Clarity is the alchemy that divides businesses which fail from those which enjoy longevity. When businesses lose direction, or have none to begin with, it’s a sharp and relatively quick downwards spiral towards closure or acquisition.
A lack of clarity is something that can plague the smallest to the largest organisation. We are operating in a volatile, uncertain, complex, ambiguous (VUCA) world, and in facing these conditions, and dealing with our own internal turmoil, we can find ourselves lost – or at a loss – at times.
1. What business are you in?
This may seem to be the most mundane question to begin with, but in contrast to its simplicity, it sets the strategic direction for organisations.
Consider McDonalds, for example. Asked what business McDonalds is in, we would probably answer fast food. Ask McDonalds that question and the answer you’ll get is property.
Knowing this fact helps us understand that McDonalds will only purchase prime property, in high-traffic areas. Unless this raison de etre changes, you will not find McDonalds locating in Petrol Stations.
Understanding the very core of the business you operate gives a massive injection to knowing the strategic direction of the organisation.
Related: Create Clarity for Your Team
2. Is the market there?
Whilst the answer to question 1 is an internal, strategic question, question 2 requires engagement with sources outside your organisation or circle of friends.
It is imperative that you quantify the size of the market that you are aiming for, and understand as much about the market dynamic as possible, prior to market entry.
You have to consider the size of the market, how competitive the space is, and whether power is held asymmetrically by any of the players. Think long and hard about how you are going to win your piece of the pie, particularly if you are low on resources versus your competitors.
3. What problem do you solve?
Answering this question helps you understand the need your business addresses. Position your answer in the context of solving a problem that a consumer or business has.
Doing so shifts your focus from features to benefits. For example, if you are a motor manufacturer, saying that you get people from A to B might be true. However, if the only thing your car does is get you from A to B, then your competitor will also be bicycles.
There is far more to this picture than what may be immediately obvious, so it’s important to invest time really thinking through your answer to this question.
4. Who do you serve?
This question is intertwined with 3 above, but moves the question to a different level. This focus requires gaining clarity about the consumer who will buy your product or service. Or, if you’re in the B2B sector, which is the organisation your business would love to serve?
It is important to define this to the point that you can describe your client in terms of an actual person, or specific organisation, and have identified the traits that make them your ideal client. This client–centric approach allows you to gear your business and your marketing around your client’s specific needs and expectations.
5. How do you make money?
- How does your business intend to create income?
- Are you producing a product with a certain margin on at the time of sale? Are you offering a service of some kind?
- What pricing strategy are you going to pursue?
- What is the pricing currently on offer by your competitors
- How does your pricing compare versus the value you are – or intend to be – offering?
Pricing your offering at the correct point is one of the most crucial decisions you’ll make as an entrepreneur. Price too low and you leave too much on the table. Price too high and your demand dives. Pricing in the middle secures you the highest possible demand at the best possible price.
6. How much money do you make?
If you consider the cost structure that your business has, versus the revenues that you imagine you will achieve:
- How much money is left on the table at the end of each month, each quarter and each year?
- Is the residual income sufficient to reward you for the risks you are undertaking and the effort you are investing into the business?
- Is there enough cash flow to sustain growth and to fend off competitor interest, should it arise?
- Are your earnings sufficient to meet your longer term expectations, and those of your shareholders or investors?
If you are not comfortable with cash flow analysis, get some help from someone who is. If your business isn’t generating cash the business model won’t sustain.
7. How are you different from your competitors?
What separates you from your competitors? Why would a customer buy from you versus another industry player? When there is parity in the market, the lever to shift is price. Those lofty revenue ambitions that you set drain away as you relentlessly discount to win business.
Your differential needs to be clearly definable and must be something meaningful to your customers. It is absolutely pointless to excel at something that is meaningless to your customer.
There are certain things that you must do to play in the market, and then there are things you can do to win in the market. How do you win over your competitors? Unless you have a distinct and definable differential, expect to compete on price.
