There was a WSJ headline recently about how P&G has surpassed Unilever, and it stated they did it by building on their strengths, i.e. their competitive advantage. The WSJ wrote:
“P&G has overtaken Unilever by focusing on its biggest brands and improving their efficacy, while Unilever is still reliant on food products and unpredictable emerging markets.”
What are lessons for small businesses? Let’s consider the following:
- I’ll start with us, and we know our strength is lower middle market buy-sell deals. We don’t work on small, main-street deals and we don’t compete with investment banks. We don’t do money raising, startups, turnarounds, etc.
- Determine what your strengths are and start by having great financial information, including management reports (not just a P&L). You may like product “A” but if products “B” or “C” have much higher margins build on the latter. You may not know this without better information.
- Let your employees lead it and work with your people on this. Train your people so your bottom 10% becomes what your 50% level used to be. It’s win-win.
Yes, there are more ways to build on your strengths. What do you think they are?
“One useless man is a shame, two is a law firm, and three or more is a congress.” John Adams