When I first meet an entrepreneur, I ask them the following five questions. If an entrepreneur has clarity on these questions, they either are already successful in their business or soon will be.
Why did you start your business?
Most entrepreneurs start their business to solve a problem they perceive. That can vary from getting out of the grind of working for someone else to solving a painful problem for a specific market. While starting a business is a tremendous amount of work, it is extremely satisfying to make progress to our original goals.
As a business grows and becomes successful, we often lose sight of the initial magic that caused us to start the business in the first place. Or we end up so busy running the business, that we have no time for the fun parts that we liked at the beginning.
It’s never too late to go back, rediscover why you started your business, and refocus on living your “Why?”
Where will your business be in three years’ time?
I’ve been involved in businesses where we focused on making the next year a little better than the previous year. While this can be sustainable, you can either miss massive opportunities or be blindsided by a competitor or market events.
Lift your vision and look three years out. How big will your business be? What markets will you be operating in? What will by your products and services? Thinking through this and writing it down gives you a concrete target to aim for. This keeps you and all the rest of your team aligned on your direction.
What are your must do 3-5 goals for this year and the 3-5 critical goals for this quarter?
It is common to set too many goals for a year or a quarter. It is hard to force yourself to choose a small set of goals. Putting a lot energy into a small set of goals aligns everyone. Choose goals that have clear finish lines so that at the end of the quarter and the end of the year you will know for certain whether you have succeeded or not.
I recommend that you take time every quarter to choose your goals for the next quarter. A quarter is 13 weeks. Long enough to make excellent progress. Short enough that it you get off track, there is still time to course correct and choose a better set of goals for the next quarter.
What are all the things you know about your ideal customer?
When we start a business, we pretty much take money from any customer that wants to buy from us. Over time, we learn who are the best customers. The bigger the pain the customer is in and the better your product or service acts as a pain pill, the better the customer.
Identify all the characteristics of your ideal customer. If that person walked through the door today, what are all the things you could tell me about them? Having an ideal customer profile makes it easy to say no to poor performing customers, so that you can focus on the high value ones that will make you the most money.
How much net profit do you make from every sale of your product or service?
I believe that businesses are meant to make money. Entrepreneurs take a lot of risk. They should be rewarded with lots of profits.
It is easy to track top-line revenue growth. It can be challenging to make sure that you know in detail how much money you are making. From every single sale. Every day or at least every week. Financial statements are too late and don’t have enough detail on how you are making money. Build the systems that let you know your net profit in near real time.
Summary
To be successful in business, focus on your 3-year, 1-year, and quarterly goals. Make it easier to earn money by knowing who your ideal customer is and the pain point you solve for them. Have fun by focusing on the original reason and purpose of why you started your business in the first place.
