For small businesses (me included), its a challenge to stay focused on your strategy and say no to new opportunities that don’t fit. But very  high-performing companies do just that–in almost a fanatical way.

A recent piece by Booz & Co. —Turning Tight Money into Smart  Money— shows how limited funding can focus a company in much the same way as focused strategy can. Said differently, Booz & Co makes the case that business owners and managers invest more wisely when they have less money to play with. Companies that have limited funds tend to make more prudent  investments that lead to higher profitably when compared to companies that had  more access to funding.

So how might business owners use the results of this study?

• Intentionally keep budgets tight and allocated heavily towards strategic activities.
• Starve those activities that don’t support where you are headed or those that take you into unfamiliar territory.
• Or better yet, just stop doing those things that your gut tells you no longer matter.

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