person has failed to take time to look at the product in terms of adapting it to the needs of other audiences, failing to consider product diversification to exploit market diversity. Exploring diversification usually has the added benefit of exposing new and unique related-product needs and applications.
Another, very different vantage point, could be careful consideration of how this single product is produced. One very sound way to make a business more profitable is to increase efficiency and reduce costs. Another, is to look at what is going into and out of the manufacturing process. For example, our manufacturer may find that a waste-stream is not a waste stream, but a value-added co-product. As a result of manufacturing any product, others are generated; it is worth the time to rank them according to value, and then ascertain why some have more value than others. Look at markets for those products and then target getting your material to the best market, or tailoring it to that market by further processing, what professionals call adding “value-addition” steps. Each step in additional processing is justified by an increase in product value.
Another, seemingly obtuse vantage point, is to consider those value-addition steps we just discussed, and “deconstruct” them with an eye toward substitution or elimination. Again, consider our example entrepreneur and let’s look at the product he or she ships to distributors or end users. If, for example, it is a fully assembled product, what if the product could be shipped with “some assembly required.” Cutting out the costly labor of some final assembly, perhaps shipping in smaller and better-protected cartons, being able to get more units on standard shipping pallets that are easier for truckers and warehouse workers to handle, all add up to a preference for your product, and a more efficient and profitable operation for them. If your product is easier to deal with by your distributors, this is a subtle, but huge advantage over your competition.
Some very well-known and successful companies embrace diversification in interesting ways. Examining highly diversified firms with various product streams, marketing tactics or management systems, will help any entrepreneur develop novel approaches to address their own markets.
Editor's Note: "Effective Business Strategies for your Project: The Importance of Focus" is part two of a four part series written by Dan Burden, AgMRC Program Specialist. View part one.