The Focus Audit: Is Your Business Trying to Do Too Much?

Commercial Laundry X proudly lists their services: “We serve hotels, hospitals, restaurants, party rental companies, and industrial facilities. We offer both hospitality and healthcare bed linens, mats, mops, microfiber and bar towels, aprons, and a variety of napkins and tablecloths in 32 different shades and 14 sizes. Oh, and we do uniforms.”

Sounds impressive, right? Sounds full-service. Sounds like revenue opportunity.

Here’s what that list tells me: This business is probably mediocre at producing, marketing, and profiting from most of these offerings.

Want to know who’s eating Commercial Laundry X’s lunch? Cintas. They started small, as many commercial laundries did; a family-owned business collecting dirty rags at factories, cleaning them and then selling them right back. At the time of this writing, they’re worth north of $80 billion. How? They chose to focus on becoming unbeatable at one thing—uniforms. When they added offerings, they added them strategically in ways that strengthened their core offering instead of diluting it. Towels get wrapped up in “workplace supplies” but uniforms remained always at the forefront.

They didn’t chase hospital bed linens, restaurant tablecloths, or party rental inventory. They said no to complexity and yes to domination of their chosen niche.

Be honest – when you first read the word Cintas, what was the first thing that popped into your head? Was it uniforms? Or was it bar towels, logo mats, and automated external defibrillators? Sure, they sell those too – but they didn’t build an empire being known for a dozen different products. They built it on owning the word “uniforms” in customers’ minds. And that mental real estate is worth $80 billion.

Pick any industry. Same story.

Consider Chick-fil-A’s laser focus on chicken sandwiches—they generate industry-leading revenue per location, reportedly averaging more than double McDonalds’ revenue per location. And speaking of laser focus—did you know Chick-fil-A started as “The Dwarf Grill”? Sometimes focus is as simple as fixing your name; “The Dwarf Grill” could have sold anything, which was exactly the problem.

Meanwhile, Casper—remember them?—tried to become “the Nike of sleep” by supplementing their core mattress product offering with dog beds, nightlights, and sleep gadgets. They never turned a profit and were eventually acquired for a fraction of their peak billion-dollar valuation.  

Time and again, a clear pattern emerges in business: Focus wins. Diversification, if not executed in a way that supports core offerings, often destroys value.

So, what does your business do? Better question: What would your customers say you do? If any two of them would describe what you do differently, you’re not focused—you’re undefined—and undefined markets don’t pay premiums. Would you want to pay extra for ‘miscellaneous’ on your next vendor invoice?

But here’s what makes this problem so insidious: it doesn’t feel like a problem at first. More services mean more revenue opportunities, right? Your sales team has more to sell. Your clients can get everything from one vendor. It all sounds logical; brilliant really. What could go wrong?

Let me show you why that logic is bankrupting businesses across so many industries.

I’ve watched businesses destroy themselves by looking for ways to say “Yes!” to every revenue opportunity. They chase diversification because it sounds smart. They want to be “full-service” because they think that’s what clients demand. They’re terrified of saying no to money.

But the numbers tell a hard truth we may not want to hear—being diversified is not always smart and sometimes the appeal of hedging risk or gobbling up market share just leads to paper thin profits. Those who can maintain “menu discipline” often show us how incredibly savvy this can be: YETI maintains extraordinary margins by focusing—and staying focused—on premium coolers and drinkware.

Can you picture YETI without immediately seeing that indestructible cooler with the ridiculous price tag that you (and I) chose to put out of mind while we forked over the cash? No? That’s the point.

Do they have a select few additional product offerings outside of coolers and drinkware? Absolutely, but they are always complementary and never threaten to confuse the market on what YETI does: make top of the line coolers and drinkware that people happily pay a premium for.

Meanwhile, Allbirds saw their margins compress dramatically as they chased a full line of apparel, taking their eye off the core offering that brought them initial success—footwear. No idea who Allbirds is? That’s the point.

I get it. Reading about YETI and Allbirds is fun, sure, but does this have any connection to YOUR business? Your payroll? Your specific challenges?

You need to know if this even begins to apply to you.

Fair enough. Let’s get specific about what “doing too much” actually looks like in day-to-day operations.

Try this exercise: “We do _____ for _____.”

If you need to pause for breath while trying to describe what it is you do, and who you do it for, you’re unfocused.

“We provide hygienically clean linen services for hospitals” is focused. “We do hospitality, healthcare, party rental linens, and industrial uniform services” is not.

