I plopped down on the well-worn couch he had in his office on one of my regular hang-out visits. He was a local business guy I’ve been friends with for over a decade. It was always a good way to kill a lunch hour with some good conversation and some local fare.
“I’m telling you,” he started. “This business is not what is used to be. Registrations are down a bit from last year.”
“Do you really want to be the last buggy whip maker?” I asked him point blank.
He’d been grousing about the business going down slowly for the past five years or so. I usually empathized, but just let it go. I wasn’t about to tell him what he should be doing.
But today, it was just too much.
“What do you mean?” he asked a bit shocked that I asked him such a stupid question out of nowhere.
The truth is the question did not really come out of nowhere. He was in an industry that was booming ten years ago, before the market started to consolidate a bit. Over the past several years, many of his competitors had closed up shop due to a lack of demand for his kind of services. His company bumped up a bit every time one of them closed, but slowly went down as the demographic moved on and automated. Eventually, he will be the only game in town and his long-term client base will shrink below what he needs to sustain his company at the level of profitability he needs.
“The way I see it — from the outside looking it,” I started, “is you have really one of two choices; assuming you don’t want to be the last buggy-whip maker. If you do, just keep doing what you’re doing.”
He did not want to be the last buggy whip maker. I don’t know anyone who wants to be the last buggy whip maker.
“You could quit investing in growing your business, suck in all the expenses and start hoarding cash. Your company will eventually die an expected, painless death. You then invest that cash into something else that you really want to be doing but your current clients won’t let you.”
“Or?” he asked.
“You could sell the place for as much as you can get to someone who does not believe you are making buggy whips,” I said. “Choose, but choose quickly before the marketplace figures out you are making buggy whips.”
Markets change. Technology changes. Client needs change.
Change is the reward for successfully solving a problem. Recognize that early and move on.
Nobody really wants to be the last buggy whip maker.