As an entrepreneur, people expect you to know exactly how your business is doing. You might be excused when it comes to knowing all metrics by heart. But your employees, investors, and partners want you to be able to answer a few basics question about your company. In fact, there are five business health questions that you should be able to answer at any given time.
How do you work? While it seems like an obvious and simplistic question, in reality, knowing your business processes and understanding best practices needs a more complex answer than you might have first thought. When people ask you how your business works, they don’t expect a description of your activities but the highlights of your business intelligence data from an embedded BI solution or compiled with a professional BI consultant. It’s a question that touches on the internal weaknesses and opportunities for efficiency, productivity, and management improvements. Needless to say, you need to have an in-depth understanding of your internal structure.
How’s your cash flow? Admittedly, unless you’re talking to an investor, most people don’t need a fully detailed financial report to answer the question. However, you’re expected to have a good overview of your financial ups and downs, through an expert accountant. You should as well be in a position where you can forecast customer behavior and future sales. Your cash flow is a key catalyst for future investments, so make sure to keep it in the green.
Who is your customer? To be able to forecast future sales, you need to understand who your customer is. As surprising as it might sound, most entrepreneurs choose to use standard market demographics instead of detailed customer profiles. A description of your ideal customer needs to include not only their demographics, but also their likes/dislikes, their preferred media channels, and their motivations. Ultimately; the better you understand your customer, you more you can sell. In other words, it’s essential to work with a professional profiler to define your target audience and the appropriate messaging and offers.
Who are your employees? Your employees are, after all, your most precious assets. Getting to know and understand them is not just a matter of remembering their names when you see them in the corridor. You need to ensure that you can create a genuine engagement within your company. Team building games have never been so crucial to the survival of your team. You have to establish the motivations, inspirations, and desires of your employees as well as their skill sets and experiences. Ultimately, you can’t work effectively with people you don’t know, and employees can’t trust you if you don’t show an interest. It’s a win-win situation!
What is your strategy? According to Michael Porter, Professor at Harvard, most companies don’t have a strategy. As a result, they are not in a position to differentiate their company, as they’re too busy trying to deal with their competitors. Without a strategy, you don’t know what you want your business to achieve.
So, before we conclude, here’s a small question for you: Do you know what’s going on in your business?
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