7 Questions All Business Owners Should Ask

7 Questions All Business Owners Should Ask
And The Answers That Will Lead To More Growth
Is your business stuck? Are revenues flat? Are your sales stagnant?
You’re not alone. Almost every business faces a period when it’s difficult to get over the hump and really take the business to the next level. The solution might be to take a step back and really get to know your business.
For many entrepreneurs, the answers to get to the next level are right in front of them – inside the business.
The following seven questions are designed to help you understand how your company can grow in the future.

Question 1: Do you know where you are going?

Simply put: If you don’t know where you are going, how can you ever get there?

Ari Weinzweig, owner of Zingerman’s Delicatessen in Ann Arbor, Mich., credits his vision for helping to build his once-small delicatessen into a $40 million operation.

A vision is a three- to five-year snapshot of what your business will look like. Once you complete the vision, you can work backward to set goals, be held accountable and start turning the vision into reality.

“Some people who struggle with writing a vision claim that they cannot predict the future,” says Weinzeig. “Of course you can’t predict the future. But this is not about predicting the future. Why not write the future that you want? Even if you are in high-tech and you maybe don’t know what new things are going to happen, just write, ‘We are on the cutting edge of our industry, and we have seven new innovations we never thought possible.’ Done.”

If you feel like you lack the skill to create an effective vision, then you are not alone.  “Most people don’t know where they are going,” Weinzweig says. “They have to make a decision about the future, so they make a pro and con list. Then you balance both sides to have the same amount of pros and cons so you are more paralyzed than before you started. And then they go hire consultants. A vision is just a word picture of what you want.”

Question 2: Do You Have A Players On Your Team?

Business success always comes down to quality people. When reflecting on hiring practices that lead to those quality people, many business owners reach a similar conclusion: While skill sets can be taught, the characteristics that make a potential hire an ideal fit for each company culture often cannot.

Ryan Mortland, founder of MB Consulting, a managed IT service provider, abides by this thinking. “You can’t train attitude or work ethic,” says Mortland. “The hire must have that and must be able to work as a part of the team. That’s the character we need to see.”

John Marcus, who grew his company, Matthews Book Company, from a $750,000 business to a $180 million company before retiring, also focused on determining quality of character and cultural fit. “We had to hire good human beings,” says Marcus. “We didn’t hire for skill sets. Those can be learned. Character and quality can’t be learned.

“We worried less about what someone did before or where they ranked. We aimed to find out what the person liked to do and what culture they wanted to work in. We asked questions like, ‘What job would you write for yourself to do and why?’”

Question 3: Who is your ideal customer?

When it comes to sales, owners need to know their ideal customers and how they can make the business more profitable.

You can’t sell to everyone. There simply are not enough hours of the day.

“The biggest expense in business is missed opportunity,” says Allen Minster, a partner at More Prospects, a Frontline Advisors company.  “The bottom line: Business owners need to make certain they know the profile of their ideal customer to allocate resources to market to them. You can use this knowledge for new account acquisition. If you know who your ideal customer is, then you can look for new customers by identifying the thread going through them.”

Need help finding your most profitable customers? “I define profitability with three elements: margin, volume and emotional cost,” Minster says. “These three elements need to be in balance. That’s how you’ll figure out who your ideal customer is.”

Once you determine your ideal (and most profitable customers), you can utilize your marketing dollars and time and energy to attract more of them.

Question 4: What is your critical number?

Your critical number is the one thing that most clearly defines winning for your company. It provides a focal point for the company and its employees.

“Without a focal point, it’s so easy for a company and its employees to bounce from problem to problem and from metric to metric,” says Bill Collier, St. Louis-area coach for The Great Game of Business and author of “How to Succeed as a Small Business Owner … and Still Have a Life.” “Even a small company can waste tremendous amounts of time, energy, money and opportunity as it flails around a focus vacuum.”

Collier suggests gaining your team’s perspective by circulating a SWOT (strengths, weaknesses, opportunities, threats) questionnaire. “Get anonymous input from everyone,” he says. “Then get your management team together to review them. In that same meeting, put your financials side by side for the last few years, and get benchmarking reports from your industry. Discuss until you come up with a consensus on the single most important issue.  It may be something as obvious as profit or cash or something less expected like quality, morale or customer satisfaction.”

