My industry is changing. Do I change my business or stick with what I know?

I want to grow my business, but the economics of my industry have changed. Do I have to change my business to succeed or can I stick with doing what I am good at? 

A pharmacist was telling me about his moderately successful pharmacy business. He loved the business and wanted to grow it, but was disappointed that, despite his great passion and flair for pharmacy, his business success would depend more and more on his ability as a retailer.

Had he known, he said, back in his university days that his technical training would count less to his financial success than his artistic display of Easter eggs, he would have chosen a different career.

Pharmacists aren’t alone in this dilemma. Optometrists too are finding it tough, with their optical skills playing second fiddle to their ability to shift Gucci frames.

And there are countless other examples of trained professionals frustrated that the economics of their industry are changing, and that the very thing that makes their business money is quite distinct from their technical speciality.

So the question is, when the industry changes – when money is to be made by retailing product rather than selling your specialist services – do you have to embrace the change or can you stick to that which you are good at?

I believe that you can stick to what you are good at, but that you need to make a conscious decision to do so, rather than simply decline to make the change.

Certainly there are plenty of examples of businesses that have set out to buck the trend and chosen a different path to economic success – Southwest Airlines must be the most often quoted example – but importantly, they planned to do it.

As a start, I suggest that businesses looking for profitable growth in a changing industry:

• Take a detailed look at the strengths and weaknesses of the business.
• List the products and services at which they can, or do, excel.
• Decide what is or can be “uncommon” about their offering. So in an environment where pharmacies are glorified shops, the pharmacist who devotes his effort to personal medication consultation is “uncommon”.
• Identify the core customer who is most likely to buy their “uncommon” offering in sufficient quantity to make a profit (this step is so important; identifying a “profitable” customer).
• Change the way they do business to make their “uncommon” offering the centre of their effort.
• Communicate with their customers so the element that is “uncommon” is loud and clear. Think about simple messages which are as explicit as “we spend our time fixing your medication not our window displays”.

So although the economics of his industry are changing, or indeed have changed, my pharmacist friend has options. He does not have to become any more of a retail expert than he already is.

Of course the irony is that if his “uncommon” offering is centred on personal service, it is highly likely that he will generate a customer base that trusts him, and will, irrespective of his retailing skills, buy the off-the-shelf products anyway.

Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses.  Julia is the author of “How to Bake a Business”  and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).

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