“Lack of direction, not lack of time, is the problem. We all have twenty-four hours in a day.”
Focus plays a critical role in the success of any individual or business. No startup would have ever become a giant company without focussing on their most valuable product or service. If you are planning to start a business, focus on one thing in which you are an authority or intend to become an authority. If you are already running a business and want to scale it further, focus on the core competency. And get rid of cosmetic products which add no or insignificant value to the revenue.
Focus helps companies in the following ways:
Focus boosts your expertise in a particular area. In the era of stiff competition, trust is the main differentiator for businesses. You can’t win the trust of your customers until you are an expert in what you do. Most of the successful companies first focus on one product or service to scale their operations and build a brand and then grow their business through mergers and acquisitions. Google wouldn’t have become what is it today if they would have integrated features of YouTube, Facebook, and Gmail into a single product. Accenture would not have emerged as a large consulting firm, had they started selling project management software.
Any product or service has enough demand to make your business big. Scaling a business with a single product or service is far easier than a company that has a wide gamut of goods. Service providers need to understand the concept of scaling their business before launching just another service. If you focus on just one service, you can find or train employees quickly to increase the bandwidth.
If you understand something better than your competitors do, you can create multiple pricing layers. For an expert advice or value added services, you can charge a premium price. The cost of production will also decline as you scale your business and thus overall profit will increase.
Your customers will be ready to pay a premium price for the expertise that you bring to the table. Therefore, your profitability will be higher than the competitors in your particular niche.
Focus on a particular niche and do it better than others until you want to be a mediocre company. There is nothing bad in being average as long as you understand that the mediocre businesses have a limited scope of growth. In difficult times, they are the first ones to shut their shop. The traditional startups which provide services face a lot of challenges in scaling their business. Until they are small and have few people, they tend to provide many unrelated services to their clients. However, once they try to scale their operations, things tend to become unmanageable. If you are facing a similar challenge in scaling your business, then try to focus on one service that is generating a significant chunk of the revenue. Once you set a direction for your business, you will see an increase in income and profit over time.