I've been watching a business turn around. I had not expected it to happen; in fact, I had predicted just the opposite. The previous owner was a friend of mine, and I knew he wasn't making much money. When he told me he had a buyer, who was purchasing the inventory AND paying some good will, I said, "Try to sign with a straight face; then cash the check as soon a humanly possible."
The new owner has struck a balance between great customer service and not wasting time. When I have a technical question, he's happy to take however much time I need. When my question is answered, he's off to the next issue. That's actually rare: the people who love talking to customers often never stop talking, and thus never get much done.
The new owner has also set up an Internet marketing site. I thought that was a waste of time--it's a fairly competitive field. He's making it work, however. And the higher volume of business he does thanks to the Internet sales helps his overall profit margin.
All too often I think like an economist: markets are efficient. What I keep seeing, over and over, is that many businesses are not run very well, and as a result, other businesses can make big bucks by simply doing the basics right.
Seth Godin made that point recently in his blog. He described his advice to real estate agents suffering from a downturn, and explained how they could build stronger businesses by ultra-niching themselves. Excellent advice.
I spend a lot of time talking about the external forces impacting a business, and those external forces are certainly strong. But internal talent is even stronger.