What Do We Really Want?
I’ve been thinking. When you ask minority entrepreneurs what they need most the number one and two answers you get consistently are contracts and capital. The answers are understandable but is that really what minority businesses need most? Contracts and capital are both critical elements to business success but neither is what entrepreneurs really want. What entrepreneurs really want (or should want) is profit, growth and ultimately wealth. The immediate and pressing needs of the business make it easy to lose site of these ultimate goals of owning your own business. Of course there is a gap between what a business has now and what they really want. If it is not contracts and capital what is it? When we talk with corporate customers and ask the same question what they say is suppliers have worked so hard on gaining access and servicing accounts they have ignored building a strong business strategy.
Strategy….Really?
Yes, I said strategy. Not sexy but true. Strategy got a bad name back in the 1990s when developing one took weeks and weeks of day long meetings, using complicated processes and coming out with thick documents no one used. Forget what you know about strategy for a moment and focus on what business strategy does for you. A strong strategy positions a business to win customers, deliver and grow profitability, and repeat the process enough to create profit, growth and wealth. Strategy leads to better contracts matching capabilities and opportunities. Better contracts lead to better profit because of better operations and more good volume.
Entrepreneurs often see strategy as something they just do not have time to do. No wonder they think what they need most is contracts and capital. Not only is business strategy critical, it is likely even more important for minority entrepreneurs because of some of the nuances of the supplier diversity process. Instead of ignoring the power of strategy why not find a rational way to make it fit into your business process.
Five critical questions
Strategy does not have to be a long, expensive process. There are five critical questions.
- How do we compete? For example, are we cheaper or better when compared to our competition?
- Where do we compete? What customers? What venues? What means? (i.e. channel strength)
- How do we consistently deliver on promise? What is our process? Who are our partners and suppliers? What must we improve?
- How do we make money? Where do profits come from? For example do we make money on service or equipment? Is our low cost structure our source of profit? How does volume affect our ability to make money?
- How do we plan to grow? New markets? New customers? New products? Will we do more with our existing customers? What is our marketing and sales process to support our approach to growth?
The answers to these questions do what strategy does. It keeps your business focused on the opportunities and activities that will give you what you really want; profit, growth and wealth. When you have these three elements you have a business that can win contracts and attract capital. Capital and contracts without good strategy is a business treadmill. You may be running hard but you are not going anywhere. Strategy makes sense. Your customers are asking for it and your business needs it. What else will it take to convince you how important it is? I don’t know. I’m just thinking.
- Dr. Melvin Gravely is the Managing Director of the Institute for Entrepreneurial Thinking. He is professionally dedicated to developing capacity and opportunity for minority entrepreneurs. He is the author of the popular books, The Lost Art of Entrepreneurship, When Black and White Make Green and his latest book, Getting to the Next Level: Business, Race and Our Common Goal to Be Competitive. Gravely is a sought after keynote speaker and respected advisor to major corporations, chambers of commerce executives, urban city leaders, and NMSDC affiliates.
Dr. Gravely is a frequent guest on radio stations from Los Angeles to New York and has been featured in many national publications including Black Enterprise Magazine, Ebony Magazine, Entrepreneur Magazine and American City Business Journals.
After ten successful years working for a large corporation, he co-founded a civil engineering firm and grew it into a multimillion dollar company. Dr. Gravely is the director of the Minority Business Accelerator, part of the Cincinnati USA Regional Chamber. He is also an author, speaker, and entrepreneur. Dr. Gravely speaks and writes on various topics related to entrepreneurial thinking and minority business development.
