Have You Answered These 5 Questions Before Setting Up Your Business?

Thursday, July 7, 2016 - 19:00
 Have You Answered These 5 Questions Before Setting Up Your Business?

Ask these questions and you’ll be on the way to creating a profitable business that will play to your strengths and has long-term growth potential.

Ultimately, a small business is about you, the problem you solve, and the customers you make happy.

Let’s ask some questions that will help you work out how to approach that business idea you’ve been mulling over.

1) What problem am I solving?

You need to understand the problem you think you can solve in great detail.

What problem will go away for customers once they buy from you? Is it thirst, hunger, looking swanky?

This is your business proposition.

It should be based on your passion, must be a skill you have, but, above all, it has to make someone else’s life better in some small way.

How are you adding value? Fundamentally, there are two ways that you can help your customers:

  • Avoid pain
  • Gain pleasure

Make sure that you understand how your business idea, at its core, appeals to the people you intend to serve.

Once you’ve pinpointed a business idea that you care about, solves a genuine problem, and is something that your customers will pay for, the next step is: find those people!

Key tool: Value Proposition Canvas. A useful template that helps you work through your business idea.

2) Who are my customers?

You think you have a great idea that makes your customers’ problem disappear. Now you should confirm your assumption.

The problem that you’re hoping to solve needs to affect enough people so that they can sustain your business and make you a profit.

This is the greatest difficulty for many businesses at the planning stage: they solve a problem but don’t have a big enough market.

Tweak how you communicate the problem that you can solve to the people that you’re hoping to serve. For your business to be successful, you need to get to know these people in a lot of detail:

Who exactly will you be serving?
What do they do?
When do they need your product / service?
How would they choose your product / service?
To comprehensively answer this question, you’ll need to go out and ask plenty of questions to test whether your business idea is a good one that has a big enough market for you to serve.

Key tool: Google Consumer Surveys. Avoid asking your mum if she thinks you have a good idea.

3) Where are my customers?

Once you understand who your customers are, next think about how you will get them to visit you and buy from you.

‘Nonline marketing’ is a concept of marketing that recognises the shrinking gap between the online and offline world.

Where is your clientele in the real-world and where are they online? You need to be visible in these places!

Work to create both offline and online relationships. This can be as simple as saying hello to your regular customers and sending out a monthly email newsletter.

The goal is to build a community of the people who relate to the product / service that you offer. i.e. “London Coffee Lovers”, “Edinburgh Burrito Aficionados”, “Bristol Real Ale Fan Club”.

If you can convince enough of these people that you have their best interests at heart – that you care about the same things they do – you have a business.

Key tool: Mailchimp. Stay in touch with your best customers. They are the core of your business.

4) What are my strengths?

What do you do really, really well? Better than anyone?

This should be your primary focus. Play to your strengths and build a business around what you’re good at.

It’s better that your business grows by doubling down on what you do best rather than constantly trying to do everything well.

This is what market leadership looks like. It means that you aren’t following the crowd, but are instead creating a unique business based on your expertise.

Key tool: Business analytics. Once you start trading, understand which of your key strengths your customers love the most. Do more of that!

5) What are my weaknesses?

You’re building on your strengths, but no one is the perfect business person. Recognise your weaknesses and work to mitigate them.

As your business grows it’s a certainty that you will need help.

To be successful in the long term, your business needs a team that covers for your weakness. Don’t hire someone because they’re like you. Hire someone because, while they share your vision, they have very different abilities.

Stink at numbers? Hire someone who loves them (yup – they exist). Not great at small talk? Get someone on your staff who can natter to customers all day.

Key tool: Old fashioned self-awareness. Recognise what you can’t easily do and work with people who can.

Keep Asking these Questions!

Answering these questions shouldn’t be a one-time exercise. Schedule time to answer these questions every couple of months.

You, your business, and customers will change as your business grows, so keep making the adjustments that will put your business in a position of strength:

  • a laser focus on what you and your team are best at
  • serving a specific group of customers
  • always monitoring to what your customers are saying and doing

The answers to these five questions can provide the basis for a successful business that is built around your passion and your customers’ needs.

A business that is driven by both passion and data is an unstoppable force.

Now, grab a pen and paper!

Nick Blackbourn