Take advantage of your constraints

2005Mar-AustinTypeTour-032 - Hyde Park Gym Muscle

Typically a body-builder would focus on whichever muscle is weakest, and work, work, work that muscle until it is strong.

So, too, for the entrepreneur.  You should know all about your business’s challenges and constraints, isolate them, and focus on them.  This is where you will make the most progress.

Suppose that your business is limited by your ability to produce 10 gadgets a month.  You could sell 20, if only you could make so many.  Isolate your constraint.  Focus on it.  How can you work it out?

First of all, develop a plan to increase your production to 20 sweaters.  But that will take a long time.

You might find a better solution by thinking about your business in terms of its limitations.  If your production is limited to 10 gadgets, how can you maximize your revenues and profits for every gadget that you can make?

The New York City restaurant Momfoku Ko has 12 seats. Dinner takes two hours and will set you back a cool $125 per person.  Lunch is served three days a week for $175.  And if you’re a vegetarian then don’t bother.

Think about it.  12 seats in your restaurant can be a problem.  But 12 seats can give you an opportunity to create an exclusive and expensive two-Michelin-star restaurant with a name that probably shouldn’t be repeated in polite company.

What are your constraints?  How can you best take advantage of them?  There are two basic strategies:

  1. Work to open up your constraint, so that it no longer limits you
  2. Exploit the constraint, so that it works to your advantage.

[Image: 2005Mar-AustinTypeTour-032 – Hyde Park Gym Muscle by mrflip, on Flickr]

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

3 Responses to “Take advantage of your constraints”

  1. I’m really impressed with your writing skills and also with the layout on your weblog. Is this a paid theme or did you customize it yourself? Either way keep up the excellent quality writing, it is rare to see a nice blog like this one these days.

Trackbacks/Pingbacks

  1. How to exploit your constraints « Accountinator - April 5, 2012

    […] to exploit your constraints « Previous / Next » By The Accountinator (Mark P. Holtzman) / April 5, 2012 / Operations, […]

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