“Far Out”

October 21, 2006

How many times have you been in a meeting discussing new business opportunities when someone comes up with a great idea that has nothing to do with your existing business? And, how many people in the meeting are ready to jump on the idea and start running? Indeed, how many of those ideas were pursued?

It is so tempting to run after what appears to be a good idea which may not be in the areas where your company has experience or expertise. So, good idea or bad idea to pursue such new business opportunities?

It all depends. If you work for say Kraft, would you suggest a steel mill purchase? Obviously not. But, what if you worked for GM? My belief is that you stick to your knitting… stay within the business systems and models you know. If you are Kraft, stay in the food business…. If GM stay in the transportation business.

Having said the above, if you find a business which is very close to your areas of operation and can provide efficiencies and scalability given your Company’s expertise, then a purchase of a leading Company in that field may make sense. BUT…. avoid businesses which are far afield from what you know… chances of success are very slim. So, stay away from “far out” ideas and businesses.

For opportunities that seem “close” to your Company’s areas of expertise, do your homework. Are those areas growing? Who are the key competitors? Why is your concept better then competition? Can your competitors easily copy your product/service once you launch? What are the barriers to entry in terms of capital? Distribution? Manufacturing? etc.?

So, far out is a no no…..

Comments?????

Rich

P.S…. Here is a “free” idea for e-bay…. where are the restaurants, barber shops, lawn mowing services, painters, etc?????? Where are the service companies????? Hey guys this is a “close in” opportunity that could be BIG……

Bizvice:  Strategy, Marketing & Entrepreneurship

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