The Mile Wide Trap
One of the traps entrepreneurs frequently fall into is broadening their product or service offering to a small group of "great customers". But here's the thing. Pretty soon you're an inch deep, and a mile wide in offerings and the only person in your company with the depth of industry experience to deliver all of the services is you. And you find yourself caught in The Mile Wide Trap.
Here's how it goes. You start a PR agency and land your first big client. The client asks you to handle a series of regional events. You hire some helpers, and your business begins to grow. You do a great job promoting the events, so the client asks you to handle their annual sales conference. Again you deliver with style and creativity.
Your client is impressed by your innovative approach and asks you to handle some of the creative for their next advertising campaign. You started a PR agency, not an advertising agency. But this is a GREAT client, so you agree to help out with the ads.
Noticing your depth of experience and knowledge, your client asks you to take a look at their website. Your team has no experience with web design, but you've done some website work in the past. Not wanting to disappoint the client, you decide to handle the projects your team can't execute yourself.
You're not worried about new business development. The expanding needs of a small handful of "great customers" is making your company ever busier — and more profitable.
Then one day, you look at your monthly P&L statement and realize that for the first time, your sales are flat. And the next month it happens again and then again. You've run out of hours in the day to sell, and, inadvertently, fallen into The Mile Wide Trap.
The Mile Wide Trap
The Mile Wide Trap ensnares you when you do an excellent job of serving a small number of good customers, and they keep asking you do handle more of their work. And you keep broadening the list of products and services they want you to supply.
Before you know it, you're an inch deep, and a mile wide in offering and the only person in the company with the depth of industry experience to deliver is you! But you're trapped because your expenses have crept up as your revenue has exploded — leaving you dependent on the sales from a small group of demanding customers.
With no hours left in the day, your company stalls and you find yourself caught on a hamster wheel just trying to keep what you've got.
The Solution: Sell less stuff to more people
Instead of selling more things to a few customers, concentrate on selling a few things to a lot of customers.
Most design firms are founded by creative types who get themselves into trouble by offering a broad range of services. You start out designing websites, and before you know it you're creating brochures and signage, running advertising campaigns, analyzing user experiences, optimizing SEO, the list goes on. And to a handful of clients.
In contrast, Ehos3 founder, Scott Schwertly knew that to scale-up beyond himself, he needed his employees to do the work. So Scott decided to focus on a niche in the design business: presentations.
Schwertly's focus on presentations has allowed him to train his employees to follow his system for designing presentations. Everything is standardized — from the proposal to project management to the final invoice — so employees can follow a system that doesn't require him. Ethos3 has scaled up nicely and counts Coca-Cola, Nike, and eBay among its 300+ customers.
Another example is Flikli.com. They're a video production studio, but unlike most production studios, these folks focus exclusively on two-minute animated "explainer" videos that explain a company's value proposition simply and effectively. Their focus on creating one specific type of product allows them to standardize their pricing and give their team a step-by-step guide to making great explainer videos.
It's easy to fall into The Mile Wide Trap: you do great work, and a customer wants more of you. But it's a trap that will eventually choke off your growth. The way out is to follow the example set by companies like Flikli and Ethos3 and focus on selling less stuff to more people.
For more advice on building a valuable business, don't miss:
- What is my business worth?
- 6 Ways You Can Make Your Business More Durable Now (and Sellable in the Future)
- Can my business be purpose-driven and profitable?
- Random Acts of Marketing
- Working on your core values? Beware these value traps
And find out how you can work with me if you want help escaping the mile-wide trap.
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