8. How do you delight your customers?
There is a vast difference between locking your customers into a contract for 24 months – so that they cannot leave you even if that would be their choice – to designing your offering to be so attractive to your customer that they choose to remain with you, despite competitor approach.
If you don’t believe this is possible, consider the millions of Apple fans and how unlikely it is that they will defect to other providers. Delighting customers means really understanding what they want, what they need and when and how to give it to them.
Remember that in marketing, everything counts, so this question must be answered in the context of all the marketing P’s – product, price, place, promotion, people, process and physical environment. With the digital age upon us, these can be expanded to include participation, prediction and personalisation.
9. What happens if …
A large part of your strategic planning approach must be to scenario plan. We are in a VUCA world, and as a result, things happen that we did not anticipate.
Any business can overcome the smaller humps and bumps. However, what if a ‘black-swan’ event occurs; an event that is very rare, but highly significant, to the extent that it is game-changing. Think in the context of how AirBnB disrupted the hotel industry and how Uber has changed the taxi industry.
- What if an AirBnB or Uber arrives in your industry?
- What if they take your largest customer?
- What if they undercut your pricing by some margin?
- What if they offer more value than you can afford?
Negative events should not be the only thing you consider in scenario planning.
- What happens if one of your competitors goes up for sale?
- What happens if one of your competitor’s largest distributors approaches you for business?
- What happens if the opportunity of a lifetime presents itself on your doorstep?
- How ready will you be able to leverage the opportunity to your advantage quickly?
10. What next?
This is a question that every entrepreneur must hold in their mind, because it dictates how the business is managed and run.
- Is the business being built for sale in 5 years?
- Are you actively looking to franchise at a future point?
- Are your plans to expand into Africa or other continents in the near future?
- Is the business being run as a cash cow with the intention of an exit within the next few years?
Each of these strategies has a very different and distinct way that the business must be managed. You must know therefore, with clarity, what your intended future holds.
Once these 10 questions have been asked and answered to your satisfaction, they will need to be asked and answered again in a repeating cycle. The process of gaining and maintaining clarity around your business is never-ending. The business environment is always changing. Similarly, you as an entrepreneur are not static in your needs. Clarity is business alchemy. And knowing the answers to these ten questions at all times during your entrepreneurial journey enables you to transform your business into gold.
Crisis Management In A Digital Age
If you’re at a loss for how to go about jumping into the fray of social media commenting and opinions, here are a few tips to protect you, your business, and your brand’s reputation.
In business, you can’t ignore what’s being said about you online. Most importantly, you need to respond appropriately. The internet is a free-for-all of consumer commentary, inevitably, some of it can be damaging.
Crisis management comes with the Online reputation management (ORM) territory of changing negative sentiment around your brand into a positive.
It can be difficult to know how to respond, keep things positive, or change the sentiment around your brand. If you’re at a loss for how to go about jumping into the fray of social media commenting and opinions, here are a few tips to protect you, your business, and your brand’s reputation.
1. Avoid a Knee Jerk Reaction
Reading what could be perceived as negative commentary on your brand, business, products, services, or employees, can cause you to jump straight into responding by justifying yourself or trying to show that the consumer is off the mark and misinformed. These are normal reactions, but it isn’t necessarily going to help your brand or positively push your online presence.
Rule number one is not to place blame, especially on the consumer or commenter, even if the comment is negative, false, or misleading. Rule number two is never to take it personally and do not to respond emotionally or in an accository fashion.
Pay attention, think it through, then respond in a calm, professional and appropriate way. Set a clear ORM response policy around commenting and responding to comments.
2. Consider Comments as Free Research
Think of the comments you receive on social media, both good and bad, as consumer research. Keep a record of your comments and responses, tips, questions, suggestions, and key problems. You’ll find that your customer, fan, and follower will give you valuable information that you would not otherwise have.
