So you have asked the questions of yourself and one hopes that you have been able to answer them all honestly. Why honestly, well if you fudge or lie all you are doing is pushing the way you can build your business bigger and better further away. In Part 2 we asked the questions, here we explore the answers.
What exactly do you do? This is the starting point.
May seem a bit odd, given say for an example, you are a plumber or an accountant. Seems obvious but is it. What is your core skill, almost every business has sub levels of expertise. Understanding these will position you better in your chosen market.
It’s very important to understand exactly what it is you do, not what you think you do but in real life exactly what it is. One of the many ways to answer this question is ask 4 or 5 other people what they think your business is all about.
The answers may surprise but are a very good insight into how others perceive the business you are in. None of the answers you get are wrong so don’t judge, take on board and then return to where you started and then write down a clear description of what you do. From this you can then start to build a marketing plan etc.
Who or what is your target market?
Fundamental to the success of the company is, knowing who they are actually going to market/sell their product or service too.
The purpose here is to make you focus, there is no point doing the shot gun approach, everyone everywhere, that never works, its time consuming and can be very expensive. Look back on the last year and the type of sales you made or customers who used you.
Look at their age, their market, where they live, what you sold/installed etc. In addition to this look at what you wanted to deliver and see if this actually matches up with any of your customers.
If you had a green widget that was brilliant but only 2 clients took them on board yet you sold 50 yellow buttons then its time to re-evaluate what it is. Hence question No 1. Once you have this information then you are better able to target your potential customers more clearly.
Who delivers the service you offer?
Can you control how and when your product or service is delivered to your clients and does your current system work. It may well be you, so you need a good delivery mechanism in place.
Taking an order is one thing, getting it to the customer in a satisfactory, on time, on budget, correct way is another. Damage can be dome to your company if you fail any of the above. This is where you need to set the expectation level of the customer correctly.
Explore your supply chain, whatever it is and then add some time to it. The time you add to it will be dependant on your experience, on your work load etc but its important here to always add a bit just dealing with the ‘in case’ factor. A clear delivery mechanism and expectation level will make things far easier for you to retain that customer.
Is your pricing structure correct?
In other words are you going to make money out of this venture, I’m not talking about making millions, for most of us its more about making a good living with perks.
Almost everyone I see has the wrong pricing structure, now before you go off on one and say I’m commission only, I’m told what I can sell it for, I’m restricted by contract, take a breath. The pricing structure includes many different elements it is not just the price of the product. If you are on commission only is it the best rate, is there room for negotiation, can you up sell while you are there, are there other people who offer a better rate.
If it’s a fixed price, what about volume, other suppliers etc. Can you add for delivery, training, maintenance, upgrades, review visits, telephone support, additional contracts, other products. Whatever it is you have options, if of course you are not making any money at it and you can’t add more then you have to question why are you doing this in the first place. The reasoning here, is this is your business, its not a job, its your future you are working towards so you need to get it right.
Do you need more clients?
Is your existing client base sufficient enough for you grow your business or do you think you may need to add some new clients along the way?
Might seem like a stupid question, almost everyone again I speak to when asked say I need more customers. However, look carefully at your current client base, the age, demographic, wealth, expansion and products they have purchased from you.
What is the lifetime value of that client. Work it out. What happens if you lose one or two, what’s the value to the business, how much in other words will you lose, then look at this and decide how many you would need to replace the ones you have lost. It is a relatively simple exercise and every business needs to look at this every quarter. If you are not doing or don’t know how too, ask for some advice.
What do you expect to end up with in the end?
Retirement may seem a long way off, you may of course decide that you don’t want to retire just keep working, or of course you may have the view that you could pass the business onto an heir or even sell it one day. If not and I suspect like many it will still be yours at the end, what exactly do you want it to look like?
It may seem a long way off but unless you have some milestones, then you may still be operating in 5 or 10 years time the same as you are now. Setting an objective or several then monitoring the progress, adapting and adjusting as you go will always ensure that whatever it is you want at the end, you should be able to get a fair proportion of it if not all.
As with any business it needs to flow, it needs to embrace the current market and it needs to be able to respond to changes and prepare for the future. If you don’t pay attention to it then your the business will just drift.
It’s not hard, nor that expensive to get advice, the hardest part for most businesses is actually deciding they want more. I read an article recently about half a dozen of the top business people, how they succeeded and what they suggested SME’s or Sole Traders etc should do.
One of the main points that they made was that they all sought advice, Richard Branson stated that even today he has a mentor. I’m not suggesting you get a mentor but I do strongly suggest that if you have any questions if want more out of your business then get some practical sound business advice..
Give me call, an informal chat doesn’t cost anything.