Business Planning - Strategy
Ask Bob

Ask Bob About Strategy

?I own a car wash business that has two direct competitors. What are some good choices for a company strategy?

You could use strategy to widen your gap of direct competition to boost your profit margins. For example, you could develop add-on premium services such as hand drying, high-luster waxing, detailing, or shampooing of car interiors. Not only should services like these offer higher dollar sales and higher profit margins, but they might also enable you to raise prices for your basic car wash service as well.

?I don’t ever seem to have the time to put together a strategy for my business. How important is it, really?

On a scale of one to ten—fifteen! If you don’t have a strategy, it is quite possible that you could work eighty hours per week all year long and only break even or possibly even lose money. With a great strategy you might be able to work one day a week and make piles of money!

Football provides a good analogy. If a football team works very hard but initiates the wrong plays, it won’t be going to the Super

Bowl. If the team continually executes passing plays against rivals that are terrific at interceptions, it might as well have forfeited the game before it began!

?Can a strategy work for any business, even personal service businesses such as consultants, lawyers, and accountants?

Absolutely. A common, yet good strategy in competitive personal service businesses is to specialize. The more you can be recognized as a specialist, the less competition you will have and the higher rates you can charge. Initially you may want to take any client that comes along. At the same time, however, you should start writing newspaper or trade magazine articles or giving seminars that focus on your particular area of expertise. As your ability to profit through higher-priced specialty work increases you can, proportionately, phase out your lower-priced less specialized work.