We’ve all read news stories about once thriving businesses that are now in danger of closing their doors, and many of us have wondered how that happens. While it is possible that some unforeseen circumstance caused the downfall, it’s more common to find that the leadership lost touch with the business operations, shifting customer needs or emerging trends. In other words, they failed to conduct a regular business analysis.
Just like your annual check-up with your doctor, your company’s health depends on your commitment to checking in on mission critical issues – those involving your ability to achieve goals, anticipate threats and optimize performance.
A basic business analysis helps to ensure your continued success. As a CEO or Senior Executive, you should be asking (and answering) these 5 questions at least once a year.
#1 – What Are We Trying to Accomplish?
Your business analysis starts by answering the question, “What business am I in?” Then ask yourself, “What business am I really in?” As we work inside our companies, it’s easy to lose sight of the forest through the trees (so to speak). Consider these examples:
- Does an insurance agent sell policies – or does she protect her clients’ interests?
- Does an HR professional manage benefits – or does he create a healthier work environment?
- Do electricians wire houses – or do they ensure safe and reliable access to power?
The way in which senior leaders think of the company and its services/products can impact every aspect of operations. By keeping track of the bigger picture, you’ll be better prepared to craft an inspirational vision and motivational goals.
#2 – Who Is My Ideal Customer?
As the first step for any winning Sales Strategy or Marketing Strategy – you must know who your customers are. Begin by exploring who your current customers are, but then broaden your exploration to include questions like:
- How will these customers’ needs change in the upcoming year or two?
- How do these customers align with our company’s growth and expansion goals?
- What kind of customers could we engage if we altered, improved or upgraded our offerings?
#3 – What Do Our Customers Buy from Us?
While you’ll want to define your products or services, it’s important to expand the question to include the solutions your offerings provide. Customers buy because they believe the product or service can solve some challenge or need they’re experiencing. So, ask yourself, “What special benefits or advantages do we offer that our competitors don’t?”
Keeping sight of the reasons your customers buy is essential for continuing to address their evolving needs.
#4 – How Does the 80/20 Rule Look for Our Business?
When it comes to time management and productivity optimization, the 80/20 Rule states that 20% of tasks contribute to 80% (or more) of valuable output. In other words, the majority of your business results are driven by less than a quarter of the work your employees perform.
By identifying the 20% of work that produces the greatest impact, you can help your employees prioritize their time and reduce their stress. And satisfied employees are your most valuable asset.
#5 – What’s Your Competitive Advantage?
Your competitive advantage is your specific area of excellence. It’s the ways in which you’re superior to 90% or more of your competitors. So, to identify your competitive advantage, you must first understand your competition.
Conducting a regular business analysis helps you maintain awareness of your competition – which is essential because, as their capabilities and offerings shift over time, your competitive advantage is impacted (and may no longer be a differentiator at all!).
For more tips for CEOs and Senior Leaders, read our post: 3 Sales Mistakes That Are Hurting Your Business.
Get More from Your Business Analysis with FocalPoint Canada
At FocalPoint Canada, we guide our clients in overcoming challenges and leveraging opportunities with proven processes and methodologies that have been used by thousands of successful businesses over the past two decades. Our FocalPoint business coaches use their expertise to teach our time-tested methods through individual coaching, group sessions, or trainings and workshops.