Running a private business is more like driving through the bush than cruising down the highway. If you want to find out what’s really going on in your business, and where you’re headed, you’ve got to ask some tough questions. Here are critical questions to help you understand where you are and where you can go.
1. Communicating Your Vision
- Why did you start your business?
- How do you see your business in three or five years? – revenues, products, customers
- What will your role be in three to five years?
2. Clear Short Term Goals
- What are your most important business goals?
- How do you focus your team?
- How does your team know what the most important thing to accomplish is today / this week / this month?
3. Specific Performance Measures
- How do you keep score in your business?
- How do you measure and monitor key performance indicators on a daily / weekly / monthly basis?
- How do you measure your gross margins and contribution margins by product / service?
4. Marketing Strategy
- Why do customers buy from you?
- Where do your most profitable customers come from?
- Which are your most profitable products or services?
- Who are your biggest competitors?
5. Cash Cows
- Where does your cash flow come from?
- Which product mix changes would improve your cash flow?
- Which customers are your most profitable?
6. Key Individuals
- How do you measure employee satisfaction?
- How do you help your key employees perform to their best?
- How do you maximize your business and your wealth by leveraging your people?
- Who will succeed you as owner / manager?
- What is your exist or succession strategy?
7. Focus: Quantity or Quality
- Are you in the quantity business or the quality business?
- How do you measure customer satisfaction?
- How much profit is lost on rework, customer complaints, slow service or warranty work?
- How are your people continually improving their knowledge, production and quality?
8. Proper Financing
- How do you manage cash flow?
- What type of financing do you use to help you manage your business?
- How is your relationship with your banker?
9. Owners Doing Management Instead of Technical Work
- Are you serving customers?
- Are you helping employees do their jobs?
- Are you doing little tasks “to save money”?
- How do you manage and plan for your business?
10. Documented Business Systems
- Is your business flying by the seat of the your pants?
- How do your people know what to do if you aren’t there?
- How do you train and teach your employees to act like managers?