Okay, so far in this blog I’ve given you a lot of background about entrepreneurship and hopefully I’ve pointed out how important I believe entrepreneurial training to be. So now I’m going to focus on giving you information and advice which you should find really useful if you are thinking about starting a new business, or if you already have a business (you just need to adapt the following to your own personal circumstances).
This is absolutely gold-mine stuff, and is just a snapshot of exactly the type of information you will get when you sign up to Entrepreneur Secrets (don’t worry, I’m not giving anything away – all the really top-secret stuff is only available to subscribers). So, when looking at a business, either a functioning one or a would-be one, we need to look at it in the round – we need to do an audit.
But this should be a different kind of stock-take! This needs to be an ‘intangible audit’ which allows you to see the big picture – the true picture. Only if you study the past, can you foretell the future! It will help you to understand why customers want, or do not want, your products or services, the motives underlying their purchases, what is affecting their behaviour, and why and how customers buy, and who influences their buying decisions.
Have you ever sat down and described your company and the industry it operates in, using both positive and negative perceptions and facts? What is the nature of your business? Where is it located? The size, market share, turnover, etc.? And what is the overall business opportunity or problem?
What is your product or service? What is it called? What does it do? How does it work? What percentage is it of the market and what is your market share? What competitors does it have? What are the Unique Selling Points? What are the distinguishing features of each product? Can you translate the features into benefits?
How about your customers? At all times, in your business cycle, you have three main target market groups: your present or existing customers – active and inactive; your past customers; and your prospective or new customers. They are the most important ingredients in your business strategy. As Anita Roddick of The Body Shop said: “Don’t sell to everybody, sell to somebody!”
What was/is the market opportunity that brought/will bring your product into existence? Has the original opportunity changed? If so, why? What external, unforeseen circumstances enhanced or retarded your marketing, campaigns, strategy and plans? What are the number of years and money spent on previous marketing strategies? Have you ever done any research on the success or failure of your current strategy? Is the research valid?
Does your creative approach to your business fit with your products, target market and corporate identity? What are your short- and long-term marketing objectives, and with what yardstick will you measure success or failure? What do you want your present / past / potential customer to do? What is your ‘offer’ strategy?
What other marketing / advertising is planned? What are your primary and secondary merchandising objectives? What are your distribution objectives? What is the distribution pattern and how is it done and by whom and what percentage of the costs or price is it? Is it effective and cost-effective?
Loyal employees create loyal customers. Employee loyalty increases business profitability, competitiveness and market share. What, how, when, where, why and to whom do your communicate? And how does it fit in with your overall plans?
Which industries, companies or products can be tied in with your products? Looking at your products and services now and the objectives to be met, do you know enough about the market, the target market and the competition? What existing research is available? What further research should be undertaken to help you plan your business strategy?
Who, what, why, when, where, how? It’s not easy doing an intangible audit! If you sell tables, you count how many you’ve made, how many you’ve sold, and how many are left in the store room. Although not always easy, it’s still pretty straightforward. But when doing an audit of concepts like ‘why do I have the customers I have and why don’t I have more’, things get a bit more tricky.
You could literally spend days if not weeks undertaking the kind of audit outlined above. Instead, what we need to do is build a simple profile of your business or business idea. What you need to do first is print off this article, then find one of those days of yore writing implements called a ‘pen’. Then circle the words below that apply to you. This is not an exact science, so circle the ones that apply the most to how you feel – but you must be brutal! You need to be as honest as you possibly can to build up an accurate picture. After all, you’ll be the only one looking at this anyway:
Your sector
Profile of market or sector: size, dynamics, trends
Circle the words in bold that apply to you:
Is your market big, medium-sized or small?
Is it a fast-changing or slow-changing market?
Is it a growing or static market?
Your organisation’s status and reputation
Circle the words in bold that apply to you:
Would you say your customers were loyal or opportunist?
Would you say your suppliers were loyal or opportunist?
Would you say your customers and suppliers saw you as a big or a small company?
Competitors’ status and reputation; role models
Circle the words in bold that apply to you:
Would you say your competitor’s customers were loyal or opportunist?
Would you say your competitor’s suppliers were loyal or opportunist?
Would you say your competitors were big or small companies?
Profile of customers / stakeholders in market or sector
Circle the words in bold that apply to you:
Would you say that, in the main, your customers were old, young, middle-aged, or a balance of all three?
Are they mostly male, female, or a balance?
Would you say they rich, poor, or reasonably well-off? (Use your own judgement here).
Characteristics – seasonal / regional
Circle the words in bold that apply to you:
Are your customers mostly local, regional, or national?
Do you sell more in the spring, summer, autumn or winter, or is it steady year-round?
Your organisation
Description of your business – what does it actually do?
Circle the words in bold that apply to you:
Do you provide a product or a service?
If a product, do you manufacture, wholesale, or retail, or if a service, do you provide directly or sub-contract?
Background and history
Circle the words in bold that apply to you:
Is your business under five years old, between five and 10 years old, over 10 years old?
Are you the founder of the business, or the successor in it?
Mission and values
Circle the words in bold that apply to you:
I have or I have not got a mission statement.
I have or I have not got the values of my business written down.
Objectives and goals
Circle the words in bold that apply to you:
I have or I have not got business objectives which are written down.
I have or I have not got marketing and sales objectives which are written down.
I have or I have not got product / service-specific objectives.
Unique selling points
Circle the words in bold that apply to you:
Are you acutely aware, quite aware, or vaguely aware of your product’s or service’s unique selling point(s)?
Do you see the unique selling point(s) of your product or service vital, useful, or relatively unimportant to your business? (And remember, be honest!).
Organisational / management structure
Circle the words in bold that apply to you:
I have or I have not got a management structure in place.
Are there formal or informal lines of reporting in place between different employees?
Where does your business want to be in 3/5 years?
Circle the words in bold that apply to you:
Do you want to grow significantly, grow gradually, or not grow at all over the next three to five years?
Do you want to be smaller than your main competitor, the same size as your main competitor, or bigger than your main competitor in five year’s time?
Are You Sitting Comfortably?
Okay, so now we have some simple background about your business. We’re starting to see what makes your business tick, and we will tell ourselves a little story about your business. Taking each of the words you circled in order, fill in the blanks in the following passage:
My business operates in a market that is ______, __________, and _______. My customers are __________, my suppliers are ___________, and they see me as a _______ company.
The age of my customers is mostly ___________, and their gender is mostly __________, and, as for their pockets, they are mostly __________. They are usually from __________ areas, and they mostly come out (in the) __________.
My business provides a ________ which I ____________________. It is a business which is __________ years old, and I am the _____________ of it.
________________ got a mission statement written down, and _______________ got the values of my business written down. _________________ got business objectives which are written down, _________________ got marketing and sales objectives which are written down, and _________________ got product / service-specific objectives.
I am __________________ of my product’s or service’s unique selling point(s), which I regard as ________________ to my business.
__________________ got a management structure in place, and there are _____________ lines of reporting in place between different employees. I want the business to ___________________ over the next three to five years, and, compared to my main competitor, I want to be ____________________.
And there you have it! A snapshot of your business, your customers, your reputation, and your aspirations. It all looks quite different written down doesn’t it? Don’t underestimate how useful this exercise has been: many small businesses, or even big ones for that matter, never get this far in taking a look at themselves!
