Grow A Small Business By Doing Less

In today’s market, small business owners have more going on than ever.  If you have a small business you are probably wondering “What is going on?”  You probably feel like there are so many opportunities, that you can’t possibly handle them all, and if you don’t handle them, you might be wondering how you are going to stay in business.

I have a lot of friends and customers who feel just like you do.  After doing a lot of research to understand how some small businesses make it and others don’t, I found something.

Scott Bourquin in 68' Mustang GT

It is pretty typical for a business owner to fail once, twice or more before really hitting their stride.  I wondered why that was.  I know I fall into this category.  When I took over my dad’s little mail order auto parts business, I didn’t know anything about anything in business.  I knew I had parts for 67’ and 68’ Mustangs, and a couple of customers who owned 67’ and 68’ Mustangs. 

One day a guy with a 66’ Mustang calls for a part.  Of course I didn’t have one, but being the duteous small business owner, I found one so I wouldn’t lose his business.  I realize now, that decision to save his business was the beginning of events that helped me to lose my business.  This was a recipe for disaster.  After working at two fast food places to pay the bills of the mail order business, I gave it up.  The problem was I got the business bug, and haven’t been able to get rid of it.  Fortunately, I figured a couple of things out over the years.

Recently I was visiting my friend Chad who owns a very small gym called MyOGenics.  He does personal training in a gym that can’t be 1500 square feet.  Interestingly enough just two days earlier, I sat next to an executive with LA fitness in first class on my way to Dallas Texas.  He had been in Los Angeles looking at new gyms LA Fitness had purchased.  Two very different businesses and business models, or are they?

Chad and I were talking about ways to expand his reach without adding more space.  I suggested reaching out to Pro-Athletes who wanted a private place to work out.  Chad quickly gave me the set up of his perfect client and athletes didn’t fit the mold.  Chad’s entire business was built around the person who is very focused and doesn’t have a lot of time to work out.  His methods are low time usage, high physical usage.  That doesn’t fit the needs of athletes.  We’ll call this the “busy person with disposable income that wants to stay in shape” market.

Chad knew his market.  More importantly Chad knows the niche in that market that he serves. He also knows where they are.  He gym is on the border of West Hollywood and Beverly Hills. If I were that smart about car parts I would probably be giving JC Whitney a run for his money by now.  Simply put, I wasn’t good enough at supplying parts to 1967 and 1968 Mustangs, so there was no way to be profitable at 1966 Mustangs. 

What Chad was really looking for wasn’t new business niches, but instead methods to go deeper into his existing niche.  If I had worked to be the best 1967 and 1968 Mustang restoration mail order parts house, I probably could have become the “go to” guy for everyone else.   Instead I tried to be everyone else and it didn’t work.

Once Chad has total control over the “busy person with disposable income – Gym” niche, then he can expand into either other niches, or more ways to service the same niche. To paraphrase Jay Abraham “There are only three ways to make more money in business, one of them is to get more money from your existing customers. “ 

Jim Collins of “Good to Great” fame has a new book out.  If you read it, you find that each of the major corporations had a long term slow growth plan much like Chad.  What is your plan?