One upside of being a small player in business is flexibility. Before you’ve gone too far down the garden path, and before you’ve invested too much money, you can take advantage of your ability to react to demands in the market. When starting out in business for yourself, it’s hard to know which aspect of your business will ‘take.’ Our friend Debbi Arnold of D.A. Consulting originally thought she’d be designing marketing brochures but it turned out that her clients demanded her services as a consultant, and she is now a successful business coach. We didn’t know what our business was going to be when it “grew up” either – that’s actually why we called ourselves Admiral Road and not ‘fuzzyblankets.com.’ It took a few years before we could define ourselves as an online personalized baby blanket company.
This week Dragons’ Den featured Bill Walsh, a Calgary-based lawyer who invented the Swing Jacket, a training product designed to improve your golf swing. Walsh asked for $750k for a third of his company in order to resuscitate an idea that had gone bust. Once upon a time, via an infomercial, Walsh sold over 100,000 Swing Jackets and earned over $10 million in revenue. While manufacturing his product overseas, Walsh received one batch of inventory that was highly defective. After that and other missteps, he ran out of cash and had to pull the product off the market. He has invested $400,000 in the business, has mortgaged his home and still hasn’t recovered financially. With no money, now he wants to get back into the same game.
Given Walsh’s lack of cash and seeming inability to manage his finances, the Dragons suggested pursuing a different model – one in which Walsh doesn’t run the company but instead collects royalties on the idea. Then, he’d have a viable business model. When Walsh refused, Kevin O’Leary accused him of being “bull-headed.”
Walsh has demonstrated that he can generate sales, but he’s also being stubborn. He can’t see that won’t be able to raise the money to re-launch his business as it was before. If, however, he were willing to be flexible about how he saw his role in the company, he just might be able to climb out of the hole he’s in. Kevin O’Leary didn’t have a problem with the product, but he told Walsh that he “was the problem.”
If something in your business isn’t working as it should, you can keep banging your head against the wall. Or, you can be flexible. Changing course a little might be just the answer.
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