Want a Successful Business? THE Seven Questions You Need to Answer
Do You Want a Successful Business?
I heard a very successful entrepreneur say that the difference between a successful business person with a profitable business and someone less successful is that the successful person is prepared.
One of the qualities often attributed to successful entrepreneurs is that they are risk takers. However, I prefer to think about this in a slightly different way. I believe that successful entrepreneurs have done their homework, are continually researching their industry, their market, their competition and their own offer – so that when an opportunity arises they can grab it with both hands. To others this may look like risk; to them it’s a calculated business move. They are prepared.
Once we start a business and offer out our product or service to our identified market we should constantly question our assumptions about our offer and our market. So, I’ve put together seven questions (OK, OK it’s more than 7 – but I didn’t want to scare you!) that will help you to do that; questions that could lessen risk and increase successful business activity (profit).
The Seven Questions You Need to Answer
1. What am I selling?
- Can you describe – in two very short sentences – what your product or service does to benefit your customer? It’s all about outcomes for the customer not inputs from the business owner.
- Why do people buy your product or service at all?
2. Who am I selling it to?
- Who is your typical customer?
- Why do they buy from you and not someone else?
- Does your typical customer need anything else?
- Are there other groups that could benefit from your product or service, if so, who are they?
3. Who is your competition?
- Where are they?
- What do they do?
- Is your product or service unique in some way from theirs?
- Is your product or service as good, or better that your closest competitor?
4. What’s happening in your market?
- What are the new / major / minor threats to your product or service in your market?
- Are there any political, economic, technological, social, legal or environmental developments or changes that could have an impact on your product or service?
5. Are you charging the right price?
- Are you supplying the right product or service at the right price to the right customer group?
- What are the purchasing patterns of the average customer for your product or service in your market?
- Which of your products or services make the most profit?
- Which of your products or services could you increase the prices on over time?
- Which of your products or services should you raise the price on now?
6. Are you keeping on top of your numbers?
- Do you have an annual cashflow forecast?
- Have you set an annual turnover target?
- Have you identified a workable profit margin?
- What is your average customer value?
- Do you know your business costs?
- Are you providing your products or services in the most cost effective way?
- How many customers do you need to meet your annual turnover target?
7. Are you being ‘realistic’ about your offer?
- Which of your products or services are under-performing, and should be dropped now? (Be honest and realistic!)
- Which products or services should you concentrate on selling more of?