Q: Why can’t my strategy be based on being “the best”?
A: Aiming to be “the best” isn’t a strategy. Everyone tries to be the best. Strategy is the means you choose to make your business the best option for existing and potential customers. For example, offering a more personalized service than that offered by your competitors would be a strategy.
Also, attempting to be the best in every aspect of your business is tantamount to setting yourself up for failure. It is unrealistic to try to achieve and sustain superior performance throughout all areas of your business operation. A wiser goal is to try to be good in all areas but strive for perfection in only one or two areas that are crucial to distinguishing your business from the competition.
Q: I own a car wash business that has two direct competitors. What are some good choices for a company strategy?
A: 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 also they may help position you as a higher-end car wash and might enable you to raise prices for your basic car wash service.
Or you could aim to service a particular market segment such as trucks or taxis.
Or you could try to appeal to people who want to have their cars washed frequently by having deeply discounted prices for, let’s say, 20 wash ticket books or even a flat fee for unlimited washes per month.
Q: I don’t ever seem to have the time to put together a strategy for my business. And when I do find the time, I just can’t seem to get traction on it. How important is it, really?
A: On a scale of 1 to 10—15! If you don’t have a strategy, it is quite possible that you could work 80 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!
Q: Can a strategy work for any business, even personal service businesses, such as consultants, lawyers, and accountants?
A: 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 phase out your lower-priced, less specialized work.