In any business, it's important that early on the management team asks, "What business are we in?" Whether you're manufacturing a product or providing a service, this important question reflects and affects every aspect of your company. You need to have a clear vision of the organization’s strengths and weakness, what drives your revenue and how you fit into the marketplace.
When I started Red Arrow Logistics in 2003, my vision was for a company that provides a higher level of customer service than I'd observed during my experience at top global logistics companies. I knew how I wanted to serve my clients and which sectors I wanted to pursue. Experience has taught me that customers are looking for more than just a transportation service; they are looking for great customer service.
As your company re-evaluates your core business, I encourage your management team to ask the following questions:
Is there a match between the customer's needs and the services we offer?
You may need to re-evaluate whether the product or service you provide is what your customers want. If you're sure it is, then you must determine if the positioning of the product or service is most meaningful to your customers. Successfully creating this appeal to your customers is key for increased revenue and higher customer satisfaction from your product or service.
Are your business processes repeatable?
You must have effective internal processes to deliver valued results with a consistent quality of service, leading to customer retention.
Are you able to deliver on your promises?
You want to ask, "Do you deliver?" and not, "Can you deliver?" Your dependability determines your reputation; the more dependable, the greater trust there will be between you and the customer, which diminishes risk and increases the chance for referrals.
Can you predict where the business and marketplace will be down the line?
Being able to predict where your company is headed relative to the market will give you a better handle on how to manage your current initiatives and guide you in the business planning process. This means being aware of what customers say about your business, what the competition is doing and how market conditions affect your cash flow and sustainability.
Are you able to consistently and systematically bring in revenue?
Profit provides your company with an infinite number of growth opportunities. However, keep in mind that every new business opportunity may not be the right fit for your company. As your company grows, it is critical you manage cash flow, credit and a diverse vendor base.
How can you analyze your financial model?
Managing cash flow, establishing a line of credit with your vendors and understanding which customer is the best match are essential to analyzing your financial model. When I consider each new business opportunity, I want to know, "Are they willing to work with a small business?" For example, are their payment terms in line with our company's terms and are they willing to allow us to grow with them? This self-evaluation of internal and external information will enable you to make optimal decisions about what resources you need and how to best align them to deliver for your customers. It is also critical to identify a bank that is willing to work with you and support your growing business.
If you evaluate these key aspects of your business early and periodically, you may establish a good foundation for determining where your company stands and highlight what needs to be improved to allow your company to move forward and achieve new heights.
OPEN Cardmember Liz Lasater is CEO of Red Arrow Logistics, a logistics and transportation company serving fast growing, complex and high-value supply chains.