Interesting article that appeared recently on CNNMoney.com, about an interview by Dinah Eng with the founder of Cheesecake Factory, David Overton. He took the wholesale business that his parents started in the 1970’s and turned it into the billion-dollar chain that it is today.
Overton’s 3 main points:
Focus on people — you have to give your people the tools to excel, including investing in training for your team.
You can’t try to control everything yourself. He focused on the things that would make them successful.
Make the formula hard to copy — their restaurant menu is very broad and deep, making it hard for other restaurants to try doing the same thing.
A great article — give it a quick read! I think today being Cinco de Mayo, made me think about food…
And finally, the “L” in IDEAL stands for “loyalty”. This is the element that makes your business model tick; the ability for you to create a customer or client experience that keeps them coming back for more. Even more importantly, their customer experience with you is so awesome, they want other people they know to experience it too, so they refer you.
I like to say that this “L” results in two “R’s” — repeats and referrals. Repeat business is very valuable for you to have, because it doesn’t cost you very much to continue receiving this. And referrals are valuable too, because they drastically lower your cost of acquiring a new customer.
So keep the elements of my IDEAL business model in mind. It could lead you to fulfillment and prosperity in your business. It certainly has for me, for past and present businesses that I’ve owned.
Getting back to my concept of the IDEAL business model, we come to “A”, which stands for “advantage”. Your products and/or services must have some sort of advantage over your competition, some of which may already have greater share of business than you do right now. Looking at it another way, there must be some advantage for your customers to do business with you, compared to whichever competitor they’re using now.
An advantage could come through price, features/benefits, having a patent on a new technology, or even just being repeatedly more dependable than any other supplier. Whatever the advantage, try to build one that is sustainable. A price advantage, for example, is mostly temporary — until your competitors drop their prices too. Building and demonstrating a sustainable competitive advantage is the ticket to gaining market share.
The first quarter of 2011 is already in the books. Where did the time go? Maybe it seemed faster with all the weird winter storms and such, but at the time it sure felt like it was going to be a long winter.
Did you get some or most of the things done that you planned on doing in the first quarter? Take whatever remaining items, prioritize them, and put them on your plan for Q2.
“E” is for Economics – all of the numbers in your business. Prices, costs, expenses, size of market, potential sales, number of repeats, number of returns, demand … anything that relates to your business’s products and services. You should know your numbers, particularly what it costs you to be in business. Too many business owners I’ve read or heard about, are former owners because they didn’t realize the size of some of their numbers.
As a business owner, you should not delegate the knowledge of these numbers to someone else, like your accountant or your marketing director. You should know where you stand.
The “E” also includes economics from the customer perspective, too. What’s the value to the customer, to buy your products or services? What’s the magnitude of financial benefit your products bring to your customer, in terms of saving time, saving money, or some other measure?
“D” represents “Differentiation”, in the IDEAL business model. Whatever you’re offering, whether they’re tangible products or services, needs to be different from whatever your competitors are offering. If you offer things that are largely the same, or what we call “me too” products, potential customers would more likely stick with competitors who have been around longer and who already have a track record.
Of course, if the competitor’s track record is a lousy one, you could offer the same offering and perhaps get away with it. But even then, since you’re an untested supplier of that product or service, you run the risk of the customer thinking that you might be no different than the lousy competitor.
So make something different: your offering needs to allow the customer to be better, faster, more productive, more relaxed, prettier, younger, stronger, slimmer, smarter, funnier, or whatever, than your competitors can do. Without this differentiation (the “D”), you’ll be viewed the same as the others, with no compelling reason to give you a try.
I always say, “Great ideas are abundant; great execution is rare.” To have a chance at great execution, your business (or business idea) must have IDEAL conditions. That’s my acronym for the ingredients of a successful business model that can sustain itself and grow.
More of the details later, but for now I’ll just introduce you to the components of the acronym IDEAL:
I = Initiative
D = Differentiation
E = Economics
A = Advantage
L = Loyalty
Stay tuned! I’ll write more about each letter, in future posts.
Enough time has passed since Christina Aguilera flubbed a line in her rendition of the Star Spangled Banner at the start of last Sunday’s Super Bowl. Tens of thousands of opinions ranging from snarky to sheer outrage were expressed over the next few days. But Aguilera has moved on, as she should, issuing a short statement about it all.
A columnist/blogger for The Daily Beast, Clark Merrefield, asked himself the next logical question in his blog entry today. He wondered how many of those critics, or Americans in general for that matter, know the anthem and could do better? His purely random sample while standing on the streets of Portland, Oregon, yielded a surprising (or perhaps not so) result.
Of the 73 adults he asked, only 8 of them (less than 11%) could recite the Star Spangled Banner correctly. And that was just performing in front of him, an audience of one, never mind the hundreds of millions of people who were watching Aguilera.
What’s the takeaway? You’re going to make mistakes, though hopefully not in front of a hundred million people or more. But if it happens, just move on. Most of the vocal critics probably couldn’t do any better than you did, and likely would do a lot worse.
Despite my oft-repeated mantra of ignoring the naysayers, there is value to a “no” — when it comes from you and your own careful consideration. Don’t say no just because a lot of other people are saying you should. And don’t say no just because certain people are saying you should say yes. Think about it from your own perspective and opinions, and decide based on your thoughts.
But as always, if something doesn’t feel right, it probably isn’t, so you should always listen to your heart on that.
I recently purchased a system related to one of the business projects I’m working on. The purchase was something new and different, something that I’ve never purchased before. I did so mainly because it came with a no-risk 30-day evaluation period … if you’re not satisfied, you can return the product and get your money back.
After spending a couple of weeks evaluating the system, I found that it didn’t really match what I was trying to accomplish. But most of all, it didn’t “feel right”. There were numerous typographical errors in the documentation and even in some of the products, and getting questions answered wasn’t always immediate. So I returned it.
I couldn’t have reached a “no” if I hadn’t spent the time to evaluate the pros and cons, and realize my feelings about the product. So use the power of “no”, with consideration and forethought.
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