Five Key Questions Every Business Owner  Should Ask

We all seek to find the right answers to our problems. The first thing we need to understand is that the right answer can come only if we ask the right questions. This isn’t as simple as it sounds. There are some fundamental questions that are vital to the survival of any business; five of these questions are presented below (not in any particular order).

1. Cash Is King – How Long Can It Last?

If starting tomorrow, my revenues from existing customers drop to zero, how long will I last at the current expense rate? Surprisingly enough, many business owners I have worked with do not have a clear picture of this – indicating they are flying blind to an extent. Poor cash flow planning is one reason business owners run to their financers / loan officers at the last moment. That is precisely the wrong time to be seeking additional funds! Preparing and reviewing your Cashflow statement frequently is a good way to be on top of your business.

2. How Long Does It Take for New Customers To Come On Board?

One of the hardest things especially for small business owners to do is get customers. This is because they always tend to operate with lean budgets, and tend to have fewer resources for sales efforts. As such, more reliance is placed upon word of mouth, and referrals. Both are excellent techniques, but take time. Not having a good sense of the gestation period for generating business from new customers results in over dependence on few customers, which can be extremely risky. Developing a segmented plan for new customer additions is a sure way to strengthen growth.

3. What Makes Customers Come to Us (or Turn Away From Us)?

Despite the well-known fact – no customers = no sales; few businesses really have a good understanding of why customers come to them, or otherwise. Many of the business owners I speak with say “If they customer did not complain, it means we must be doing things right, and they will be back!” While this paradigm can provide self-accolades, it spreads the seeds for potential trouble down the road. Ask yourself – by the time the customer overtly complains, what has already happened up to that point? They experienced some level of dissatisfaction. This is usually due to the product / service failing to perform as the customer wanted. By default then, waiting until the customer complains is too late in the game – they are already on their way out. You as the business owner better discover “Satisfiers” and Dis-Satisfiers” before your customers do. Track your key performance indicators with no room for lethargy in on time performance, quality or decline in repeat purchase.

4. What Are the Key Constraints Present In My Business?

Why such a question? Think about it – business is subject to many forces, therefore full of changes. We may experience expansion, contraction or obsolescence, just to name a few eventualities that can occur. The pace at which change can take place now adays is very fast. Thus business conditions can go through a 20 to 30% change in operating parameters in very short time. Lack of adaptability can kill businesses in a hurry – so it is necessary to be aware of the constraints that exist in the business. One example of such constraint is the fixed payment obligation that may be tied to a certain loan. Awareness of constraints also makes it easy to have contingency plans for different scenarios. One may wonder how frequently should one look at such plans? Depending on the industry one is in, weekly to once a quarter may suffice. The constraints should be clearly identified – such as “Employees”, “Technical Skills”, “Throughput Capacity”, etc.

5. How Strong Is My Skill Set / Competence Inventory?

Like it or not, the information age has been changing the paradigm of how businesses work. The level and types of skills needed to do business in today’s world is quite different from that just a few decades ago. A lack of understanding about the important skill sets needed for the future is a sure way to start to become obsolete. For example – business owners who do not care to upgrade their skills in the use of technology are susceptible to customer churn. Digital skills enhances staff productivity and time efficiency. Ask yourself, are you aware of the trends in your industry, what your competitors are offering and how your customers’ needs and expectations are changing? If not, take the time to do so. The good news for a business owner is that you do not need to personally possess each important skill. However, it is important that your organization consists of necessary skills and competencies that your industry and customers are coming to expect.
In this fast paced business environment, it’s important for you to take time off routing activities( busyness) and allocate time for planning ( business). Reflecting and questioning status quo is a sure way to challenge yourself to improve your business and change your life.

VG Somasekhar
The Alternative Board -TAB Business Owner Chennai.