Avoid the Mile-Wide Trap in Your Business COVID 19 Response

What is the difference between a mile-wide versus a mile-deep approach to building your business? And why does it matter?

As many companies’ growth has stalled due to Covid-19’s shelter-in-place, unemployment, reduced consumption, workplace protection and other changes and limitations, some are looking everywhere for new businesses, even scrambling to diversify by adding new products and services to sell.

However, before a necessary pivot, it is important to make sure that you don’t fall into the “Mile Wide Trap” as you look to diversify your business.

The Mile Wide Trap

The Mile Wide Trap first starts to ensnare you when you do an excellent job serving a small number of great customers and they ask you to handle more of their DIFFERENT TYPES of work. You keep delivering, and they keep broadening the list of products and services they want you to supply. Your company is wildly profitable serving the expanding needs of this small list of “great customers” so you keep falling deeper and deeper into what eventually becomes “the mile wide but an inch deep” trap. 

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. But you’re trapped because your expenses have crept up as your revenue has increased – leaving you dependent on the sales you get from a small group of demanding customers. And the chase never ends.

Another example of the Mile Wide Trap is when there is a disruption in the market, and you look to capitalize by doing something your company has not done before. This may be particularly attractive during this time of economic upheaval caused by Coronavirus.

A Mile Deep is Better Than a Mile Wide

Instead of selling more things to a few customers, first concentrate on understanding your company’s core focus – the intersection of your passion and your expertise, then sell a few things to a lot of customers. 

In order to scale up a company, employees, not owners, need to be able to execute work with quality and speed. This is much easier to accomplish repeatedly when the company operates within its core focus where everyone is already trained to do their best. 

As an extreme example, Ferrari represents a high-performance racing type automobile. Ferrari’s core focus is: “We build cars, symbols of Italian excellence the world over, and we do so to win on both road and track.” They are a mile deep in what they do – high performance Italian cars. They know that the gold is buried deep. One might think they could go wide and diversify into high performance motorcycles, snowmobiles or even airplanes, however, they stay close to their core focus and avoid the Mile Wide Trap.

When the markets seem to be in turmoil, it is easy to fall into The Mile Wide Trap that will eventually choke off your growth.   Do pivot when necessary, but more often than not, doubling down on your core focus will provide the long term, scalable growth you are looking for.

If you’re curious to benchmark your company on growth potential and the other seven factors that drive your company’s value, take 13 minutes and get your Value Builder Score here:   https://bit.ly/36nPCKn

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At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ .

It’s All About Assets!

Business owners are often fully devoted to running and growing their companies that they hardly pay attention to both business and personal assets’ acquisition, accumulation, protection, and transition.

In March 2020, Executive Forum Silicon Valley (“EFSV”) members had a great educational discussion with Nico Wiborg of the New York Life Insurance Company around a holistic view of how business owners and leaders should think about, protect and plan for business and personal finances. The educational discussion was segmented into four key areas: 

  • Sources of Income
  • Threats to Income and Assets
  • Application of Income and Assets
  • Legacy Choices

As business owners and leaders, we are often expected to provide the right answers to our customers, teams, and employees. At Executive Forums Silicon Valley, we often focus our peer groups to make sure that leaders also are skilled at asking the right questions. It is through asking the right questions that the best and correct answers often emerge. 

Income and Asset Protection, Retirement and Estate Planning

When it comes to Addressing the Six Key Areas of Capital Accumulation and Protection, it is necessary to ask the right questions. Nico Wiborg led the group through a comprehensive review of the six key areas with thought-provoking questions that resulted in a rich discussion between the business owners. Questions that were covered and addressed with the business owners are shown in the table below.

Asset AreaKey Questions to Ask
Income Protection(Source)When will you be finished accumulating assets?How many assets will be required to replace future income?What other sources can provide the necessary income?
Income Tax(Threat)Are you trying to predict future tax rates?Do you know how to tax-diversify for the best flexibility?What strategies do you have for a rising tax rate environment? 
Capital Risk(Threat)Do you have a specific strategy to grow your assets (not income)?Do you monitor, review, and adjust your strategy on a regular basis?How are you using your business for income now and legacy later?
Asset Protection(Threat)Are you aware of the impact of creditors, lawsuits, and judgments?Do you have assets that you can shift to a different owner?Have you integrated insurance into your asset protection plan?
Retirement Plans(Application)Do you have enough assets to allow your income to completely stop?How much do you need and now much more needs to be set aside?Where should you put the assets for growth, protection, and income?
Estate Planning(Legacy)Do you have a proper inventory and accounting of your assets?Are you directing your assets or letting the existing law dictate your plan?How do you want your heirs to receive your legacy? 

Get a holistic picture of your assets and planning ahead

Sometimes as business leaders we are so focused on leading our teams and serving our customers that we neglect to rise up to 50,000 feet and take a holistic view of our assets and establish a strategy that covers all of the sources, threats, application, and legacy issues. If you think you have answers but are unsure if you are being asked the right questions, I would highly recommend that you contact Nico Wiborg (nwiborg@ft.newyorklife.com 408 655-5964) and have a great discussion about how to build and protect your assets to create the legacy that you deserve. Wouldn’t you feel better if you did that right now?

About EFSV

Executive Forum Silicon Valley (“EFSV”) is a platform where successful business owners, CEOs, and executives act as their fellow collaborators, co-inventors, partners and even “co-conspirators”, in getting a clear picture of where they want to go, what stands in the way, and how to achieve their respective growth goals. Forum members share resources, conduct self-assessment, and identify opportunities.  Members get clarity about the way forward,  obtain strategic insights to overcome their leadership blind spots.  They hold each other accountable with support and encouragement. If you are interested in learning more about becoming a member at Executive Forum Silicon Valley, please contact gperkins@executiveforums.com or call 408-901-0321. For more information visit http://www.execforumssv.com/ 

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