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Smarter Businesses Focus on the Intangibles

Too many times I see small business hiding itself in a closed cupboard under a misconception that the hiding is effective protection. By that I mean they’re trying to hide their products and techniques. The simple fact is that a bar of soap is a bar of soap. Is a bar of soap.

What I mean to say is that anything tangible about your business can be stolen by a competitor. Your product can be reverse engineered, staff can be poached, processes can be copied. There isn’t much in the tangible realm that can’t be copied or stolen in short order once a determined entity puts you in their sites.

Competitors can also copy your technology, critical personnel, logo, uniforms and location. It’s all tangible, so it can all be copied or stolen.

In that sense, I find the idea of small businesses hiding in a dark cupboard counter-productive. There is no long-term competitive advantage to be had in a handful of easily copied pieces. It’s really a hand of fool’s sawdust.

The sustainable value in your small business isn’t directly in the product. You can change products or adapt your product line, especially if you’re small and strategically nimble. The real value isn’t in your manager, your chemist or your financial management. They can be replaced with a little hiccup even if the poached staff take away your secrets.

I’d suggest that in small business it’s even advantageous to see critical staff and skills move around the industry (cross-pollination of ideas). Silicon Valley is a great example of that cross-pollination in hyper-drive.

Your design, logo, uniforms, price, distribution and location can and probably will be copied or stolen, too. If you’re turning healthy profit from a market it’s the equivalent of dripping fresh blood over a coral reef. The predators want some of your action.

Small business needs to spend more time outside the cupboard working on those intangibles. Building relatioships. Fostering synergies between people and processes. Building brand equity.

Intangibles are what really provide long-term competitive advantage in business, not the fragrance profile of a soap, or a distribution channel. Focus on what can’t be copied or stolen by your competitors.

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Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark and I live in the Derwent Valley in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a mazer & a yeast farmer (making beer, fruit wine and mead as by-products of continuous improvement in my farming practices). I'm a photographer, although my film cameras are currently silent. I do not tolerate idiots. I do not tolerate bigotry. I do not tolerate excuses. Let's be clear, if you sit with my enemies you my are my enemy for life.

Blogger. Thinker. Brewer. Drinker. Life partner to the amazing and incredible Megan.

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