Over the last few weeks, I’ve become aware of a fundamental dilemma entrepreneurs face regularly: What opportunities should they focus their attention on?
Personally, I deal with this problem on a regular basis. I have been known to come up with a lot of ideas on my own; and to make matters worse, not a week goes by where someone doesn’t say to me, “Doug, what you should really do is (fill in the blank).” There is no way I can pursue every opportunity that comes my way.
How should entrepreneurs decide which opportunities they should pursue and which opportunities to ignore? I’ll tell you how most entrepreneurs approach this question. They ask a simple (and on the face of it, intelligent) question: “Can I make money on this idea?”
The problem with this question is that every potentially successful growth company I have ever come across has many more potential money making opportunities than it has resources to implement them. Peter Drucker, the late guru of management consulting, said the primary reason small businesses go out of business is not because of starvation (the inability to get profitable business), but because of indigestion (the inability to manage the business they already have effectively). Michael Gerber, author of The E-Myth, says the number one reason for business failure is undercapitalization.
They’re both saying the same thing. Companies that sustain growth concentrate their resources only on those activities they are great at. A company can only be great at so many things; and if they’re not great they’re just a commodity.
What are your thoughts? How do you make decisions like this? Share your thoughts with me and if I get enough interesting responses I’ll share them in a future blog posting. Click here to send your thoughts.
Until next time, Doug