Sold Any Beaver Pelts Lately?

Let’s suppose you have a modestly successful business.  It has supported your life for a couple of decades.  You have a competent staff, a strong reputation and little remaining business debt.  The things that have made the business strong are well-ingrained habits that have made the business easier to manage in the last few years.  You and your accountant have realized that the business has a value that may one day be a significant part of your retirement savings.

Yet, lately something doesn’t feel quite the same.  Sales have been flat, costs keep rising, and your resulting profits are dwindling.  It seems harder to hold prices at your traditional markup levels.  A new competitor has emerged who doesn’t seem to have the quality you provide, but is making inroads into market share.  Your key supplier hasn’t kept up with some of the newer features that competitors have introduced, but they have always treated you well, and your sales rep’s advice has helped you grow to where you are today.  As you put together your financial projections for next year, you sense that your numbers are too optimistic, yet the picture they paint is for another gloomy year.

As a business coach, I am frequently guiding business owners to work on developing strong systems in their company that help them get things done more automatically and consistently, regardless of who is running the “system”.  Systems have proven to lead to higher profits, more value in the business, and a happier lifestyle for the owner.  Yet there often comes a time in the life of the business where something more than systems are required to get to the proverbial “next level”.  Sometimes that means re-tooling or re-directing a business that has simply become too ordinary and predictable while competitors scramble vigorously to catch up, and then pass the one-time leader in the market.  Just as with the old definition of insanity (If you always do what you’ve always done, you’ll always get what you always got), you can’t keep doing the same old things.

Yet, change is hard.  What if you don’t have any good ideas?  What if you’re afraid to step away from the successful habits that have made the business what it is today?  What if you don’t have the same appetite for risk that you once did?  After all, this business is your retirement, and you want to protect it.

Businesses that last, really last, well beyond the lifetime of the current owners can only do so if they re-invent themselves from time to time.  Recently I saw a picture of the logo of the Hudson Bay Company, and it reminded me that I used to read about them when I enjoyed stories of the trapping and voyageur days of North American history.  Hudson Bay is still going after all these years, now known as Canada’s most prominent department store operating under well-known names such as Lord & Taylor and Saks Fifth Avenue.  My guess is that there is not a lot of beaver pelt trading going on these days at Hudson Bay Company.  Somehow, through the three-and-a-half centuries since their founding in 1670, they realized that they needed to adjust their business model to be relevant to the market they were serving, or wanted to serve.

In your business, an important part of your leadership is “steering the ship”.  If it’s time to change course, perhaps enlisting the help of advisors, or a coach, would stimulate some thinking, and even some excitement, over a new direction.  An analysis of your strengths, weaknesses, opportunities and trends that is a part of any good strategic planning effort may point out obvious areas where you could shift gears and create a new revenue stream or profit center.  And it doesn’t need to be a drastic, wholesale change, either.  Evolutionary business change can often make all the difference, and be accomplished with less risk and cost than a complete makeover.  The important thing is to scout out new opportunities, since in the end, it may be more risky to do nothing than to strike out in a new direction.