The Market Will Not Bear Generalists

 

Originally published June 10, 2013:

I once knew someone that claimed that he could coach companies to make more profit. Fantastic. But I could never get him to tell me what he actually did. I spoke with him multiple times, read his entire website, and looked at all of his posts online just to try to figure out what the service really was. To this day I still have no idea. Nothing that was ever said truly meant anything. Everything was some combination of vague non-statements and clichés:
“”
  • “Run your business more efficiently”
  • “Keep more of your profit”
  • “Increase revenue”
  • “Reduce expenses”
  • “Get more organized”

At a certain point I expected “buy low and sell high” and “a rolling stone gathers no moss” to be thrown in there. Sure they were good goals to have, but they didn’t mean anything. They didn’t tell you what he did, what value he was ostensibly providing, and how this would benefit your company. But in every sentence he managed to throw in some variation of “make more profit.” It reminded me of an old episode of the show South Park. In the admittedly ridiculous storyline, a group of gnomes went around stealing underpants from people’s dressers. When asked why, they invariably screamed “profit!” It was later revealed that this was their business model:

Phase 1 Phase 2 Phase 3
Collect Underpants ? Profit
Why am I even telling this story?
 
As small business owners, we are often operating in a very competitive environment. People are reluctant to spend any money and when they finally decide to they have a plethora of options. For any of us to succeed, we have to be specific and focused as to what we provide. In my mind, these are two related yet separate things.

Specific

The failure in the above example was obviously that nothing was clear. What was the service? What benefits would be derived from it and how? Why was it better than that of competitors? We need to make these things abundantly clear to clients and potential clients. Otherwise our pitch becomes nebulous and unappealing.

Focused

Even if we clearly showcase to clients the things above we still run a certain risk: trying too hard to do too many things. The phrase “jack of all trades” existed before “master of none” was tacked onto the end of it. If we try to be generalists and perform too many services, then we may lose credibility as to what we can actually do.
 
For instance, I’m an accountant. You would believe that I can do taxes, bookkeeping, and some other related services, right? But what if I also said that I could advise you on stocks and other financial matters? And then said that I could get you insurance policies? Also, that I had a realtor’s license and could sell your house for you? That I also could do your electrical work in your house? Perform veterinary surgery on your dog? At what point do you start wondering if can do any of those things well?
 
Bottom line: while not being overly limited in our services, we always want to stick to and advertise the areas in which we are truly experts. And when those are determined, we need to make sure those skills are clearly and effectively communicated to those we are doing business with.
 
Please give me a call or email me at micahfraim@fraimcpa.com if you have any matters you would like to discuss.IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.