Thursday, June 18, 2009

Important Question: What Business Are You In?

I had lunch the other day with one of my mentors and I began telling him about some of the diversification plans for SBM. He stopped me at one point, with a very direct question: "What Business Are You In?"

Can you answer that question in your business? Years ago Hertz Corporation asked this question and realized that the firm was not in the "rental car" business, but rather the "get people out of the airport as fast as possible," business. This discovery changed the way the executives and employees made decisions. It spawned a Hertz Club where members no longer had to wait for vehicles, a huge success for the company at the time.

So, what business are you really in? When you discover the answer, every decision you make should meet this objective.

For SBM, we're not a "publication," or a "newspaper." We're in the business of "Educating and Promoting Small Businesses." After some reflection, I realized some of my diversification ideas didn't really meet this goal.

What Business Are You In?

--Ron Ameln, SBM

Diversification: Riches In Niches

Every company is looking for ways to diversify and gain some new revenue streams, especially in this economy.

One warning: Take your time and find the right solution. Remember: there are riches in niches. Don't leave your niche behind trying to find the holy grail of income.

Years ago Hardee's decided to diversify and serve fried chicken. The chicken was excellent and soon the stores were packed with patrons buying chicken. The only problem: Hardee's didn't have the capacity to serve large amounts of chicken. Soon, patrons were waiting 30 minutes for chicken. That didn't last long, as you can imagine.

It didn't take long before customers, angry they had to wait 30 minutes for chicken, stopped coming not only for chicken but for the restaurant's niche: burgers.

Wisely, Hardee's abandoned the chicken concept and once again focused on its niche: burgers. The chain learned a valuable lesson about diversification. Today, even as chains strive for healthier menu choices, Hardee's continues to focus on its niche: burgers.

--Ron Ameln, SBM

Monday, June 15, 2009

Phil Jackson: A True Leader Wins Again

L.A. Lakers basketball coach Phil Jackson just led his current team to an NBA title. It will make the 10th NBA title for Jackson.

It's no wonder he's won 10 titles. You can tell he's a leader just by watching him on the sidelines. Unlike most coaches in the NBA, Jackson doesn't stand all game screaming at his players. He sits quietly, almost like he's at church. (He's a believer that yelling at someone in heat of a game will not improve his or her performance. Instead, he opts to talk about game situations and offer advice during halftime or timeouts when competitive emotions have settled down.)

Even the world's most coddled, self-centered athletes (basketball players) respect him because he treats them like human beings. (He even passes out books to players on road trips. Yes, Dennis Rodman actually read a few of them.) He gives his players responsibility and a say in game stratagies.

As leaders of our businesses, we can take away many lessons from Coach Jackson.

--Ron Ameln, SBM