The idea is to change negative sentiment around your brand into positive while at the same time leveraging off the information and data gained through this process. This perspective will assist you to see the value in this engagement with your brand. Online Reputation Management should be a daily task. This is all part of maintaining your online reputation and digital media presence.
3. Remember That Everyone’s Reading Your Responses
The most important reason to respond to both positive and negative comments is because everyone else on that thread is reading the banter. The amount of people reading the comments usually outweighs those actively participating in the conversation by commenting. They are all paying close attention to how the business and brand responds.
Related: How To ‘Crisis-Proof’ your Company
Appropriately responding to less negative comments presents the opportunity to demonstrate how connected the brand is with their consumer, it is the perfect platform to solve potential problems and defuse particular situations. When a business listens and responds to feedback online, in an appropriate manner, a sense of trust is created. It shows that the brand is prepared to go above and beyond. This can stretch far beyond the commenter.
4. Hire Talent To Do Your Responding
In order to fully tap into the benefits of social media you should consider getting a specialist on board to manage your social content along with the responses that this content creates. It is important to be on the same page as your marketing team. If you are looking for an agency with the experience, guts, and glory to carry your brand, then get in touch with So Interactive for your digital marketing needs.
How Entrepreneurs Can Make Good Decisions Quickly
Below are some tips on how you can do just that.
As an entrepreneur, you have to face difficult decisions on a near-daily basis. These can range from deciding on what marketing strategy suits your business best or choosing what new talent to hire for your team. Making good decisions quickly can be tricky, even more so if you are pressed for time. However, there are methods you can use to do this.
Decision-making is an intrinsic part of being an entrepreneur, and once you know the answer to “What is decision-making?” you will be better able to make good decisions, quickly. Below are some tips on how you can do just that.
Acknowledge what you are trying to accomplish
Making decisions can be difficult if you do not know what, exactly, you are trying to accomplish. Before you reach a decision, you will need to carefully look at what you are trying to accomplish and optimise. Once you have done this, you will be able to make the right, and quickest, decision.
An example of this is changing a marketing strategy. Are you trying to reach a new audience? Are you trying to release a new product to the public, or are you trying to change your brand’s image? Once you have acknowledged what you are trying to accomplish, you can decide on what options best suit the situation. This process might take time at first, but, once you have done it a few times, it will become second nature.
Use available data
Having evidence or data to help with a decision can be highly useful for any entrepreneur. And in today’s online world, you will be able to find enough of both to help you make any decision, whether it is big or small.
Using data and evidence, you will be able to see how your company is currently performing and make a business decision based on this data. The key to making good decisions in the shortest amount of time possible is having the right evidence and information available. You will need to be sure that you understand the data and evidence in order to use it as part of your decision making.
Give yourself a deadline
It is important to set deadlines for decisions. This way, you will be able to make them quickly, effectively and before any problems become bigger than they need to be. For example, set a deadline for deciding on a new employee a week from their interview date. This gives you time to examine their strengths and weaknesses in depth before deciding.
Having a deadline creates a sense of urgency, meaning that you will spend less time procrastinating and more time on the actual decision-making. It will keep things moving forward and you will avoid “paralysis by analysis”, a common occurrence in entrepreneurs and business owners. Deadlines help to keep the goal in sight, allowing you to make a decision quickly and easily without overthinking it.
Get an outside opinion
Even the Khaleesi in Game of Thrones has an advisor to help her make decisions. And if she has one, it makes sense that a business owner or entrepreneur should too. It is a good idea to get an outside opinion, especially if you have been thinking about a decision for a long time.
An objective voice can help you to reach a final decision, as they can help you consider points that you might not have thought of. You could ask your friends or your colleagues for help, but be sure that they do not have any attachment to the decision. This can make it difficult for them to give objective advice. If you have a mentor, this is the best person to ask for advice.
Reframe the problem
Step back from the problem or decision you are facing and look at it from another angle. Often, reframing a problem or situation can help you to reach a speedy conclusion, especially in terms of business.
