Usually when I start to work with a new customer, it is for a specific, defined purpose, e.g. increase sales, resolve a particular staffing issue, lack of clarity about objectives etc and when it comes down to it I believe there are typically one or more fundamental issues that require addressing.
In fact, I have found over the years that there are “four essential questions” of which one or more are not being answered or sometimes even acknowledged, but if they were, then many business issues would become easier to fix or perhaps even prevented altogether.
The four essential questions to ask are:
1. Why would customers buy from you instead of the competition?
This question gets to the heart of your company’s value proposition and unless you are a very large national player, the answer should not be ‘because we are cheaper’.
Reason being that unless you are selling pure commodities, low price can work against you as people will think that either quality has been compromised somewhere or there is a catch.
Instead, better to focus on the value you provide such as enhanced customer service, performance guarantee or full refund if not satisfied etc and use this to leverage your competitive edge, i.e. identify those things that really make you unique.
2. What do you want your company culture to look like?
For those of you that read my articles regularly, you will already know the value I place on getting the company culture right for it governs just about everything in the business: leadership behaviours, how staff treat one another, fundamental marketing messages and the level of service
or support that can be expected by customers. It is also critical to the hiring of new staff since many companies ‘hire on skill and fire on fit’, far better to get the fit right from the start and this is greatly assisted to properly defining the desired company culture.
3. How much net profit do you need to make each year?
It is of course not all about the money, but if a business does not make a reasonable profit each year, then no matter how good the staff or the company’s products and services, it simply won’t survive which benefits no one (except the competition!).
Since a businesses’ fixed overheads tend to be relatively predictable from year to year, then by knowing the net profit you want to make, it is not hard to work backwards and determine the annual revenue that the business must bring in to support that level of operating income. Having clarity on this is very important since the business would need to do very different things depending upon whether it needed a profit of $10,000 or $100,000.
4. What is the business ultimately trying to achieve?
This is not a question that I find business owners typically ask themselves, but by doing so it can significantly influence each of the three questions above.
Obviously the further out you look, the hazier the ultimate destination becomes so you don’t necessarily need to get into great detail here, but being able to envisage an ideal outcome for the business can be motivating for the leadership team and inspiring for staff.
This is often captured through a ‘Vision Statement’ or similar method.
Ian Ash is the managing director for OrgMent Business Solutions.