Every day, millions of business owners wake up and try to move their companies forward. It’s unfortunate that the overwhelming majority of these owners have almost no idea where they're going or how they plan on getting there. They're too busy putting out fires, answering emails, and dealing with angry customers and lost orders to see anything beyond three feet in front of them.
One of the most important sessions I run with my clients is a program called "How Well Do You Know Your Business?” I ask a series of questions designed to highlight the cracks in their company’s foundation. Once we finish with the Q&A session, we figure out how best to repair the exposed cracks.
How can you assess your business's foundation? Set aside 20 to 30 minutes to answer these 10 questions from my exercise. When you’re done, examine the newly found cracks and then decide how you will fix them.
1. What type of business owner are you? Small-business owners make work-life balance a priority, while growth is the primary focus for entrepreneurs. If neither definition sounds like you, then maybe you’re a “passionate small-business owner”—someone who loves what she does and wants to grow her company but not at the expense of having at least some sort of work-life balance.
2. Do you know why your customers buy from you? Are you the most reliable plumber in town, or do you have the lowest prices? Do you provide exceptional customer service, or is your location convenient for most of your customers? In order to keep customers coming back, you have to know why they came in the first place—and the only way you'll find out is by asking them. (Don't worry, asking won't make customers second-guess themselves as to why they bought from you in the first place.)
3. Who are your key competitors? Please don’t say your product or service is so unique that you really don’t have any competition. Every business has competition. Right now, someone is on the phone with your largest client trying to woo them away from you.
4. Are your employees motivated by their work? A motivated and talented employee can help your company achieve its goals; a negative, whining employee can suck the life out of your company and cause good employees to go elsewhere. Knowing your employees should be a top priority.
5. What are the biggest obstacles on your path to success? If you only see problems that are three feet in front of you, you'll never have time to properly respond to the bigger obstacles ahead. For example, your company just landed a big account. This means hiring new people and adding expenses to your business. If your accounts receivable are running 60 to 90 days past due, the added business will put a tremendous strain on cash flow. You won’t see it immediately, but a tidal wave of pain is coming unless you do something about your A/R situation today.
6. Are you protected from hackers? If your business collects sensitive client data, stores credit card numbers or other confidential information, you need to protect it from hackers. Have you trained your employees on securing their smartphones and laptops? One successful breach can put a small company out of business.
7. Do you have a disaster plan? The time to answer this question is not after the storm hits; it’s six months before, when you can think clearly. If your business hasn’t been the victim of a disaster, count your lucky stars and put together a disaster plan.
8. How much money could you raise in 30 days without selling assets? Great opportunities don’t come along every day, but disaster can strike in an instant. If you needed to raise money for either situation, how much money can you collect and from what sources?
9. Are you using social media as a “means to an end?” Social media has fundamentally changed the way the world communicates. Business owners can no longer afford to ignore Twitter, Facebook, LinkedIn, Instagram and other social media platforms. These tools can help you find new customers, conduct market research and build brand awareness. You also need to be aware of the downside risks. Don’t let your employees place your company at risk by bad-mouthing customers or competitors online. Many companies have been sued because of offensive tweets or inappropriate photos on Facebook. Don’t be naive.
10. How often do you look at your business from 20,000 feet? If you love what you do and can’t imagine doing anything else, then take the time to see the big picture. Set up a monthly meeting to better understand your business. Understanding the entire landscape is the only way to keep your business competitive and relevant.
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