Most owners can name their biggest product or service by revenue in seconds. Fewer can name the one that takes up the most of their own time. Fewer still can say whether those are the same, and the ones who can are often uncomfortable with the answer.
That gap matters because a business’s range is rarely chosen. It accumulates. A good customer asks for something adjacent, and saying no seems unhelpful. A capable staff member wants to start a new service, and refusing risks losing them. A supplier offers a product line that seems an easy add. Each decision is reasonable on its own, none is ever reviewed alongside the others, and the business ends up offering far more than anyone would have designed from scratch.
This article explains what breadth really costs, why it feels safer than it is, four tests for which lines reward focus, a simple way to see where the owner’s attention actually goes, and a set of questions for deciding what to keep, change or stop. It is general information for owners deciding what their business should offer. It is not an argument for doing only one thing. It is an argument for knowing what each thing costs.
What breadth costs
Breadth costs a business in three ways, and no single report shows all three together:
- Unit cost. More lines mean shorter runs, more changeovers, more stock variants, more exceptions and more complexity in shared work like purchasing, scheduling and invoicing. Much of that cost never lands on the line that causes it. It is spread across overheads, which makes small lines look more profitable and core lines look worse than they are.
- Customer recall. A business known for one thing comes to mind when that thing is needed. A business known for seven may come to mind for none, and must spend more on selling to be considered. Customers remember what you are clearly good at.
- Owner and management attention. Attention is the scarcest resource in a small business and has no price on it. It tends to go where the noise is: the difficult customer, the newest venture, the line that keeps having problems. Quiet, compounding work gets what is left.
Why breadth feels safer than it is
- More lines look like diversification. But several lines that depend on the same customers, the same channel, the same equipment and the same owner are one risk with several names. They tend to struggle together.
- Small lines seem cheap because they use spare capacity. Genuine spare capacity is rarer than it looks. What small lines usually consume is priority: the best staff member’s time, the first slot on the machine, the owner’s afternoon.
- Lines are judged on margin alone. Margin is measurable; attention is not. A line with a reasonable margin that absorbs a fifth of the owner’s week and a disproportionate share of problems is not the contributor its margin suggests.
- Nobody prunes their own line. The person who started or runs a line is rarely the right person to assess whether it should continue. Pruning is a decision for the owner, made across all lines at once.
Four tests for what rewards focus
Some lines reward concentrated effort; others absorb it without compounding. Four questions help tell them apart:
| Test | Question | A weak answer means |
|---|---|---|
| Standard | Can the output be defined and checked consistently? | Quality depends on opinion, so it is hard to standardise or delegate |
| Scale | Does serving twice the volume cost much less than twice as much? | Growth adds cost in proportion; volume buys little |
| Cash | Does it turn into cash quickly and predictably? | Growth consumes cash, so success creates a funding problem |
| Independence | Does it work without one particular person’s judgement? | It depends on an individual and will not survive their absence |
A line that passes all four rewards investment: improvements stick, quality holds as volume grows and advantage builds. A line that fails several will absorb effort without compounding, however attractive its margin. Failing a test is not a verdict to stop. A line may be worth keeping because it anchors an important customer relationship, opens doors to other work or fulfils an obligation. But those reasons should be stated, not assumed. The focusing business resources without losing flexibility article covers concentrating effort while keeping room to adapt.
Count where attention goes
The most useful diagnostic is also the least used. For a month, the owner and key managers note roughly where their time goes: meetings, problems, decisions, customer issues, informal conversations. Attribute each to a product, service or customer, then set it beside each line’s contribution.
The result is usually uncomfortable. Attention clusters on the smallest and most difficult customers, the newest venture and the old line nobody wants to end. A line producing a small share of contribution may be taking a large share of the owner’s week. That time is not available for the work only the owner can do: pricing, key customers, hiring, choosing what comes next. The where the owner’s time goes article covers treating interruptions as evidence and protecting time for the future.
Centralise the back room, keep the customer edge local
For businesses with several sites, outlets or teams, breadth also shows up as duplication. Each location runs its own version of the same behind-the-scenes work: preparation, ordering, testing, administration. The business pays for the same capability many times and gets a slightly different result each time.
A useful test for any activity: does the customer care where it is done, and does variation help anyone? If both answers are no, it is a candidate for doing once, centrally, to a single standard. Work that depends on relationships, local knowledge and fast response belongs at the customer edge. Two cautions apply. A central function is a single point of failure and a queue, so it needs spare capacity and a genuine service commitment to the sites it serves. And if it is cheaper but slower, sites will quietly rebuild their own versions, and the business will pay twice.
Prune variants, not just lines
Breadth also grows inside lines. A product range adds sizes, colours, finishes and custom options; a service adds packages and exceptions. Each variant brings its own changeovers, stock, training and room for error. Look at how much of each line’s sales come from its most popular variants, using your own sales data rather than a rule of thumb. Often a small share of variants carries most of the volume. A practical answer is a standard range made well and quickly, with genuinely custom work available at a price that reflects what it really costs.
Treat adding as seriously as removing
The discipline that prunes a range should also guard its entrance. Before adding a product, service or customer segment, apply the same four tests, estimate how much owner and management attention it will need in its first year, and say what it will displace. Where the case is uncertain, run it as a trial with a review date and agreed criteria for stopping. That way, a new line earns its place on evidence, and ending it is a planned outcome rather than an awkward retreat.
