The natural inclination of business owners is to take on any and every kind of restoration or repair work they believe they can achieve. Some of them decide to “do it all” because they mistakenly think that will help their sales and, hopefully, their profit.
The tendency of owners to want to appeal to as many customers as possible causes them to keep adding more and more services to the list of what they do. In reality, when you specialize you are almost always more profitable. Part of that reason is because there is an economy of scale that comes into place: a stronger message, a focus on one or two specific services, and better and more appropriate equipment for the job.
Specializing gives contractors the ability to differentiate and to become the preferred vendor more easily. When people choose a contractor, they usually don’t think, “I want those guys because they do it all.” However, when there’s a water-damaged or flooded home or building, the companies that are “top-of-mind” are the ones that specialize only in that particular service.
I’ve met contractors who proudly showed me their line card (list of services) and it’s one full page or flyer of 35 or 40 different services that are offered. I’m talking about restoration contractors who often end up doing all kinds of services, but they routinely are not good at any of them!
If I needed a heart transplant, I certainly don’t want to hire a doctor that “does it all.” I want a specialist who performs those same surgeries every day and is thought of as the top in that field. Those that are specialists are almost always charging the highest fees — and people pay it.
I personally know a plumbing company that for 30 years (yes, he’s family) was the highest priced plumber in the region. His belief was “if they don’t want to pay my price, they can go to the cheaper plumber.” Over the years, he saw hundreds of customers hire him after they used the cheap plumber and were not happy. As a side note, he recently sold the company for millions of dollars and then retired.
The natural tendency of business owners is to try appeal to all buyers, wrongly believing that providing all kinds of services will make them more profitable. If you do that, however, you will have a less profitable business. When you specialize and differentiate, you will be much more successful and have far fewer headaches. Offering dozens of semi-related services usually creates confusion, a lack of focus, a frustrated staff, wasted energy and more.
Are you a disaster contractor that offers water mitigation, sewage cleanup, fire restoration, contents pack-out, mold remediation, carpet cleaning, duct cleaning, pressure washing, trauma scene cleanup, reconstruction, electronics restoration and even more? What do you do best? What makes you the most profit? What takes up the most time with the least results? How do you train and keep skilled people in all those different services? Why are you trying to be all things to all people? You can’t be all things to all people.
This “everything” mentality debilitates small- and medium-sized businesses, dangerously jeopardizing the very roots of their existence (and often puts them out of business). Remember, during the 1990s Apple suffered from an expansive product line that almost led it to bankruptcy. You probably know the story. It took the return of Apple’s cofounder, Steve Jobs, as CEO to turn the company around. How did he do it? He eliminated nonessential product lines of the company, keeping only four. Some of his eliminations were profitable lines. When discussing the amazing turnaround in a 2008 interview, Jobs said, “People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things.”
Pepsi-Cola stopped trying to be all things to all people in order to compete with its rival Coca-Cola. Pepsi went from being outsold by Coca-Cola in the late 1950s by five to one to being only 10% behind in total sales in the United States. There seems to be a foolish belief that the wider net catches more customers in spite of numerous examples to the contrary.
I admit the challenge is deciding which core services will get the business on the track to success the quickest and the most profitably. No matter how broad you consider the appeal of your product or service, not everyone will be interested in it. Know your sweet spot. The theory that just because you build it (or offer it) then they will call is completely misguided.
Analyze your P&L and determine what services are you best at. What ones make you the most profit? Don’t think you have to do it all just to keep some adjuster of insurance carrier happy. It’s straightforward: specializing enables you to differentiate, and that enables you to be top of mind for your customers. Don’t be one of those companies that is a jack of all trades but a master of none. According to Wikipedia, the saying continues with “yet far better than a master of one.” So, pick two or three profitable services and eliminate the rest.