I usually spend most of my time talking about the benefits of online businesses and how I believe the future of business will be predominately based around the internet economy. This weekend I read an article about how one business in particular, a manufacturing business, could continue operating at maximum output until 2018 because of the size of their order book.
If for whatever reason such as a massive shift of public opinion or a radical new competitor, Facebook was no longer deemed the social media platform of choice and their 800 million users fell away overnight, would Facebook still be able to run profitably until 2018? How far ahead is Facebook’s order book filled for advertising space? Just in case you think that could never happen, it happened to MySpace just with not as large numbers.
The manufacturing business that I am talking about is a goliath in the manufacturing industry and the aeronautical industry. It was voted business super brand of the year in 2011, provides engines for all the major airline fleets around the world and employs 22,000 people in the UK alone. This business is Rolls Royce!
In one of my previous posts I mentioned how I admired Steve Jobs and his forward thinking. He even removed the Apple Museum as he said that was the past and this was the future! At the headquarters Rolls Royce don’t even own a Rolls Royce car they sold the car manufacturing arm of the business off to the Germans many years ago. They now focus on engines for planes, ships and nuclear reactors.
I am not saying experiences gained along the way are not valuable; they are. They shape the person you have become and your business. However times change and small business owners need to continue pushing forward, not looking back.
What about education? By that I mean the fact that Rolls Royce offers a highly credible and sought after apprenticeship scheme that, in my eyes, rivals many undergraduate courses. Would I want my child to go to university only to graduate with a multiple 5 figure debt and still have no real world training? Or would I be happier for my child to get a solid education from one of the leading manufacturing organisations in the world, get true understanding of what a work ethic actually means and be in a strong position with a specialised skill behind them…
I guess I will only know when the time comes! At this moment in time however, knowing how competitive the job market is for undergraduates, I would opt for the latter choice every time.
Then there is the fact that the barriers to entry in the aeronautical and nuclear sector are huge. You can’t just rock up overnight and start building turbines for power stations; it would take years of political campaigning, decades of research and design and hundreds of millions, if not billions of dollars, to get a slice of the market.
Where am I going with all this? Good question. Well as stated at the very beginning I am a firm believer in internet based businesses being the future and if that is to be the case then behind that online front there has to be a product, solution or an asset of that business that is difficult to replicate and adds incredible value to the end user.
Many small businesses are beholden to their suppliers and if anything happened to that supply chain they could find themselves in hot water over night. In a previous article, the 1% rule, I mentioned that 1 percent of businesses create and build physical products, 9% wrap that product up in a service or provide an individual service, and the other 90% is the consumer.
Be part of the 1%! Create something of incredible value, package up your knowledge and experience and create a product that is yours that could act as the cornerstone of your business. At the beginning it may be in a competitive marketplace, but through experience you will be able to branch out and find more niches just like Rolls Royce did and the most profitable online businesses do. And then maybe you will be able to relax a bit knowing that for the next 18 yrs your business is taking care of you.