Your sales team stumbles through every pitch, trying to explain what you do. Your employees are confused about who you serve, serving everyone poorly. Your prospects shop on price alone. Of course they do—you don’t have a strong value proposition; you have a forgettable list of weak ones.

Take a hard look at the breakdown of your revenue streams, preferably in a pie chart. If you see a bunch of small slices (or worse, a sliver so thin it’s just a line with an annoying callout tag above it), you’re not running a business. You’re running a collection of side hustles that happen to share a common space.

In-N-Out has kept virtually the same menu since the 1970s—burgers, fries, shakes. That’s it. No chicken sandwiches, no salads, no breakfast menu. Yet they generate millions per location and have cult-like customer loyalty in their markets. When you dominate one thing, everything else becomes easier.

Different clients, different chaos. Your hotels want their linens folded just so. Hospitals need you to follow infection control protocols that would make a microchip manufacturing clean room jealous. That industrial account? They just want their uniforms back sometime this month, preferably clean.

Your staff spend a large part of their day trying to remember what’s different about today; they’re playing operational roulette, spinning between contradictory requirements every hour. Problems don’t get solved; they get patched until next week’s crisis.

Here’s an uncomfortable truth: Some clients love you, others barely tolerate you, and it all depends on whether Steve or Sarah is working that day. That’s not a staffing problem—it’s a focus problem. Your best people can’t become experts in anything because they’re too busy being mediocre at everything.

Look at Traeger. Wood pellet grills. That’s it. Not gas, not charcoal—just wood pellet. Every engineer, every customer service rep, every marketing dollar focused on one thing. Result? They own their category while competitors fight over the “everything else.”

This one might hurt: Your top line looks great in presentations, but that margin percentage keeps sliding south. Every new service you added came with hidden costs—specialized training, unique inventory, custom processes, compliance requirements, management headaches. The complexity tax is real, and you’re paying it on every invoice you generate.

Dutch Bros proves the power of focus: they do drive-thru coffee. Extremely limited food menu, no dining rooms, minimal complexity. Result? They’re one of the fastest-growing restaurant chains in America with impressive margins to match.

What does Dutch Bros do? You already know: coffee. Through a window. Not complicated, not confusing. Just profitable.

Whether these warning signs hit close to home or you’re simply curious about your focus, there’s an easy way to find out. Take another 10 minutes and answer these seven questions honestly. Your score will tell you exactly where you stand.

Question 1: Can you describe what you do and who you do it for in one breath?

• Focused: Yes, I can describe it simply and clearly
• Unfocused: No, I run out of air listing everything

Question 2: Does any single service or segment represent more than 50% of your revenue?

• Focused: Yes, one service/segment clearly dominates
• Unfocused: No, revenue is spread thinly across multiple services/segments

Question 3: Do different client types require significantly different processes?

• Focused: No, processes are mostly standardized between client types
• Unfocused: Yes, each client type needs custom handling or tools to service

Question 4: Could a new employee explain your core service after one week?

• Focused: Yes, it’s straightforward enough to learn quickly
• Unfocused: No, it takes months to understand what we do

Question 5: Have you said “yes” to revenue opportunities outside your core in the last 6 months?

• Focused: No, we only take core business
• Unfocused: Yes, we’ve taken non-core work for the revenue (or worse, just to keep a competitor from getting it)

Question 6: Do you have custom processes for more than 25% of your clients?

• Focused: No, most clients align with standard processes/services
• Unfocused: Yes, we customize heavily for many clients

Question 7: Has your gross margin percentage decreased as revenue increased?

• Focused: No, margins have held steady or improved
• Unfocused: Yes, margins have declined despite growth

Your Score

0-2 Unfocused Answers: You’re Focused

Good work! Stay disciplined and don’t let mission creep destroy what you’ve built.

3-4 Unfocused Answers: At Risk

Warning signs are appearing. Time to evaluate your strategy before it becomes a problem.

5-7 Unfocused Answers: Over-Diversified

You’re trying to do too much and it’s destroying your profitability. Keep reading, you need to fix this.

If you scored poorly, you are likely feeling one of two things right now: defensive (“but all these services are profitable!”) or overwhelmed (“how do I untangle this mess?”).

Both reactions are normal. Choosing what to focus on might feel like trying to choose which of your best employees to let go during a downturn—every option feels wrong because you’ve invested so much in each one. But it doesn’t have to be that dramatic, and it doesn’t have to be complicated.

