get out of the box

Have you ever heard the expression “Think outside the box”? Of course you do, who doesn’t? Roughly translated, it means thinking about things that people don’t normally think about. In business, it means finding and using the ideas that the competition is missing.

What is my point, you may ask, and why am I bringing this up? A few days ago, I had a conversation with another bookkeeper that irritated me greatly. The bookkeeper worked for a property management company that handled billing for a condominium association. I asked the bookkeeper if they had an email option where they could email their invoices instead of mailing them. In the most smug tone possible, the bookkeeper said, “We don’t do that. We have 1,200 condos that we bill for. It would be too much work to email everyone an invoice.”

“Do you have QuickBooks?” I asked him, intending to tell him how to set up the email option so he wouldn’t have to do any extra work anymore. (At the same time, she was thinking- well, how long does it take you to put all those bills in the envelopes? And how much does it cost you to buy stamps for all those envelopes? But of course I didn’t say that.)

“No, we don’t,” she snapped, clearly annoyed that I’d dared to ask. “We have (insert obscure accounting program here) which is the standard accounting program for property management companies. That program doesn’t have an email option.” And with that, our conversation was over.

When I got off the phone, all I could think about was how irritating the whole situation was. I could immediately see that the property management company, and the accountant, were “in a box”. They were using the “standard” accounting program for their industry instead of looking for something new and better. On top of that, they are not the only property management company/associations I deal with. I have dealt with many others, and I know for a fact that none of them offer to email invoices. They are all doing the same thing and using the same programs, and none of them have risen above or beyond their competition; they are all in the same box.

Can you see the problem with being “in the box”?

The problem of being “in the box”

As I have indicated in my profile, I not only do accounting, but I also do financial market viability reports. I have researched for hundreds of malls, museums, stadiums, concerts, and food and beverage facilities across the country. I’ve done research for major corporations like Paramount, Starbucks, the Academy Awards, and Kelloggs. I have had access to confidential information that will remain forever locked in my head. And you know what those big corporations always ask? They want to know what concepts are working successfully in other cities similar to theirs across the country. And this is the trend I’ve seen when I start researching a city:

In every city and town in the country, a “standard” (or “box”) type of business is created in that city. In other words, all the businesses in that area do the same. Your location has become the box. On top of that, they all offer the same services and products, and very few companies stand out from the rest, or “go outside the box.” Those that “come out of the box” and distinguish themselves. they become successful franchises. Those that don’t often end up making enough money to get by, and others fall on hard times.

An example of how companies put their companies “in the box”

You’re probably thinking that I don’t know what I’m talking about, or it just doesn’t make any sense. So here is an example. Consider the national chain, Chuck E Cheese. This “Family Entertainment Attraction with a Restaurant” has three staples they sell: arcade game entertainment, kid-approved food, and a party atmosphere. Last time I put out your SEC filing, I did an analysis of how much money each product made. This is how it broke down:

• On average, each arcade game generated approximately $11 per month. (I know, ridiculously low, right?)
• Most of the kid approved food was pizza, soft drinks and a very basic salad bar. The food and beverage element generates the majority of their profits, as much as 80% to 90% in some restaurants.
• Parties average $100 to $200 per group, which includes food and games. Most of their parties are on weekends.

This is the “core box pack”.

Now consider your competition in your area: the other “Family Entertainment Attractions with Restaurants” whether it be golf courses, lazer tag, skating rinks, bowling alleys, etc. Everyone in my area serves the same food: pizza, soda, hot dogs and nachos, in other words unhealthy food and soda. They all have arcade games. They all offer birthday parties with food and limited access to their other items. It’s the standard “box” and it becomes the standard because business owners look around their towns and cities and see what they think works for other businesses and then implement it in their own companies. They are unknowingly strengthening the cash register and thus making it difficult for all businesses to prosper. (Think about this: the last time you went to an arcade, how busy was it really?)

Other examples of being inside the box

• Have you ever been to an author’s book signing? Have you ever noticed what they give when they sign a book? An author, no matter how big or small, will deliver one of three things with his book: a bookmark, a postcard, or an empty book cover.
• Have you ever been to a smoothie shop? What do they serve? Shakes with boosters, and maybe a very, very small menu of “health foods”. On top of that, they all charge about $5 for their shakes.
• Have you ever been to a natural foods store? Almost all of them sell organic food products and vitamins.
• Burgers: These are almost always sold with fries.

The only way any of these businesses end up prospering is if they can differentiate themselves in some way, either through name recognition and brand preference, or by finding a location further removed from their competition.

How to think outside the box in a similar way to the greats

If you want to “get out of the box” and be as successful as the largest corporations, you need to do some research. You have to open your eyes and ears, and you have to pay attention. Here’s what to look for and ask if you really want to “go outside the box”:

1. Define your box: What is your local competition doing that you are also doing? Where are you all the same?
2. Next, look outside the box. What are similar businesses doing in other towns and cities that reflect your own population? What items are they selling that you can implement in your own business?
3. Listen to your customers. What items have your customers asked for that you’ve responded with the old “it’s the industry standard” answer? What services or products could you sell that would make their lives easier?
4. Recognize any new element. What can you offer your customers that your competition does not offer?
5. Analyze the New Item. What is the actual cost of that item? If it sells itself, will it make a profit? If it won’t make a profit, will it attract customers?
6. Implement the element if possible. The more elements you can successfully add and advertise for your business, the faster you will outpace your competition and the longer you will survive.