Collier believes the critical number gives the company its marching orders. “What better way to create clarity about what’s important?” he asks. “Plus, people help support what they help create. If the team helps establish the company’s critical number, it’s now not the owner’s number. It’s the team’s number. It’s a great way to get the entire team rallied around the organization’s most pressing issue or opportunity.”

Question 5: Do you have a winning culture?

Jonathan Jones, owner of Jonathan Jones Consulting, a firm focused on building leaders, teams and cultures, believes every business owner should know whether his or her employees are engaged at work. “The benefits of high company engagement are low turnover, positive morale, higher productivity and stronger bottom-line results,” says Jones.

“Employers are often disconnected to the aspect of engagement and consider employment alone enough reason for employees to engage and appreciate their work. Unfortunately, this isn’t the case, and according to the Gallup organization, only 33% of U.S. employees are actively engaged in their jobs. Research shows that, surprisingly, the healthiest of organizations can generally expect only 67% engagement but likely very small numbers of the toxic ‘actively disengaged’ staff. These are the workers who undermine their jobs and employers. Actively disengaged employees can sink employee morale and performance.

“In such cases, employers should try to determine what is behind active disengagement to prevent it from getting out of control. The problem may be that some employees are unhappy because their jobs aren’t suitable for their skills or they’re dealing with managers who have poor leadership skills. An improvement or increase in engagement results can result in staggering increases in growth and profitability.”

Jones believes employee engagement is one of the best indicators of corporate health. “Leaders that start or embark on improving a business should always have this key indicator in mind,” he says. “Recruiting and retaining employees that fit with the values, mission and vision of the organization is critical. Negative employees should be considered cancer and either coached in or moved out of the organization. The damage from the tolerance of negative employees can’t be underestimated.”

That said, the estimated 18% of U.S. employees who are actively disengaged, according to Jones, can be recognized by the following signs: creation of negative rumors, poor performance, absenteeism, turnover, theft, safety incidents, negative customer interactions, drops in quality, reduced productivity and the difficult-to-identify passive-aggressive behavior.

Jones suggests these basic tools and techniques that can help any company improve:
- Improve the employee’s perception of the importance of his or her job and how it affects the overall organization.
- Connect the job to the mission, vision, values and performance measurements.
- Clarify the expectations of every job.
- Provide regular feedback and dialogue with employees; most feedback should be positive.
- Take the time to increase the quality of working relationships with all employees.
- Focus on effective internal communications.
- Create opportunities for career development and advancement opportunities.

Question 6: Am I still involved in sales and marketing?

We’ve all read “The E Myth,” and we all understand the power of moving out of the day-to-day operations of the company, but when it comes to sales and marketing, the owner must still be engaged in the process, according to Greg Crabtree, author of the book “Simple Numbers, Straight Talk, Big Profits!”

Crabtree, a Huntsville, Ala.-based CPA, believes $1 million (revenue) to $5 million is the black hole in business. Yes, it is tough to get to, but it is even tougher to move past $5 million. Why? According to Crabtree, it comes down to the individual entrepreneurs.  One of the mistakes he sees owners make is getting out of the day-to-day details of the business, particularly marketing and sales. When it comes to marketing and sales, moving out of the business may be a mistake.

Crabtree’s firms recently conducted a study of 125 clients and found that 90% of the profitably growing companies had a sales-focused CEO. “We think the too-early exit of the CEO from the sales and marketing process creates stumbling blocks for businesses,” he says. “We find that business owners that hire an operations person and then stick with the sales and marketing function until they hit at least $5 million will do better. They don’t have to do the actual work, but they need to be focused on it (sales/marketing) and oversee the process.”

Question 7: Is the business still a fit for you, the owner?

Why did you become a business owner? Flexible hours? More money? Nicer home?  Ego?

Well, how is it all working?

Whether your business is growing rapidly or just crawling along, it must meet your needs. Only you can define those needs and determine whether the business is providing you with what you expected. If the business is meeting those needs, fantastic. If not, it’s time to create a company that will meet your needs or it’s time to move on to the next chapter in your life.