Excess capacity is just wasted money.
Manufacturers have always known this, but recently, the concept is being applied in innovative ways. By now, you’ve probably heard of the car-sharing service called Uber. Everyday people sign up to be the equivalent of a taxi driver to take strangers to their destinations for a fee.
But what is Uber at its heart? It’s a marketplace for excess capacity. People with excess time and cars that would otherwise sit idle are paired up with people who need rides. Uber matches up buyers (riders) and sellers (people with cars that aren’t being fully utilized).
The concept is simple, but the results are impressive — the company is heading for a $50 billion valuation — and it isn’t just limited to car sharing. Companies such as eaHelp are matching executive assistants looking for part-time work with executives who only need occasional help. They have hundreds of assistants, some of whom are stay-at-home moms looking to stay in the workforce, and the company has many more qualified people looking for a flexible schedule. Then there’s Airbnb, which matches people who have space in their homes with worldwide travelers looking for an experience outside of the normal hotel stay. The list of these “marketplace” companies that bring buyers and sellers together is rapidly growing. They maximize efficiency and eliminate unused capacity, regardless of whether it’s the passenger seat in your car, the spare bedroom of your home or the 15 hours a week a stay-at-home mom has to dedicate to executive assistant duties.
The question is, are you sitting on a similar opportunity in your industry? Do you have the ability to serve as the intermediary, bringing buyers and sellers together? If you do, it’s imperative that you move now, because the first-to-market advantage is huge in this space. Critical mass is needed for any marketplace to function, and once the main player is established, it’s hard for others to do the same.
If you don’t see a way to create a marketplace, make sure you look at the key ingredient to these companies’ successes — utilizing excess capacity. Look at your company and examine where you have capacity. It might be with machines, or it might be with people, but there may be opportunities to explore new options that can supplement your revenue. Or, you might be able to use the excess capacity for the greater good, donating time to help local charities or someone in need.
Taking a closer look at unused capacity in your business might open your eyes to possibilities you hadn’t thought of before. Who knows, maybe you’ll be the Uber for your industry.
Fred Koury is president and CEO of Smart Business Network Inc., the publisher of Smart Business Magazine and operates SBN Interactive, a content marketing firm.
