In our evolving economy, the ability to diversify your business model can mean life or death. However, it may be more beneficial, in the long term, for a company to specialize. As the owner/operator of a home generator sales and service company, I can tell you firsthand that finding a single niche is both challenging and rewarding.
“Jack of All Trades, Master of None…”
Being able to adjust to any growing business model is essential for long-term success. This chameleon-like approach is a great way to diversify and build a reputation – granted you stay within your field of expertise. The risk is getting stretched too thin with too many products or services that you can’t support. If you can’t adequately support what you sell, customers will become unhappy and sales of core products may decline. Ultimately, your reputation and your bottom line will suffer.
Specialization Requires Focus
There are several old sayings applicable to staying focused: stick to your knitting, don’t stray far from what you know, and so on. As my grandfather once said, “If you don’t know where you are going, stop and ask before you’ve gone too far.”
Everyone starts out with a business plan created around the production and sales of a product or service. That business plan, presumably, is founded on certain knowledge, experience, ideals, and resources. It is my belief that one of the keys to success in business is the discipline to stay focused on what you do well. My business has clearly defined what we are. The products we offer, the skill set we use to deliver a great product combined with a fair price, our customer support, and the ability to repeat the process drive our bottom line.
Localization is Key
Whether you sell home generators or candy bars, keeping your client base within a reasonable distance will keep your business strong. Scope and territory management – our business model – requires selling, installing, and servicing. Defining our territory within a 2-hour drive time allows us to service a large territory. With our two locations, we’re able to overlap that coverage. Further, we understand our market and our defined territory. It’s familiar to us, and the market is large enough for us to successfully execute our plan.
A local territory creates a niche for your company, but it’s also a great selling point; you not only work with these people, you live amongst them. They have confidence and faith that you have their best interests in mind because they believe you know their best interests.
Create Your Own Model
Our company specializes in residential generators for small businesses and homes. We don’t sell unrelated products in conjunction with our generators. Something that works for one may not work for all. Each business needs to define its scope of products and services based on what works for them. Some products and services lend themselves to a broader market, while others are more narrowly defined.
A complementary service or product may be a great idea for your business – a headphone line for a music app company, perhaps – while a far-reaching concept may hinder it. (It’s hard to see how you’ll manage your resources between a laundromat service and a lawn-mowing service, for example.) It’s important to consider how additional products and services will impact your existing work.
Focus on a product line that you know and understand. Define your market and establish reasonable geographical limitations. Place a strong emphasis on customer service and the ability to successfully repeat every step of the sales process. These basic hallmarks to success can be achieved with a diverse business profile, but in order to specialize, a business must control the urge to pounce on any opportunity for the sake of growth. You’ll win your customers over by being stellar at what you do, and specialization is one of the keys to that.
Clayton Preble is the founder and president of GenSpring Power, Inc., a company formed in 2002 that specializes in home standby generator systems for residential customers. Prior to forming GenSpring Power, he spent more than 30 years in the natural gas industry. He is a Master Service Technician, the highest service level expertise certified by Briggs & Stratton.