Home > Finances, Getting Your Business Started, Managerial Accounting, Marketing and Sales, Putting It All Together > Will “Buggy Whips” Be the Downfall of Your Business?

Will “Buggy Whips” Be the Downfall of Your Business?

What does your company have in common with a buggy whip maker? In today’s business environment a “buggy whip” has come to symbolize any line of business that either has become or is in the process of becoming obsolete. Buggy whip makers were unable to recreate themselves when the automobile replaced all of those carriages. There were 13,000 businesses in the wagon and carriage industry in 1890. One of the few that was able to make a transition into automobile industry was Studebaker Brothers Machine Company.  They began as a blacksmith shop in 1852 and had the resources and the foresight to buy smaller companies that provided them with the metalworking expertise necessary to enter the automobile industry. By 1913 they were second only to Ford in automobile production.  That lasted until the 1960’s when they could not compete with the Big 3.  They however, had made the transition that few buggy whip makers did.

Certainly formerly successful  businesses can and have become “buggy whips’ .  Montgomery Ward started as a dry-goods mail-order business in 1872.  After World War II, the company had become the 3rd largest department store chain. However, in the 1950’s the company failed to recognize the move of America’s middle class to the suburbs. Its competitors, Sears, Macy’s, J.C. Penney and Dillard’s established anchor stores at the new shopping malls sprouting up in the ever-expanding suburbs. That was only one of a series of missteps.  By May 2001 Montgomery Ward was gone.

Sometimes it is products and services within a business that become a “buggy whip.” The only place a person sees VHS tapes today is at a garage sale.  They were replaced with DVD’s.  Now digital streaming from companies like Netflix and Hulu are threatening the DVD business.  In 2009 Blockbuster had 60,000 employees. They filed bankruptcy in 2010 and were bought out by Dish Network. By April 2011 Dish announced it would only keep 500 Blockbuster stores open.  At its peak, Blockbuster had more than 4,000 stores. Just this month Dish announced they would be closing all unprofitable stores, a number way below the targeted 500.

Technology is changing how we communicate, read books, market our products, disseminate information. In 2000, I was in a corporate meeting discussing the future of technology.  A technology consultant was telling us that by 2010 our cell phone would be the center of communication and connection to “all things” for the consumer.  We looked at our little flip phones with the antenna and thought “really?” In today’s competitive, every-changing environment the threat of becoming a “buggy whip” is an ever-present danger.  Are you constantly looking at the trends of your industry?  Who and where is your competition? What is changing and more importantly what are you going to do about it?

“Buggy whips” can also be the processes, technology, marketing and sales strategies that we use in the day-to-day operation of our business. Just watching an episode of “Mad Men” shows you how much advertising and marketing have changed.  The internet and social media are allowing individuals, entrepreneurs and small business owners to market their products and services to a world-wide audience. A home-based jewelry maker used to sell their creations at local craft shows or small jewelry stores.  Now because of companies like eBay and Etsy, that same jewelry maker can sell their wares all over the world. Are you taking advantage of the free marketing and advertising available to you. Are you using your financial information to make critical decisions about your company? Financial software used properly allows you to have the same access to power of your financials that at one time was only available to the “big guys.”

Temporarily, change your name to Sherlock Holmes and go on a “buggy whip” investigation.    Look at your business from the inside and the outside.  How do your customers see you? Are you still providing products and services that “somehow enhance their lives”? What does your competition look like? How has it changed? Are you missing opportunities to increase your revenue streams? How can you increase your value to your customer? Has your marketing strategy adapted to the changing technology? Can your financial records tell you if your marketing and advertising efforts are actually paying off? Is your sales staff adjusting the trends in your business?  Find out what your customers want. If you conduct a proper, in-depth investigation you will find things you are doing right; but if you are honest with yourself, you will find some things that need improvement or maybe are missing entirely. Keeping doing what you doing right, but look at your deficiencies and develop a plan to fix them.

Your business future, your livelihood, your legacy depend on it.

 

 

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: