Ever Think About What Business You Really Are In?
I'm a big fan of Bob Burg and have heard him say that people don't buy drills because they want to buy a drill but because they want a hole. Good point.
I've been on a little road trip the last couple of days with my 14 year old son (Rock and Roll Hall of Fame on Tuesday!) and we spent Sunday mostly in Altoona, PA. Altoona is home to the Altoona Railroaders Memorial Museum and, in its day, was a key location for the Pennsylvania Railroad. The Pennsylvania Railroad of course was the favored investment of widows and orphans because it paid a dividend for something like 122 consecutive years before it went bankrupt.
The Pennsylvania Railroad was also the standard for railroad service around the world. But what business were they really in? I suspect they thought they were in the railroad business. Weren't they really in the business of moving people and things from point A to point B? Why did they go bankrupt? Because people and companies found easier ways to transport themselves and their freight from Point A to Point B! Ok, there was government regulation issues and other factors, but that really is it.
What if the Pennsylvania Railroad had though differently? Maybe they would have diversified into other methods of transportation. Maybe they'd be running the airline considered the standard for the world.
I heard this analogy once applied to a lamp shade manufacturer. They floundered as long as they thought they were in the business of making lamp shades. When they realized they were in the business of controlling the dispersion of light, they found new ways to look at their business and started to grow.
Which leads to my opening question: Ever Think About What Business You Really Are In?
Our biggest niche is audits of SEC Smaller Reporting Companies. Yes, we're auditors, but is that why people buy from us? Generally no - they have to have the audit. But what purposes does the audit serve? If you think about it, maybe we are in the insurance business - we are providing insurance, so to speak, that the statements are accurate.
These are the thoughts going through my head while driving from Point A to Point B on this road trip. Maybe I'll have some rock and roll type thoughts driving home to Detroit Tuesday night.
Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies. Joel writes observations on different matters and especially on working with and using LinkedIn. He thinks he has a sense of humor.