Do You Really Know Your Business?

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To achieve success in business, we need to have a plan for the future. An effective plan is written down, and includes achievable, measurable goals. It can help us effectively anticipate and manage change.

This sounds straight forward enough, but can make us feel as though we need a crystal ball. How can we anticipate what will happen in the future? How can we tell if the goals we set for our businesses are realistic?

Some people use formulas for setting projections, some use industry benchmarks, some rely on intuition as a guide. Setting realistic goals requires a mix of all of these, but most importantly, goal setting requires knowledge of your business environment.

With so many demands on the business owner or manager, it is easy to become completely focussed on the day to day tasks of running the business. Sometimes we lose sight of where our business is heading, or we overlook changes that are happening around us. When this happens, our 'planning' feels a lot more like 'guessing'. We need to change the 'guessing' to 'knowing'.

Five things to make a habit of knowing:

1. KNOW YOUR BUSINESS

What business are you in? Define your business creatively but carefully. You need to be flexible enough to respond to changes in your market without losing sight of who you are, or falling
victim to fads. When you make a decision about a new product line, marketing campaign, or expansion, always review the proposed change against your definition of your core business.

Don't forget to constantly review your business to get a picture of where you've been, and where you are heading. Compare your sales to last year, last quarter, last month, last week. What are the patterns you see? Are you watching your expenses? Regularly review ways to increase your profitability.

Is your traffic increasing or decreasing? Do you know the size of your average sales transaction in dollars and units?

By knowing more about the details of your business performance, you will be able to make effective plans for improvement.

2. KNOW YOUR CUSTOMER

Are you talking with your customer regularly? Take some time each day to talk to your customers. Ask them about how they heard aboutyour store, what they feel you are doing well, or what you could improve. What products do they like best? Are your customers repeat customers? Are you gaining new customers?

Not only do you need to know about your customers' impressions of your business, you also need to know more about them. Spend time getting to know them personally. Through casual conversation you can learn more about their tastes, their lifestyles, and their
interests.

Periodically, you can also take a brief survey of your customers to quantify your market information, or to get the customers' input before making a major change in your business.

You will gain a better understanding of your customer, and be able to provide better service.

3. KNOW YOUR COMPETITION

Identify your direct competition (those who carry the same or similar product) and indirect competition (where the customers spend their money if they are not buying the type of product you offer?).

– What are they doing differently than you are? How are you unique?

– How is their business performing compared to yours?

– Have they copied or emulated your business?

Perhaps you need to make a change to stay one step ahead of the competition. Be careful – you need to make sure you don't fall victim to trends, or being a copycat of another successful business. Many businesses jumped on the internet bandwagon, without fully evaluating whether it would work for their business.

If you know your business and your customer, you'll be able to evaluate what will work for you.

4. KNOW YOUR INDUSTRY

How is your industry performing on a local, regional or national level? How does your business compare to the rest of the industry?

Read trade publications regularly. They publish information on trends in your industry, new products, new technology, current industry issues, educational opportunities and conferences.

Join local business associations such as the Chamber of Commerce, industry association or professional associations. Attend their seminars and functions to stay abreast of current issues, trends, and to maintain contacts.

5. KNOW YOUR ENVIRONMENT

No business operates in a vaccuum. What is happening around you? Take a walk at lunch and take note of what other businesses are doing. Look for new ideas, displays, and products. What could they improve? What inspiration can you find for your business?

Stay in touch with business news on a daily or weekly basis. Find out what the global, national, regional and local economy is doing. What are the unemployment rates? How is tourism? What
about consumer confidence – are people spending money?

Keep track of what business and industry leaders doing that is newsworthy. What can you learn from their successes or mistakes? What have they done right to take them to the top?
The internet is a great way to maintain awarenes of news & current issues. You can sign up to receive news in your email box, or bookmark sites that carry local or global news.

Make a commitment to staying in touch and knowing your business. Maintaining an awareness of your business, your customer, and the environment that your business operates in, you will be more successful in planning for the future, setting realistic goals and anticipating & managing change.

Written by Melanie McIntosh
Source: http://www.inspire.bc.ca/articles/knowing.html

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