7 Questions Every Business Owner Must Know the Answer To
There are 7 basic questions that I ask before I come on board as a consultant. They must all be answered before I will even consider getting started on growing that business.
They are the essential pieces of knowledge every owner needs to have in order to be able to chart their course forward.
Take a moment and see how many of these questions you have answered today. Then sit down and take whatever time it takes to complete the list. Without the answers you are just flailing in the dark.
#1 – What is Your Unique Selling Proposition? Unique Marketing Proposition?
In what way are you different or unique? What sets you apart from your competition? Unique Skills, Unique Product? Better Warranty? Lower Price? More inclusive scope of work is not a benefit necessarily unless you have data to back up why.
Now distill that into a single sentence or phrase.
How can you express that sentence in just 3 words?
Those three words become the tag line of every marketing piece, business card, website and ad.
#2 – What is a customer worth to you?
Until you know how much money you are making from each customer you cannot make a budget for marketing and sales. Or really for any area of your company.
- What is the Lifetime Value of a Customer?
- What profit margin do you make on initial sale?
- What % of customers come back for other services?
- What Profit Margin do you make on subsequent sales?
- What is your Cost per Lead? Cost per Sale?
Once you know what a customer is worth, you can assign a percentage you can spend per lead. You can also decide what type of customer you want to target.
#3 – Who is going to be your target customer? Who is your ideal customer?
“When everyone is your prospect, no one is your customer”
Focus on a niches. What kind of customers do you enjoy working with? If you like working with them you will do a better job and they will be happier. What kind of customers make you the most profit? Use the answers to those questions to narrow your niche and then focus on that market. No more shotgun approach.
#4 – What are your Goals & Vision?
To move forward and upward you need to present a consistent vision of where you see the company going. Where do you see the company in 1,2 & 5 years?
- $ Volume
- # of sales (by niche)
- # of leads needed to make that number of sales
- % of Gross and Net Profits
- # of employees
- Markets served
Now that you know these things, get your key personnel informed of exactly where you want to go and what their part is in reaching those goals. Also help them to understand precisely what is in it for them as the company does reach those goals. If they catch your vision, they will drive the company forward. They will provide the muscle.
Your job is to provide the vision and leadership. Steer the ship, not provide the engine.
#5– Budget – What will you Commit to spending overall on Marketing & Sales?
Not some wishy-washy number that you may spend. How much will you commit to spend each month regardless of how sales are going that month?
- Marketing – seo, ppc, content marketing, email, direct mail, direct delivery, trade shows, print advertising, etc…
#6 – What planning have you done?
Marketing Plan – What are you going to do and when are you going to do it? What are the expected results, what are the costs, and what will the profits be?
Growth – Budgeting for growth. You have to plan for growth and set aside money from your profits to fund growth.
Business Plan – Who are you selling to, what is your market like, who are your competitors, what are your costs, what are your profits, now project that out 1,2, and 5 years.
Exit Strategy – How will you exit the company? Pass on to family, sell, IPO? Even if that is just stepping aside and letting someone else run the company, how are you going to accomplish that? How will you know when you have reached a point you can do that?
#7 – What is your Retail Pricing? And do you have consistent Sales Presentation Materials?
In many companies pricing is set by the owner or one key person in the company. There is no set standard pricing and if there is no set pricing, the owner must be involved in each sale. There is no growth if the owner needs to be involved in each sale.
Proposals don’t sell. Prospects buy the salesperson they interact with. Telephone and Face to Face contact sells. Hire inside and outside sales people on straight commission. Give them standard packages with a set pricing schedule (even if schedule changes monthly). This gives you as the business owner a chance to step back from day to day sales and start to do what you are supposed to do –
Be a leader for your company. Provide the vision. Be the Chief Morale Officer and Executive Cheerleader!
Now your company can grow.