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by: Paul Lemberg
As a business coach I specialize in asking questions.
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.
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
Best regards,
Paul Lemberg
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
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