IdeaEconomy.Net » Seth Godin

Is Your Business the Right Size?

John — Wed, 23 Mar 2011 15:54:50 +0000

Big Ideas:

Is your business the right size?
Are you expanding to satisfy your ego or because it is essential for your business?
There is a right scale for every business, straying from that point will harm your economic viability.
For most businesses, there are diminishing returns on investments in staff or technology.

Bigger is not Better

Talk to any entrepreneur and you will find someone that wants to grow a business. There is a natural assumption that bigger is better. Bigger may be better for our egos, a fifty employee company sounds much better than a five person company, the problem is that bigger is not always better for our bank accounts.

My wife and I ran a small service business for about ten years. In the beginning we worked hard, cared a lot about our customers and grew steadily. It wasn’t long until we were making a great income and were turning customers away.

Then we started to expand. We hired more staff and opened new locations. We noticed immediately that every new employee or investment we made contributed less and less to revenues and profits. The work my wife and I could do with minimal hassle, required 3 or 4 outside staff or would require exorbitant salaries to attract rock star talent. The worst part was that my time was being spent on boring administrative tasks that added little real value to our customers. Suddenly I was focused on hiring, training, managing, sales, marketing, accounting and countless other tasks that kept popping up. By expanding, my wife and I were working more and making less money.

Sure it was foreseeable that we could have reached a point where we could have afforded to hire staff to do all the administrative work, but that was not an incremental growth level. It would have required us to be 5 or even 10 times bigger than we were. It would have taken a lot of time and money to reach that higher level, and even then it was very likely that we would have been too big for the market to support.

Eventually, we decided against the growth and scaled back to just the two of us again with non-essential work like accounting, web development and graphic design outsourced to professionals. We made more money with shorter work weeks, longer holidays and much less hassles.

The Right Size

In the blog post, An atomic theory of business size, Seth Godin points out that a business can not only be too big, but it can also be too small.

Rightsizing your business is one of the most important decisions you can make. Just because you’re thriving at one scale doesn’t mean that a little more effort or a little more investment magically take you to the next. They probably don’t.

Several times I’ve run businesses that the market liked but couldn’t find the right scale… adding more people didn’t add a significant enough amount of revenue, and fewer people would have cost us our customer base. Just because it’s a good idea doesn’t mean that there’s a scale that works.

How to Really Get Big

Growth for growth’s sake is foolish. If you have a successful business that is generating good profits and it is work you enjoy than be happy where you are and invest your free time in projects you enjoy.

If you really need to change to the world, than look for a better business model. With innovative uses of technology and new business models, it certainly is possible for small teams to accomplish amazing things. However, it is unlikely that any company will miraculously achieve phenomenal returns just by scaling the old business model. Doubling staff will not double sales, and it definitely won’t double profits. Doing more of what you did before will only bring more administrative hassles.

Action Items:

Is your business the right size?
Is your optimal profit level at a higher or lower revenue level?
If your business can’t effectively scale up or down, are you satisfied at the level you are at?
If you can’t find the right scale, maybe it is time to completely reinvent your business model?

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How to Get a Job In the 21st Century

John — Thu, 27 May 2010 05:55:41 +0000

What does it take to find a job in this economy? Does sending out generic emails out to hundreds of companies work? How about using the popular employment sites and applying for all jobs vaguely interesting? You can’t differentiate yourself by doing what everyone else is doing.

$6 on Google Adwords to Get Your Dream Job

Alec Brownstein landed two job offers for his dream job with a $6 investment in Google Adwords advertising targeting the names of top New York creative directors. Watch the short video to see.

Create your Own Dream Job

Any sane business owner will happily offer employment to anyone who can prove they can offer more value than they cost. Unfortunately, larger businesses are not particularly sane. Focus on smaller, entrepreneurial companies and you just may be able to create any job you want. Check out Charlie Hoehn‘s free SlideShare ebook to see how he managed to work with Seth Godin, Ramit Sethi of Iwillteachyoutoberich.com, Tim Ferriss of The Four Hour Workweek and movie director Tucker Max.

Recession-Proof Graduate

View more presentations from Charlie Hoehn.

Forget a Resume

Seth Godin wrote in his latest book Linchpin

Having a resume begs for you to go into that big machine that looks for relevant keywords and begs for you to get a job as a cog in a giant machine.

Godin goes on to say,

If you don’t have a resume, what do you have?

How about three extraordinary letters of recommendations from people the employer knows or respects?

Or a sophisticated project an employer can see or touch?

Or a reputation that precedes you?

Or a blog that is so compelling and insightful that they have no choice but to follow up?

Some say, “Well , that’s fine, but I don’t have those.”

Yeah, that’s my point. If you don’t have these things, what leads you to believe that you are remarkable, amazing, or just plain spectacular?

It sounds to me like if you don’t have more than a resume, you’ve been brainwashed into compliance.
Great jobs, world-class jobs, jobs people kill for – those jobs don’t get filled by people e-mailing in resumes.

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Linchpin by Seth Godin

John — Fri, 30 Apr 2010 01:21:14 +0000

I have just finished reading Seth Godin’s Linchpin for the second time. It really is a fantastic book with insights into what it takes to be successful now.

I have to say that I find most business books underwhelming. Virtually all just regurgitate common sense ideas or follow popular trends. Linchpin is NOT one of these books.

I love Godin’s take on how we have all been trained from childhood to conform and consume. Our societies have produced armies of people who follow the rules and produce only what is required. It is no wonder that so many jobs are lost to automation or outsourcing. If you are just following procedures and policies in your work or business then don’t be surprised if your job disappears.

Godin’s antidote for our economic malaise is to become an artist. He uses the term ‘artist’ in a broad sense;

Art is an original gift, a connection that changes the recipient, a human ability to make a difference.
Art isn’t a painting or even a poem, it’s something that any of us can do. If you interact with others,
you have the platform to create something new—something that changes everything. I call that art.

This is a great book that I highly recommend for anyone interested in personal development and success. I felt the book spoke to me personally on many levels and many of the ideas are similar to the topics I am focusing on my blogs. Here is a video I recently did for Untemplater.com covering some of the same concepts.

Seth Godin gave a great talk about the ideas in Linchpin which you can listen for free on his blog.

There is also a related ebook called Brainwashed that Godin wrote on ChangeThis.com.

Do work that matters.
Four words available to anyone. They’re here if you want them. The economy just gave you lever-
age—the leverage to make a difference, the leverage to spread your ideas and the leverage to
have impact. More people have more leverage (more chances and more power) to change the world
than at any other time in history. What are you going to do about it? When?

The99Percent.com has a great video of Seth Godin talking about overcoming the resistance that stops people from executing their ideas.

Go and buy the book! Then take action to become an artist. If you are not trying to connect and contribute to the world, then what is the point?

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