By Brandon Cangany, CPA
Manager, Tax Services
In the wake of COVID, the business world is facing many challenges. Chief among them is the limited number of talent resources — all business owners are experiencing a shortage of labor at all levels. Given this shortage of labor along with supply chain disruptions, it may be important for you to narrow your scope of offerings and possible modify your business model. Customers still expect great service, so focus on those products or services that you are best at delivering and have the capacity to do so.
If you find yourself in the position of having limited talent right now, you’ll obviously need to limit the products and services you offer. Focus on the ones that bring in the most gross margin and push the others to the side for the time being — or at least invest less time and energy in them.
It can be hard to let go of a primary product or service and realize that it’s no longer as relevant as you once thought. But look at what CVS did. To grow and thrive as a healthcare company, it stopped selling cigarettes and tobacco products, despite the fact that its gross revenue from those products was in excess of a billion dollars. “The sale of tobacco products is inconsistent with our purpose — helping people on their path to better health,” said former CVS President and CEO Larry Merlo.
Take a cue from CVS. Don’t stubbornly stick to the same path as your competitors. Be open to detours and a wider purpose for your business. Here’s a popular related observation on the lack of a perpetuated success of the railroad industry: “Railroad industry folks thought they were in the railroad business when they should have understood they were in the transportation business.”
Right now, you have to hope for the best, prepare for the worst and persevere. Don’t be afraid of modifying or adopting a different business model. Remember, CVS is doing just fine without tobacco products behind the counter. And after all, evolution is key to survival. Embrace your business makeover!