What Business Are You In?

Back in the early-1990's, after I had quit my job in higher education, I began my journey into the self-employment world by opening a business in which I made stenciled floorcloths and wallhangings and sold them at juried craft shows. The business wasn't going so well, and I wasn't really enjoying what I was doing, so I decided to enroll in an entrepreneurial training program, thinking that whatever I learned in there would help me build and grow my business.

One of the more interesting tidbits that I remember from the program is a conversation on what business each of us was really in. I, of course, thought I was in the crafts business -- anybody could see that as plain as the nose on your face. What I discovered in this process is that many times we are not in the business that we think we're in, and shifting that mindset may make all the difference in the success of your venture. One example given was the McDonald's restaurant franchise. Now, call me silly, but I had always thought McDonald's was in the restaurant business. It seems, however, the McDonald's is really in the real estate business.

Yep, that one surprised me, too. Apparently, the strategy of McDonald's is to seek out very valuable pieces of commercial real estate on which to locate their buildings. By doing so, the location and the real estate becomes their real asset, often worth much more than the actual restaurant that sits on the site.

I had occasion to ask this question to a potential client a few weeks ago. This family runs an entertainment facility in which dances and social events are held in the evenings. They aren't able to run a restaurant from the facility, so it sits empty most of the day. When I inquired about what business they thought that they were in, I got the expected response -- the entertainment business -- and it's a business in which they're struggling. I told them that in reality, they were in the space rental business. I asked them if they'd considered renting the space out to hold bridal/baby showers, children's birthday parties, proms, school dances, family reunions, class reunions, etc. in the times when they weren't using the facility. They had never even considered this. Furthermore, I added, the key to increasing their revenue was to look at ways that this very large facility could be generating income for them during times they weren't using it for their business. This question helped them put a completely different spin on this business--it wasn't something they'd ever considered before, as it didn't "fit" with the business they thought they were in.

Are you in the business that you think you're in? In my stenciling business, I wasn't really in the crafts business at all -- I was in the interior design business. In my coaching business, I'm really in the "help me fix my business" business. Give some thought to what business you're actually in. You may discover an entirely new perspective and new opportunities that you never previously realized.