Questions for each line
Review each line on a regular cycle, with review rather than automatic continuation as the default:
- Would we start this today, knowing what it costs in money, people and attention?
- What would we do with the capacity it releases? If the honest answer is nothing, stopping saves less than it seems, because the costs will not leave with it. If it frees a scarce person or the owner’s time for something better, the saving is real.
- What does it carry for other lines? Shared overheads, a customer relationship, a channel, a licence. These are legitimate reasons to keep a marginal line, but name them.
- What does it cost to exit? Commitments to customers, stock, contracts, staff and reputation. Lines that are cheap to exit can be tested first.
- Who loses if it stops? Customers, staff, the person who championed it. Plan how to treat them fairly.
The stopping projects well article covers closing things down cleanly, including staff and customers.
A worked example
This is an illustration. A bakery business has grown over ten years into six lines: three cafés, wholesale bread to local businesses, catering, online celebration cakes, weekend baking classes and retail coffee beans. Annual contribution, after direct costs, is roughly:
| Line | Contribution |
|---|---|
| Cafés | $260,000 |
| Wholesale | $180,000 |
| Catering | $70,000 |
| Online cakes | $40,000 |
| Retail coffee beans | $20,000 |
| Baking classes | $15,000 |
| Total | $585,000 |
The owner keeps a rough attention log for four weeks. Baking classes, about 2.6% of contribution, take about a quarter of the owner’s working time: scheduling, enquiries, refunds, setting up and covering for absent instructors. Wholesale, the most scalable and cash-reliable line, receives almost none, even though two cafés nearby have asked about regular supply.
Applying the four tests, wholesale passes all four. Classes fail on scale and independence: each class costs much the same to run regardless of growth, and they depend on the owner. Online cakes pass on cash but fail on standard, because the range has grown to 40 designs, each made to order with frequent waste.
The owner decides:
- Stop the baking classes after honouring all existing bookings, giving three months’ notice and offering a final series of sold-out sessions.
- Cut the cake range from 40 designs to 18, the ones that make up most orders, reducing waste and changeovers.
- Centralise baking for all three cafés in one kitchen to a single standard, while keeping café service, staffing and customer relationships local.
- Give the released time to wholesale, starting with the two cafés that had already asked.
Within a year, wholesale contribution grows by about $50,000, cake waste falls noticeably and the owner has regular time each week for pricing and key customers. Retail coffee beans stay: they carry little contribution but are a regular reason for café customers to visit, a reason the owner now writes down.
How this applies to a small Australian business
- List every product, service and customer segment you offer.
- Estimate contribution for each, after direct costs.
- Keep an attention log for a month.
- Apply the four tests to see which lines reward focus.
- Name the reasons for keeping marginal lines.
- Do shared behind-the-scenes work once, where customers do not care where it happens.
- Plan exits carefully, honouring commitments to customers and staff.
- Review the range regularly, not only when something breaks.
Signals worth watching
- The owner busiest on the smallest lines.
- Customers unsure what the business is known for.
- Range growing every year and never shrinking.
- Overheads rising faster than sales.
- Each site doing its own version of the same work.
- A strong line starved of attention while weak lines absorb it.
- Custom variants priced the same as standard ones.
Common mistakes
- Adding lines without reviewing the whole range.
- Judging lines on margin alone.
- Assuming small lines use spare capacity.
- Letting a line’s champion decide its future.
- Stopping a line without planning what the freed capacity will do.
- Centralising without a service commitment to the sites.
Frequently asked questions
Isn’t focus risky if one line struggles? It can be. But several lines sharing the same customers, staff and owner are not as diversified as they look. Decide which risks you are actually spreading.
How do we estimate contribution if our accounts are not split by line? Start roughly: direct costs by line, and a sensible estimate of the shared costs each line clearly drives. Precision matters less than seeing the order of magnitude.
What about lines customers expect us to offer? That is a legitimate reason to keep a line. Write it down, and check whether customers really would leave if it went.
How often should we review the range? Once a year for the whole range, and whenever a line repeatedly consumes management time.
What if staff are attached to a line we stop? Involve them early, explain the reasoning and show where their skills will be used. Many people prefer clear focus to being stretched across too many things.
Should we tell customers why we stopped something? Briefly and honestly, with enough notice and an alternative where possible.
Questions to ask
- Which line takes the most of the owner’s time, and what does it contribute?
- Which lines pass the four tests, and which fail several?
- Would we start each line today?
- What would we do with the capacity a line releases?
- Which behind-the-scenes work is duplicated across sites?
- What are we known for, and does our range support it?
Bringing it together
Breadth arrives one reasonable decision at a time and leaves only by deliberate choice. Count what each line really costs in unit cost, customer recall and attention, not just margin. Use the four tests to see which lines reward focus, keep an attention log to see where time actually goes, and name the reasons for keeping marginal lines. Do shared back-room work once and keep customer-facing work local. Then prune deliberately, honour your commitments, and give the freed capacity to the lines that compound.
Source: KEVOS notes, drawing on teaching material on portfolio breadth, executive attention and generic strategies, including M. E. Porter’s account of cost leadership, differentiation and focus. Examples and figures in this article are illustrations. This article is general information.
