Are We in the Right Business?
My earlier article asked the question, “What Business Are We In?”
This is a classic business school case study question. Often, we believe we are in one business, selling widgets, when we are actually in a different business. Matt Levatich, CEO of Harley-Davidson, described their business as not selling motorcycles but selling freedom.
Download a PDF copy of my nationally published article What Business Are We In? HERE.
A related question is “Are We in the Right Business?” Here are the stories of two business owners who decided they did not have the right business model and moved to a more sustainable and profitable one.
Mowing Lawns to Installing Trophy Trees
Walter Acree was recently profiled in the Wall Street Journal. For years, he ran a landscaping business in Deerfield Beach, Florida. The business gave him freedom to be his own boss and “dig in the dirt” as my landscaping friends would say. Acree’s services were the same as other landscapers and competition was usually on price.
Acree was asked to find and install a rare tree. Not only did he find the tree, but he discovered a new business model. His business changed from being a “landscaper” to being a “tree broker.” He finds and installs specialty trees such as giant kapoks for wealthy property owners. The fee for one tree could be $250,000. He is no longer competing for lawn cutting contracts.
Charter Flight Broker to Executive Air Travel Service Packager
For my book, I interviewed the owner of a company based in Orlando, Florida, who also found a different and more profitable business model. His business was brokering private charter flights. If a vacationer wanted to charter a private flight from New York to Miami, his company booked the charter flight for them. The company charged a fee on top of the cost of the charter.
The business was profitable, but growth options were limited and there was no opportunity for premium pricing. Discussions with his staff about growth opportunities eventually created a different concept for their business model. Instead of being a charter flight broker with all costs and fees visible to the customer, they became an executive air travel service company. They provide door-to-door travel services built around private charter flights. Charter flights are part of the package, but the fee is for the total travel package. Fees for the air travel service are based on the value of the service to the customers rather than a percentage of the air charter cost.
Questions like “What business are we in?” and “Are we in the right business?” may come across to you as superficial and not helpful. “I know what business I am in!!” But these are fundamental questions about the sustainability of your business, the value proposition of your business, and why you are making a profit or not making a profit.
Summer in the Boatyard
Sailors return to the boat yard and return to the sea. My hands hold the curve of the hull, feel the crinkle of sails, and the coil of the lines. The bow of the boat is strong against the sky. Ready to challenge the waves.
