Successful business owners often claim that the first step to growing a business is asking yourself a series of questions that will help you determine what to focus on in order to increase revenue. These questions all stem from the same concept: Finding out what your business does best, what you should be doing better, and which values are most integral to your success thus far. At first, coming up with answers doesn’t seem too difficult. But then you realize that your answers are just as general and vague as the questions themselves.
This suggests that to get a truly clear idea of which direction to take your small business, the information you seek should be more specific. And it shouldn’t just be about you or your team. You must address the needs of your customers as well, since no initiative is worth pursuing if you aren’t 100% sure your current customers will approve.
As this process comes to a close, you will be absolutely certain as to which areas of your business deserve the most attention, which new things should be introduced, and what you should measure in order to determine whether or not something is working.
What Is The State Of My Core Product Or Service?
Chances, your business’s cash flow comes from a single or small number of products or services. This is what makes you the most money and what your loyal customers associate you with. But in addition to identifying your best-selling product or service, you want to examine what kind of challenges are in its future. For example, it might be time to improve or even create a new core business offering if it facing an increasing amount of competition or might be compromised by external factors, like a new regulation or advancement in technology.
The products or services that bring in the most money might not necessarily be bringing you the most profit. Anything that has a high profit margin cannot be ignored as you grow because even though you might not be selling as much of it, your core profit center could very well be carrying your business.
Have I Spoken To My Customers?
Here’s a story you’ve probably heard before: Someone decides to start a business after discovering an untapped, niche market. Since no other company like this exists, the business owner expects that this untapped market will immediately eat the new products up. But this doesn’t happen. The business owner is dumbfounded because his assumptions about his target demographic were so incorrect. It isn’t until he surveys his customers that he realizes his target demographic was actually looking for something slightly different to fit their lifestyles, which are slightly different than the entrepreneur imagined.
What’s the lesson here? Before you get to work on a new product or service, talk to your current customers to make sure the void you intend to fill definitely exists. You could write a questionnaire and send it to everyone on your email list, or reach out to your followers on social media. Even if your assumption is most likely correct, you will always learn something by monitoring your customers’ changing lifestyles.
Will My Core Values Be Compromised?
Some small business owners believe they stand out from the competition simply because they do their jobs better than anyone else in the world. This may very well be true but it isn’t always enough. Your target demographic might want more, likely because your industry is naturally prone to certain problems or challenges that make potential customers think twice about buying from you or your competitors. This is why so many successful entrepreneurs constantly talk about the importance of core values. In addition to top quality, successful companies are committed to values and ideals that their customers love because it’s difficult to find somewhere else. For example, a company that makes children’s toys might owe a lot of its success to the fact that its products are made locally, as opposed from overseas. Another company might offer 24/7 customer service while their much larger competitors take an average of twenty minutes just to pick up the phone.
A common dilemma is having to compromise these values in exchange for higher quality or productivity. Alternative business financing companies, however, can provide working capital loans that allow you to maintain your identity as you invest in increasing revenue. Instead of making as many sales as quickly as possible to pay your bills, you could use a working capital loan to build a bigger team without having to worry about reaching a certain number of sales at the end of the month and therefore continue to offer your trademark customer service. Rather than sourcing cheaper materials overseas to meet demand, you could continue to use only local materials with the right small business loan.
Evidence = Preparation
Regardless of how you choose to fund your business, this is the kind of information that will prove to be incredibly useful as you begin to make drastic changes to your operations and day-to-day tasks as a business owner. You simply cannot assume that a single aspect of your strategy will work until you have evidence to support it. Small business owners who rely heavily on evidence are usually the most prepared for the future, making them perfect candidates for substantial small business loans, even when their industry is poised for evolution.