Thursday, February 24, 2011

RIGHTSIZING YOUR BUSINESS


The magic of the periodic table is that every atom is one thing or another--there isn't a stable element that's sort of oxygen and sort of nitrogen. If there were, there would be millions of elements, not a few hundred.
That's because electrons are (more or less) either here or there. The quantum levels ensure that there are no weird hybrids.
A business follows a similar model. A local mom and pop store is just the right size for mom and for pop. The rent is low enough for the two of them to cover it. It's stable. They can't afford a $200,000 a year CFO. It wouldn't be a stable situation.
This is backwards but here you go: businesses that exist exist because the marketplace allows them to function at the right size. There were a lot of bowling alleys in the 1960s because the number of people you needed to run one plus the rent was just covered by the revenue you could expect. There was a right size, one that people were willing to take on and run. SETHGODIN

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