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Posted: May 12, 2011

Is your lemonade stand on a closed road?

Putting it at the end of the block might be a mistake

Todd Ordal

It's spring and the lemonade stands - staffed by budding young entrepreneurs - are starting to pop up. This is a great learning experience for a young lass or lad, but might it also teach us something?

On the way home from a recent bike ride, I took a road that I enjoy and ride on frequently. I saw a large "Road Closed" sign, but figured I could find a path through on my bike. I continued another mile down a big hill to the construction site. As I suspected, I got through.

Strangely, however, a young girl sat about a block up the hill - well past the sign announcing the road closure - with a lemonade stand. She was too far away to attract the construction workers and well beyond the revenue-killing "Road Closed" sign. I thought about stopping to give her a bit of free consulting, but my pro bono dance card was already full.

I got to thinking, How many businesses are all spooled up and ready to go but metaphorically positioned on a closed road? There are many closed roads in business, such as:

• Having a retail store with poor ingress and egress (When a young couple asked an old Irishman for directions, he said, "Well, if I were going there, I wouldn't start here!")
• Selling a great product that's focused on the wrong market (This is like selling refrigerators to polar bears.)
• Risking capital in a business that has high risk and potential for government intervention (Would you invest in pot dispensaries at this point?)
• Trying to grow a capital-dependent business without the requisite growth capital (As a business owner once said to me, "How can I be broke? I'm profitable and my business is growing!")
• Ignoring new technology (Look no further than Blockbuster and the music industry. ...)

In business, it's easy to tell that the road is closed once you hit the construction area, but often there are signs announcing the closure that we don't see because we're not looking, or we chose to ignore them because we're breathing our own exhaust. The fact that you love lemonade and that it's convenient for you to put your lemonade stand at the end of your block doesn't mean it's good business practice.

Risk analysis, scanning the horizon and taking the time to look "beyond the four walls" are critical to avoiding closed roads. Is your business positioned on a highway, or are you like the little girl with the lemonade stand?

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Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at http://www.appliedstrategy.info,  303-527-0417 or todd@appliedstrategy.info

Enjoy this article? Sign up to get ColoradoBiz Exclusives. The opinions expressed in this article are solely that of the author and do not represent ColoradoBiz magazine. Comments on articles will be removed if they include personal attacks.

Readers Respond

I hope the little girl story was made up. She was probably in front of her house - the only place her parents would let her open shop. If not, if she just randomly picked a place, then she seriously needed the money and could have used your advice. You were too busy to help a little girl because "you do too many nice things already?" By David Ess on 2011 05 12

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