It takes courage to turn away a paying customer. But sometimes that is what you should do.
Let’s say you have a business that repairs car brakes. You have three mechanics who work for you. One of them is a master mechanic. He can do just about anything. Someone comes into your shop and asks you to repair his muffler. You could use the business, so you take the job.
Fast-forward one year and you have become a regular auto repair shop with no unique selling proposition. You are plenty busy, but you are not making nearly the profit you projected.
By generalizing, you gave up three significant advantages:
- You lost the overhead savings that come from doing only one thing.
- You went from a business that had a memorable purpose to something very ordinary and forgettable.
- You gave up the high profit margins that come from specializing in one product or service.
MacDonald’s sells several dozen products today. But when Roy Kroc took it over, he focused on hamburgers and fries. If he had succumbed to the temptation of turning his restaurant into a diner, he would have become just another diner owner instead of one of the most successful restaurateurs in American history.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]