Would You Profit More by Making Less?
A small business owner recently told us about an innovative opportunity he had passed up. (Actually, he said “Maybe.” He wanted to think about it. Hence, our conversation with him.)
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Another small business owner had offered him a turn-key operation. The first owner said he and his people had been talking about offering a similar product to their customers.
He didn’t accept the offer because:
1. They could do it themselves
So we asked: Why haven’t they? They haven’t had the budget or the manpower. However, he didn’t expect to have the necessary resources going forward either.
He also acknowledged that his firm doesn’t have the same sort of expertise in this particular product as the other firm. We think this is at least as much of a contributor as resources to it not getting developed.
2. It might cannibalize sales
He was afraid that this new product may compete with one of his existing products. This new product capitalized on new technology. His product didn’t.
He admitted that his customers might want both of them. But let’s assume that’s not the case:
If his customers prefer a new product instead of the one he’s offering them, wouldn’t he be better off at least making some money from it? Otherwise, his customers will find the new product somewhere else.
3. He had to share the profit
When he sold his own products, he got to keep 100% of the money earned. With the program he turned down, he was only going to get 20%.
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I’ll paraphrase something I often heard my Dad say: “20% of something is better than 100% of nothing.”
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That’s one of my favorite quotes from your Dad, George. It makes the point – right now, they’re not making anything on the new product. To make 20% or 10% or even 1% would be money in the bank!
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Sometimes, as small business owners, our independent nature works against us. Sometimes, it pays to collaborate with other like-minded business owners. You may make more money by making less and, in the process, reach BIGG success!
Direct link to The BIGG Success Show audio file | podcast:
https://traffic.libsyn.com/biggsuccess/01153-061924.mp3