Try to see the issue from as many perspectives as possible, as this will help you to ensure that you are not emphasising one aspect and neglecting another. This is all a part of the answer to “what is decision making?” as seeing a problem from another perspective can help you to see the bigger picture. You should try to think of at least three different ways to see the problem and work from there.
One of the most important ways to make good decisions quickly is to keep calm. By keeping your emotions in check, you will better be able to make a decision that is smart and objective. The steps in decision-making include knowing what you want to accomplish, using the data available to you, giving yourself a deadline and asking for an outside opinion. Once you have taken all of these steps, you will be able to make efficient and effective business decisions.
Simple Ways To Make Your Small Business More Professional
If you are looking to boost your business success and look more professional to clients, read on for some top tips on how to do so.
Owning and operating a small business can be tough, time-consuming and at times, frustrating. There is always a business out there that is more efficient, funky or more professional than you. But you can get an edge on the competition if you strive to be better.
One way to bring in more professionalism is to send your staff on office administration courses so that they are able to perform administrative tasks to improve efficiency, or you could hire a professional administrative assistant to do the job. If you are looking to boost your business success and look more professional to clients, read on for some top tips on how to do so.
Create a modern website
In today’s modern, digital age, the very first thing that people see when looking for your business is your website. And, having an unprofessional, outdated and badly designed one will send potential clients running for the hills before they even contact you to find out about your products or services.
It is not enough to have a Facebook Business Page, you will need to have a professional, modern website that tells clients exactly who you are, what you do and (most importantly) what you can do for them. You will also need to include your contact details, office address and business hours, so that your clients can reach you when they need you. A modern website will entice customers to find out more about your company, too.
Always use a business email
You might think that creating another email address is tedious, but think about how embarrassing it would be to email clients from your current one that you might have created in high school (BarbiePrincess89@hotmail.com is hardly going to impress anyone).
If you already have a business website, then setting up a business email is quick, simple and more often than not, free. You can use Google My Business or other similar tools to create a business email that reads YourName@yourbusiness.com, which is much more professional and will send the right message to your clients. A business email also makes it easier for you to answer work emails quickly and efficiently, as you will not be scrolling through your personal inbox, trying to find them.
Have someone to answer your phones
If you have employees for your small business, you should look into sending someone on office administration courses so that they are able to answer your office phone quickly, effectively and in a professional manner.
Having a receptionist or office administrator to answer your phones immediately makes your small business seem more professional. And it will allow you to focus on more important tasks, rather than having to answer a ringing phone all day. Your office administrator will be able to forward calls to you, take messages and answer any queries that clients may have. This will give clients a positive experience when dealing with your business too.
Avoid formal titles on your business cards
If you are a “one-man-band”, so to speak, it can be tempting to call yourself the CEO of your business, or a similarly formal title. After all, you are the one putting in all the work, right? However, clients will not be impressed by this title and it could backfire rather than work in your favour.
More often than not, calling yourself the CEO of a one-person company will make you look unprofessional and appear to be a “small-time” operation, especially as the CEO is the one chasing up clients and running around doing all the grunt work. It is best to simply leave it at your name and the name of your business. You do not need a title to prove that you are good at your job, rather let your products and/or services speak for you.
Lease a professional office space
If you are just starting out or your small business has not yet taken off, you may not have a professional office address or space. While it can help to cut costs to operate out of your home, it will not help to raise your level of professionalism in the eyes of your clients.
You could look into leasing a workspace in a coworking space such as No 80 Hout Street in Cape Town or Worq in Pietermaritzburg. Having a professional space to meet with clients and to conduct your business will increase your success and will help you to stand out against the competition. Coworking spaces are highly popular among young entrepreneurs and you might even meet like-minded people who you can collaborate with on projects for clients.
Professionalism is in the eye of the beholder
Going on office administration courses, having a modern website created for you, creating a business email and hiring someone to answer your phones are all highly effective ways to make your small business more professional. Clients will appreciate the effort that you have put into crafting a professional presence, no matter if you have one employee or ten.
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