Time and time again, I find myself talking to business owners, both start-ups and those that have been operating for some time, who are unable to clearly and confidently answer some simple questions you would assume they should know.
This is an indicator that they don’t have the level of clarity, focus and concentration needed for sustained and profitable success.
It also means they can’t share and set the right focus for their teams or articulate it to their customers and gain the power of leveraging a strong message and common focus.
To avoid falling into the same trap, here are my top five things every business owner should know:
1. What do you want to achieve?
If you don’t know where you’re going, you’ll probably end up somewhere else. Having a clearly defined vision and goals for your business is the antidote to that.
What do you want to achieve and when? What do you want the business to look like in five or 10 years from now? How clearly and confidently can you articulate that to your staff, customers, supporters and bank manager?
What do you want your brand to stand for, the market to know you for, and your customers to think about you?
You’re the business owner, so what do you need personally from the business? What was your reason for going into business in the first place and how will you achieve that?
What financial return do you need from the business and how will you get that? When will you exit and how?
With a clear big picture, you need to work out how you’re going to eat your elephant. The answer is one bite at a time.
So get specific by breaking it down into smaller short-term goals that are measureable and manageable, so you can keep track of how you’re going and know whether you’re going to achieve your goals.
This will help you stay motivated and allow you to make adjustments or ramp things up as you need to.
2. What do your customers really think of you?
Do you really know your customers or are you basing your knowledge on an unconfirmed assumption? The biggest assumption being that because they bought from you before, they will buy from you again.
Many business owners fall into the trap of assuming knowledge rather than simply asking the question.
So the next time you’re in front of your customer, take the opportunity to check and confirm how they’re going, what they think and know about you and if there are any issues or gaps in their knowledge that you can address.
Send them a survey if face-to-face discussion is difficult or uncomfortable, or ask them the ultimate question, which, according to Fred Reichheld, is the only question that matters: Would they recommend you to others? If the answer is no, find out why and address it.
3. Who is your real competition?
It’s often the direct competitors that business owners compare themselves to and monitor, while failing to consider the indirect competitors or dollar substitution options that your customers might choose over you.
For example, if you’re a gym operator your direct competitors are obviously other gyms, fitness centres and the local YMCA. But if you think about the objective of your customers, you’ll find you have a multitude of indirect competitors you’re contending with at the same time.