In July, Patty Tomsky wrote a great post on the CBM website titled Three Questions to Determine “True” Business Health. I thought I would add to Patty’s comments and give you some additional qualitative and quantitative ideas on how to evaluate the current health of your business. To create the right atmosphere for success, you might want to set aside an hour or two and find a quiet place where you will not be interrupted.
- Do you have a business concept that is differentiated and compelling? This is a hugely important question to ask about your entire business and specific product and service lines. Businesses that have no clear points of differences are commodities that must compete on price. Generally, this is not a place you want to be.
- Do you understand your marketplace, not only in terms of competitors but also in regard to your target audience segments? Can you describe the persona of each of these audience segments in terms of the characteristics of specific individuals within the segment and what drives them to purchase? Can you quantify each of these segments to establish the size of the total prospect universe?
- Is your financial and funding model on track? Do you understand where your revenue is coming from as well as all the associated costs? Do you know your expected revenue amounts, your average sales price and the cost to acquire a new customer? Is the financial model based on actual data or speculation?
- Is your product and services roadmap sufficient to keep you ahead of the competition? Do you understand what your customers will be looking for in a year and five years? Have customers bought into the product/services roadmap?
- Can everyone on your team articulate your brand? Is your marketing and sales model effective, measurable and sustainable? Do you understand your key conversion ratios like leads-to-opportunities and opportunities-to-sales? Is your sales pipeline active and growing? Are your reps making quota?
- Are your operations and delivery processes optimized and documented? Can you deliver products and support in a manner that is both cost-efficient and customer-pleasing? Are your operational metrics improving? Do you have as much of your business automated as possible? Are you operating your business in a systemized manner that is scalable and predictable?
- Do you have the right team in place to grow your market share? Is your executive team strong and united in achieving your business goals? Are there any gaps in your personnel that leave you vulnerable to the competition? Is your employee training sufficient to meet the changing business environment? Is the staff turnover ratio favorable? Is there an effective retention program to motivate employees to stay?
The Gallup polling organization asks citizens one question that summarizes their general feelings about the state of the country: “In general, are you satisfied or dissatisfied with the way things are going in the United States at this time?” Paraphrase this question and ask yourself (and your key management team): “In general, are you satisfied with the direction our company is headed at this time?” If you get anything less than a resounding yes answer to this question, start working on the seven issues identified above and get back on the right track.