We don’t start a business to be unsuccessful. We all want a successful business, right!?
I once heard a very successful entrepreneur speak about the difference between a successful business person with a profitable business and someone less successful. She put it very simply.
A successful business person is prepared
What did she mean by that?
One of the qualities often attributed to successful entrepreneurs is that they are risk takers.
I prefer to think about this in a slightly different way.
I believe that successful entrepreneurs have done their homework. They are continually researching their industry, their market, their competition and their own offer. This means, when an opportunity arises they can grab it with both hands.
To the outside this may look like risk; to them it’s a calculated business move based on knowledge, evidence and research.
They are prepared.
Once we start a business and offer out our product or service to our identified market we must constantly question our assumptions. We need ongoing clarity about our offer and our market.
To help you do that, I have put together seven questions that will help you to do that.
Constantly revisiting these questions will lessen you business risk and should increase successful business activity (profit).
So, let’s take a look at the seven questions you need to answer if you want a successful business.
Question 1. What Am I Selling?
Why do people buy your product or service?
Many businesses approach this question from a very self-centred place.
You see it demonstrated on websites with lots of the use of words like ‘I’ or ‘We’. Or at networking where business owners use their introduction opportunity to tell you what they do and how they do it.
Customers are more interested in their wants and needs than they are in you and how you do things.
The to answer to this question is not what you do. The answer is what they get.
It’s not your input; it’s their outcomes.
To answer this question write two, very short, sentences that describe what your product or service does to benefit your customer?
Question 2. Who Am I Selling It To?
Who is your typical customer?
Knowing – precisely – who you are targeting is essential. Without that information you will be wasting time, and money attracting the ‘wrong’ customer.
This means you have to keep accurate records of each customer or client.
Not just the name and address stuff.
You need to understand their drivers, what brought them to you in the first place, what problem did you solve for them and how happy were they with the outcome.
Only with this kind of data will you be able to hone your offer to meet the needs of your specific target customer.
To answer this question create an in-depth description of your target customer.
Question 3. Who Is Your Competition?
I asked this question once, during a training course I was delivering. A couple of the trainees said “What I do is so unique I don’t have any competition.”
Sorry. That’s rubbish!
You may be offering a totally new spin on something or a fantastic new approach, but totally unique. No.
Remember, your potential customers have a choice to make. Will it be you, or someone who does something the same / similar to you, that they choose?
It’s only by understanding you competition that you will be able to demonstrate what makes you different (a better choice?) for your customers.
Create a list of your competitors and use them as a benchmark for the growth and development of your business.
Question 4. What’s Happening in Your Market?
How up to date are you? How much time each day do you spend looking at news, data and trends? Do you know if there are any good things on the horizon for your industry or any bad things?
Market research is not something you only do once, at the start of your business. It’s an ongoing process.
Why did I ask about watching the news and following trends?
Remember, there are things totally out of your control that can have an impact on the success of your business. All it takes is a change in legislation, an updated piece of technology, maybe (dare I say it?) a global pandemic!
So when you are continuously assessing and reassessing your market, make sure you look a bit further afield because that’s where the curve balls come from. Are there any political, economic, technological, social, legal or environmental developments or changes that could have an impact on your product or service?
To answer this question create a PESTLE analysis for your business. Not sure what a PESTLE is? Check this out.
Question 5. Are You Charging the Right Price?
Pricing.
Always a sticky subject.
If you are a product-based business, there are is some clarity because you have to take into account the cost of production, the logistical costs of transportation and delivery, packaging costs etc. But then comes the mark-up.
Where are you placing your products within your market (going back to questions 3 and 4)? It’s your decision – cost-effective, superior product, exclusive?
If you are a service-based business selling knowledge, expertise and skills it can be a lot harder to get the pricing right.
Why?:
- How do you want to sell yourself within your market? Cost-effective, superior product, exclusive
- Skills and knowledge-based pricing is often be bundled up within a perception of personal value and self-esteem
So what’s the answer?
There isn’t one answer.
Pricing your products and services within your business may take a couple of attempts to get right. You can get close to ‘right’ by doing your market research, customer analysis, brand development and by using feedback and focus groups.
Like many things in business, your pricing strategy needs regular attention.
When was the last time you took a very close look at your prices? Do that today and, if you haven’t put your prices up in the last 12-months, plan to do that ASAP.
Question 6. Are You Keeping on Top of Your Numbers?
It amazes me the number of people who start a business who are loath to talk about money. I have had people say to me that i shouldn’t talk about my role in taking business from passion to profit bacasue business isn’t all about profit.
Hmmmm.
Yes it is.
Without making a profit you will not have the ‘elbow room’ within your business to do all the extra, add-on supportive and socially responsible things you want to do.
Remember what they say in the safety message when you fly:
Place the mask over your own mouth and nose before assisting others
You don’t wat to be in the position of just surviving in your business. You want to be thriving.
This is why knowing your numbers is essential.
It’s also why I always recommend using an accountant – from Day One.
I know there will be those who disagree with me, especially because, when you’re starting out money is always tight. But, who is better placed to know how to interact with HMRC and what your tax liabilities and exemptions are?
You? Or someone whose business is all about doing this for other businesses day in and day out?
Check out what I have written about this in more depth here: How to Know Your Numbers and Manage the Money in Your Business
Question 7. Are You Being ‘Realistic’ About Your Offer?
You love your business; love what you do, what you offer, your products and your services.
To you, your business will be / is the best in the market. You can blow your competition out of the water.
Or, at least, you should feel that. That confidence is a good thing.
(If you don’t, we need to talk)
But are you being over confident without the sales?
For clarity, you have to assess the performance of your products and services. That means you have to ‘retire’ those that are underperforming. This can sometimes be a wrench, because they are your favourite.
Which of your products or services are under-performing, and should be dropped now? (Be honest and realistic!)
It’s only by concentrating on those products and services that are really bringing in the money, and developing new things off the back of that, will you grow and be successful.
Always be asking yourself “which products or services should I concentrate on selling more of?”
Your Next Step?
This is in no way an exhaustive list of the questions you need to ask about your business. However, they are the most common questions I have to ask the business owners I mentor and coach.
It’s amazing the difference an independent expert with a series of searching questions can make to a business.
If you want to know the difference I can make to your business, book a call