Reilly Newman | The profit is in the difference. As any business knows, the difference left over from what you make(revenue) and what it costs to make that(expenses) is your profit. Profitability is the lifeblood of any business because profits are what make the risk, effort, and time worth it. For an investment to work, it must have profit. If it doesn’t, then it’s not an investment. Unfortunately, a lot of businesses are not profitable. They are barely making it by. Why is that? They aren’t “different” enough.
The key to profitability is difference. Yes, mathematically profits are left after subtracting expenses from the revenue, but beyond just the financials, difference matters. Difference is key to finding the edge or hidden gap in the market. Difference is how you create leverage. The financial profit left over is leverage for you to grow the business. Difference in value delivered is leverage in the competitive market. Difference in your brand is leverage for obtaining personal favor and preference.
The point is not being different just for the sake of being different. It’s about not being the same as everyone else…about “not following suit”. Not just following what everyone else is doing or imitate by doing as someone else has done. By not being the same, you create a gap. You create a difference… an arbitrage of taking a specific value from one market and bringing it to perhaps a market where it is foreign, new, and different. This is what Nike did to sportswear, Apple did to computers, and Starbucks did to coffee. It’s how the difference is produced to increase value. When there is opportunity for difference, then there is opportunity for leverage and greater profit.
A few ways difference can be discovered:
• How you sell (ex. Amazon)
• What you sell (ex. Trader Joes)
• Why you sell (ex. Tom’s Shoes)
• How you deliver (ex. Dominos)
• How you tell your story (ex. Old Spice)
• How you create (ex. Banksy)
• How you make someone feel (ex. Disney)
These points of leverage have been carved out and made empires. Empires are built on the power of difference.
