The right
question asked at the right time can effect your business future more
than you can imagine. It has the power to completely and instantly shift
your mental activity, your entire thought pattern, and ultimately the
actions you take. Over the last fourteen years I've asked hundreds of
small, medium and very large business owners endless questions which
have helped them achieve far greater levels of success than they would
have had thinking the way they were -- only moments before.
While the
following may not be the only ten questions -- or even THE ten
questions, they are ten questions that you must answer if you want your
business to flourish. The right answers are critical to your company's
future.
How
many un- or underserved prospective clients are in your target
market?
The number of prospective
clients - prospects -- available to you relates to two key
considerations: the total revenue possible from this client base,
and what kinds of marketing tactics will be most cost-effective. If
yours is a 'mass market,' advertising will almost certainly be part
of the your marketing mix. By contrast, if your market is very small
(I once sold software to the top-50 international banks) you can
contact each and every prospect individually.
How large do you envision your
business?
Does your vision include being a
Fortune 500 company? If so, check question 1 above, and make sure
you've got a whopping market. On the other hand, many of my clients
would be completely satisfied generating $5MM with a staff of 50;
pocketing $1mm per year and selling the company for $10mm when they
are ready. How you answer this question governs the kind of markets
you can enter, whether you are vertical or horizontal in nature,
mass market or niched, as well as the kind of management structure
your organization requires.
What
important changes are occurring (or have recently occurred) in your
market and what is their impact on your business?
The answers to this question may
govern changes to your product, your product mix and your marketing
campaign. Big changes generally signal big opportunities; however if
you aren't prepared for them, they can also signal the demise of
your business. Dramatic increases in new housing created significant
opportunities for a client who sold estimating software and brought
a field-ready, cost-saving product to market just in time.
Who is your competition and why
are you clearly a better choice for your prospects?
It may shock you (on the other
hand, it may not) how many CEOs cannot provide a compelling answer
to this question. Recently, I was at a meeting for Microsoft
Business Solutions Partners, and spoke to a number of the VARs who
came to improve their marketing programs. When I asked about their
competitive advantage, three separate resellers answered telling me
how long they had been in business, and how well they understood
their customers. Yeah? Well, so what. If you don't want to get
blindsided by your competitors, you need to understand their
capabilities. And if you want to outflank them in turn, you'd better
have ammunition more powerful than your length of service.
How
important is "service" to your clients, and how do you plan to
deliver it?
Some markets require high
service, some do not. What about yours? If you are playing in a
market where customers expect to get their hands held, you need to
be geared up for it. A software company client of mine implemented a
large and effective sales push, only to have their Help Desk swamped
with new customer service requests. Ultimately we fixed this with a
set of new support policies, a knowledge base, an active user forum,
plus effective staff training -- but it almost sank the company.
Is your business model scalable?
In other words, could you grow your business by 50%, without your
expenses growing by the same ratio?
if not, you can never be any
more profitable -- in percentage terms - than you currently are. You
may sell more, and earn more in absolute terms, but for each dollar
you sell, you will make the same, and probably less, money. This
means a potential acquirer will not pay a financial premium for your
business, because adding money to your business won't make it more
profitable.
What
are they 3-5 critical factors for your business' success and how
would you rate your company in each factor?
Where do the profits in your
business come from? What are the areas where you beat the pants off
your competitors? Why do clients seek you out? These are the
critical areas of success -- and you'd better be damned good at
them. Rate yourself on each, and create an improvement program
wherever you are lower than an 8. I've done this exercise with many
of my business coaching clients, and it has probably created more
value than any other
What portion of your business
operations have documented, repeatable, scalable systems? Are there
systems which cover the critical success areas?
This is the solution to the
problem raised in question 6. It is also your ticket to a
well-earned vacation. Ask yourself, if you left for four weeks
without voice mail or e-mail, would your business be better than you
found it, about the same, or a smoldering ruin? You may think that
not all areas of a software company lend themselves to
systemization, but all the important ones do. Sales? Marketing?
Product development? Customer service? Consulting? All systemizable.
How
good are your finances?
Your financial picture and your
market share, analyzed in the context of a growing or shrinking
market determines the future of your company. If you've got lots of
surplus cash you can weather anything. You can create completely new
products if you have to. Next best thing is strong cash flow out of
which you can pay for development, buy a competitor, or expand
revenues with new technology. (One of my clients recently
reinvigorated their business by buying a non- competitive player
selling products to their legal clients.) But if your bank account
is poor and your cash-flow weak, you are in a tough place --
particularly if your market is shrinking. My Grand Strategy Model
would tell you to sell your company for whatever you can get, and
invest the proceeds in a healthier market sector.
Is your market growing or
shrinking, and what is your current market share?
This is the other key to the
Grand Strategy. If you dominate your market is there enough room to
grow? And if not, who can you steal business from? If your market is
expanding there may be years of growth left, but if it is stable or
shrinking, the forecast may not be so good. This is where cash
balances and cash flow come in. With them you can develop new
products and services to expand the size of purchase transactions or
increase the frequency of repurchase. If there is just no room for
increase, think about how you can tweak your product to redeploy it
in an adjacent market space. At a time when a client's customer's
just wasn't buying their old products, (and recently, whose
customer's were?) we shifted much of their resources into providing
interim services, and thereby saved the company until the new
products came out.
If you are
concerned about questions 5, 6, 7, and 8 above, I have developed a new,
comprehensive and first-of-its-kind program to help: The Turnkey Your
Business Home Study and Mentoring Program. (http://www.turnkeycoach.com)
This is a twelve month hands-on course, containing step-by-step how-to
manuals, audio CDs, CD-ROMs, monthly conference calls and personal
mentoring and is the only program of its kind in the world, designed to
help entrepreneurs and executives create detailed, documented systems
and processes to "turnkey" their businesses.
This is the one guaranteed way for you to create duplicable business
processes for those things that matter most, and then optimize those
same things getting the greatest return on your efforts and your time.
You can find out more about the Turnkey Your Business Home Study Program
by linking to http://www.turnkeycoach.com. And we've just added a
monthly payment program, as well.
About the author:
Paul Lemberg is the President of Quantum Growth Coaching: More Profits
and More Life for Entrepreneurs, Guaranteed. To get your copy of our
free report with detailed steps to grow your business at least 40%
faster, go to
www.fastergrowthnow.com
