As a life and business coach I have the privilege of working with groups of entrepreneurs as well as individuals to help them reach their business goals and potential. I’m about to launch year two of a business development program created by a local business incubator I’ve been hired by. It’s my auspicious task to select the five – up and coming, most promising entrepreneurs (out of about 20 applicants) who will be offered the opportunity to participate in this business growth and life changing program.
As I sat on my living room floor surrounded by a sea of compelling applications and a bottomless cup of tea, I wondered how I’d wrap my arms around this daunting yet honored task. I knew each business would clearly benefit from the opportunity presented but I could only chose five participants. I wanted to help them all!
I realized that I had to come up with some sort of universal criteria, a filter if you will, to look at each business through. Then I could rate each business on its merits and make my decisions. Sounds smart, but what should the criteria be?
After much pondering, consulting my favorite business books and yakking with one of my business mentors, the light bulb went off – any criteria I would use to select participants for this program would also be valuable to entrepreneurs for the purpose of evaluating their start-up or ongoing business’ success potential.
So, here’s my top 10 list of how best to assess your own business:
1. Why are you passionate about this business? Connect with your passion for your business, your product, or both. It takes tons of energy to start or build a business. Articulating why you want to do it, and reminding yourself frequently will help you weather the natural ups and downs. Is connecting with people what your passionate about? Creating beauty? Empowering children? Passion’s the fuel that keeps the entrepreneurial engine burning. Ignite it.
2. If your business didn’t exist, how would the world be worse off? I love this question; it’s from Guy Kawasaki, author of The Art Of The Start. Although the question is related to passion, it really points to meaning. In my experience, a sense of meaning is the most powerful motivator out there – certainly above money, power and fame. Do you want to make the world a better place? Create sustainability for the next generation? Assure the continuance of culture? Once you declare the meaning or purpose of your business, you become unstoppable, magnetic and highly motivated to succeed.
3. What’s the need in the marketplace your product or service fills? Who is your customer and what problem is your product designed to solve? If you can’t answer this question, you probably don’t have a viable business. Obviously, commerce is based on the demand of the consumer. It’s all very well and good to have the best quality widget this side of the Mississippi, but if it doesn’t fill a need, or, better yet, create one, you’re dead in the water. Find a niche and own it. Assess this honestly. Who absolutely needs your product and why?
4. What’s remarkable about your product or service? Assuming you’ve articulated a consumer need in the marketplace, next you have to assess if your product or service is unique and marketable. What’s special about your all-natural-animal-friendly soap compared to the thousand other all-natural-animal-friendly soaps out there? You need to determine how you will capture the segment of the market you’ll target and if your product has a wide enough appeal to be profitable in a competitive and changing marketplace.
5. What’s your business model? A business model is simply, the sales mechanism you have in place to assure that money continues to flow to you (greater than your expenses, of course). For example, will your dynamic, fitness blog generate revenue, or do you have to set up an online membership service to build a base of qualified buyers? Will you sell your candles exclusively retail, or are you wholesaling through distributors as well? Make sure you can project a solid return on your investment. Bottom line, can you sell enough what-cha-ma-call-its to be profitable?
6. Have you been able to demonstrate revenue traction with your product? In other words, can your product sell to more than just your mother? Make sure to project sales revenue for at least the first three years of operation. If you’ve got an existing business, know your annual growth and how that measures to your industry standards.
7. Do you have the resources needed: time, skills, support, and funding to make it happen? This is critical. I’ve seen more small business owners throw in the towel due to stress, personal frustration and overwhelm. It’s your primary job as your business’s caretaker to make sure your personal habits and foundations are strong. Cash flow challenges are inherent in most business operations; don’t make it a business killer by failing to devise an adequate funding plan before you start. It takes money to make money. Get real about this and raise capital.
8. Where can you go when the need for additional capital arises? What if you can’t get it? Building on the previous point, sometimes, even your best efforts don’t materialize or you need to access additional funding to keep up with growth. Know what your options are before you hit crunch time. Make sure to have a network in place to access information, contacts, or that someone with deep enough pockets that believes in your dream. Be prepared as well to have a fall back plan in place. Have your business plan ready to present if you need to. It’s not fun to be burning the midnight oil cranking out a business plan so you can apply for a bail out line of credit to make it through payroll.
9. What are the top three obstacles to reaching your goals and how will you overcome them? Thinking about what can go wrong is just as important as projecting a profitable future. This is where knowing your self as well as understanding the business climate is important. What will get in your way personally? Are you willing to ask for help? Is it your procrastination pattern, or fear of making sales calls? If so, you better take steps to handle that. Is it the eroding tourism market due to high fuel costs? If so, what will you do accommodate that reality? It’s always wiser to face obstacles head on. Be on top of them before they’re on top of you.
10. What’s your personal commitment to your business? Saying you’re committed to starting or building a business, or saying you’re willing to do what ever it takes is different than actually doing it. Having a successful business takes action – clear and consistent action. If I had a dime for every time I heard a business owner say, “I know I should manage my time better, I know I should make ten calls a day, I know I should have a marketing plan…” I’d be a wealthier woman. Being committed means willingness to be outside your comfort zone for the good of a higher cause. Your business! Of course we all have strengths and weaknesses, you don’t have to be good at everything. Know your self, step up to the plate, or delegate.
It’s YOUR life…imagine the possibilities!