Are these 10 statements true for your business or do you need to make some adjustments?
1. We know what we sell. We are clear about our products, services, and what we offer. We can explain what we do in 30 seconds or less.
2. We have a plan for our business, and we run our business according to that plan. We have strategically mapped out what we need to do for the year, and everyone is clear about the next steps to take.
3. Our company has positive cash flow. (You’d be surprised at how many businesses do not know whether or not they have positive cash flow.) There are businesses that are generating good sales and profits, but they are losing money every month. In order to be successful in business, a business needs positive cash flow. That means generating more revenue than the sum of the total costs at the end of every month.
Businesses just starting need a break-even analysis. The break-even point is that moment where your total revenue exceeds your total costs. A break-even analysis maps out if and when the business will make money by showing where the break-even point is and at what point in your sales you start to make money.
We have an accountant or we have met with someone who set up our financial records properly.
4. We know who our target audience is. A recent survey asked business owners who they are selling to, and over 50% answered “everyone.” “Everyone” is not a target audience. The purpose behind having a targeted audience is to clarify your marketing and advertising budget and to ensure that your product best suits the needs of that demographic.
5. Our marketing plan clearly focuses on our target audience. We know who our audience is, and we make sure that we provide them with information about our goods and services where our customers live, shop, and work.
6. We routinely spend time focusing on activities and tasks that are designed to help us run and grow the business.
Note: Many people who run a business get so involved in the details of the specific business that they neglect marketing, advertising, creating new ideas, and other necessities for long-term growth.
7. We have the right people doing the right jobs. Finding the right people for a business is challenging. In the developmental phases, it may be more important just to have the right people in the organization than to have them assigned to specific functions. Most business owners quickly learn that having the right people in the right jobs is crucial for business growth. Match a person’s ability and personality to the requirements of his or her specific job for the greatest success.
8. We plan for long-term growth and success. We have processes and plans in place to handle surges of success and busy seasons.
Note: Most people are familiar with Groupon and Living Social deals. When a company is trying to get publicity and new clients, these are both excellent ways of creating market buzz and introducing your product or service to new clientele. However, some companies underestimate the response. As a result, potential new clients are unable to book a product or service for 3 to 6 months, if at all. Complaints surge about companies that had previously enjoyed a healthy reputation. This is worse than having no advertising at all. A bad experience with a company spreads virally, and instead of being indifferent about the company or service, customers get downright angry. They feel as though they have been ripped off. The company may have had the best of intentions, but by not planning for potential success, they set themselves back.
9. We work with all customers so that they are not just satisfied — they are delighted. We make our process easy and pleasant when making a purchase.
Some businesses make it very difficult to redeem their gift certificates. Some mandate a very short window of opportunity to redeem coupons, or they fail to honor the full value as promised. The end result is unhappy recipients and lost opportunity.
10. We are daily doing what it takes to grow the business. Being consistent with product offerings, great customer service, and the day-to-day activities is what creates a profitable company. Some small business owners get discouraged when they have a bad day, and they allow that one bad day to impact the next few days. Entrepreneurs know that it takes focus, dedication, and consistency to be successful.
Mary C. Kelly, PhD is CEO of Productive Leaders.