20 Questions to Develop Your Business
A few months ago a friend who owns a retail furniture store asked me to help him develop his business. My first step was to understand his business, where he had gaps…and also find out what he didn’t know (but should). I came up with this list of 20 questions.
As important as the answers are to these, it’s as important that you CAN answer them. These aren’t all the questions that you could ask, but these were the ones that first lept to the top of the heap for me. There were key answers I was looking for under each of these to understand where his company was mis-prioritized, underutilized and ineffective. Also, with detailed information on some of these (by week or month) you can find interesting insights that lead you to understand the troubling trends.
For my friend’s business, a lot of these were not known…which was the first step…to determine strategy and capture data. For many other answer, there wasn’t a reason for the answer. Similar to many small business owners, decisions were made from the gut or habit, for years. This happens despite the fact that data and competition might lead them in a different direction.
Just asking the questions, digging in deep on some of these, and asking "why" after each answer will yield benefit in most businesses!
What are your short term and long term goals (what time period are these goals)?
How do you measure success?
What do you think are the top three things keeping you from achieving success?
What are your company’s exclusives? What do you have that your competitors can’t or wouldn’t copy?
What is the average order size and average order margin? How has this trended?
How many customers buy each month? What is the mix of new vs. previous customers?
What is a customer worth over a lifetime? Have you calculated the NPV profitability of customers?
What is the cost per acquiring a customer? i.e. Total marketing costs / new customers.
How do you communicate to existing customers after the purchase?
What is your monthly marketing spend, and what is the mix between the different vehicles? What is this marketing expense trend vs. revenue over the past 3 years?
How do you measure your marketing? What tests have you run? Results?
How do your competitors market differently than you?
What are the top 3 things customers are looking for when they come to the store / web site? And how do you know this?
Where are most customers coming from or going to when they visit your store / site? And how do you know this?
If I were a customer, what would my 20 second word of mouth ‘sound byte’ be if I were to tell a friend about you? What would I say?
Who is your primary competition and how do you differentiate your customer service, shopping experience, and products from competition?
What are the roles/responsibilities of the top management in the company? How are these made clear to each of them?
What are your key performance indicators and how often do you review them as management, and with employees?
How are employees compensated? Are there performance-based incentives?
What are the career paths? Are they clearly communicated to employees?