Why am I in business

‘What Business Are You In?’

This morning I read a fantastic article from Francis Battaglia over at Independent Talk KFNX Radio, and thought this would be a really good question to pose for all of my customers and friends. Who are you and whom and what you serve? Without question, the answer to this needs to be absolutely clear in your mind. What is it that you provide for your customers that no one else does? There are hundreds of people who sell the same product or service as you, so what is it that makes you different from all the others? Why would people come to you? For example, Starbucks, sells an “atmosphere”, and not a cup of coffee!

Good food for thought. It’s time to get clarity!

Here’s the article:

‘What Business Are You In?’

This the famous question from the classic business consultant, Peter Drucker. This was one of Drucker’s key questions for management to figure out, the who, what, where, why and how of their business.

The point of the question was to really challenge business owners to understand what their real objectives are.

Don’t assume you know what business you’re in. Drucker loved to ask executives “What business are you in?” because they often missed the mark, defining their organization in terms that were too narrow or not properly attuned to customers’ needs. “That the question is so rarely asked—at least in a clear and sharp form—and so rarely given adequate study and thought, is perhaps the most important single cause of business failure,” Drucker wrote in The Practice of Management.

Do understand your business? Do you know how to bring value to your customers to keep them long term?

A great modern example of this is Starbucks. Most people would assume Starbucks is in the coffee business. Obviously they do sell coffee, but the real business they are in according to its CEO Howard Shultz is ‘customer service’.

People can go to lots of places for a cup of coffee just as good and probably cheaper. They choose Starbucks for the atmosphere. Customers think of the Seattle brand as a unique experience and this allows them to charge more.

Harley Davidson does not sell motorbikes. It sells the concept of freedom to middle-aged men.

Apple does not sell I-Pads. It sells a lifestyle on the cutting edge. It sells coolness.

What is it that your business really sells? What is the true value that customers get from your products or services?

You have to know the answers to these questions to provide that value. Your business will never grow, or more importantly adapt until you understand this.


As always, Winners Know Their Numbers!

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