Step 1: Map Your Revenue and Margin by Segment

Create a simple table listing each service line or client type. Calculate:

1. Annual Revenue – How much does this segment generate?
2. Gross Margin % – What’s the actual profitability?
3. Operational Complexity – Rate it Low, Medium, or High

Don’t overthink this. You know which clients make you money and which ones make you crazy.

Step 2: Evaluate Strategic Position

For each segment, ask:

• Can we DOMINATE this segment in our market?
• Do we have a competitive advantage here?
• Are these good clients? (You know—they pay on time, reasonable expectations, don’t call at 10PM)

Step 3: Consider Growth Potential

Which segment has room to grow without hitting a ceiling? Don’t build your business around a dying market just because it’s 30% of current revenue.

The Decision Formula

KEEP: High margin + Low complexity + Competitive advantage + Growth potential

CONSIDER: Mid-range on most factors, but not a strategic pursuit

CUT: Low margin + High complexity + Weak position + Limited growth

You already know which parts of your business you love and which ones you dread. Trust your gut—it’s probably right.

Months 1-2: Stop Taking New Bad-Fit Clients

Effective immediately:

• Stop bidding on or pursuing work outside your core segment
• Redirect all sales and marketing effort toward your core
• Finish existing commitments but don’t renew

Months 3-4: Segment Your Existing Clients

Create three Tiers:

• Tier A (Core segment, great clients): Focus on growing these relationships
• Tier B (Non-core but profitable): Maintain but don’t invest in growing this Tier
• Tier C (Non-core and unprofitable): Exit strategy required—start planning

Months 5-7: Communicate the Transition

Be transparent with your team and clients. Give Tier C clients referrals to competitors who specialize in their needs and allow them to exit any current contract without penalty. Most will leave gracefully; they know they’re getting mediocre service anyway and may even feel trapped by a contract or the hassle of finding a new provider. Make it easy for them.

Months 8-12: Reinvest in Your Core

Now you have bandwidth. Use it:

• Build systems specific to your chosen focus/core
• Hire and develop specialists, not generalists
• Market yourself as THE expert (and be prepared to prove it)
• Optimize every aspect of serving your core

By month 12, expect:

• 10-20% revenue dip (temporary)
• 5-10 point margin improvement (permanent)
• Dramatically reduced operational complexity
• Measurably better quality and consistency
• Stronger client loyalty and referrals

Those focused clients will send you their peers and tell competitors they’re not interested; they’ve found their specialist.

The evidence: Chick-fil-A’s chicken focus produces industry-leading economics. YETI commands premium prices with laser focus on outdoor products. Dutch Bros generates impressive margins with just drive-thru coffee. Meanwhile, Casper’s “sleep ecosystem” led to massive losses and a fire-sale acquisition. Allbirds’ expansion beyond footwear turned black ink to red ink and made them forgettable.

The lesson: Focus creates pricing power, operational efficiency, and brand clarity. Chasing unrelated opportunities destroys all three.

I know what you’re thinking. You’re mentally listing all the reasons why your situation is different. Why you can’t afford to turn away revenue. Why your market demands variety or is too small for “menu discipline.” Why focusing is too risky—what if there’s another pandemic?

Here’s what I’d tell Commercial Laundry X if they called me tomorrow: You’re already taking the biggest risk possible—being forgettable. When nobody can remember what you’re great at, price is the only thing left to discuss. And there’s always someone willing to go cheaper.

Cintas didn’t build an $80 billion business by doing everything. They built it by being the inevitable choice (in the minds of their customers) for a few things.

Test it yourself: Say “Chic-fil-A” to someone. They’ll say “chicken”. Say “YETI”. They’ll say “coolers.” Say your business name. What would they say? Would they all say the same thing?

Your focused competitor is out there right now, saying no to distractions and yes to dominance. Every day you delay choosing your focus is another day they pull further ahead.

If you can’t describe what you do and who you do it for in one sentence, you don’t have a business—you have a collection of opportunities that’s destroying your profitability.

Stop being “full-service”. Start being essential.

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Questions about your specific situation? Email me at info@thinkbuildgrow.net—I’m happy to discuss whether you’re over-diversified and what to do about it.

Thomas Geller is the Principal of TBG Advisory, specializing in operational and financial transformation for small and mid-sized companies. He’s spent over 15 years as COO and CFO watching poorly executed diversification destroy otherwise healthy businesses. His approach: Think Strategically. Build Deliberately. Grow Sustainably.