It is good business practice to continually ask yourself key questions in order to stay focused and not forget the fundamentals of why you are in business. The beginning of the year is a good time to review the following 8 fundamental questions, but you should continue to ask them year in and year out at the very minimum. In our example, we are going to use the pizza parlor owner of Toni’s Pizzeria, who did not engage in self-examination of his business. However, regardless of the type of business or size of the business, the key questions still apply.
Why does your small business company exist? Many businesses have a single purpose when they start their business. Over time, for a variety of reasons, they will alter or change their purpose. I am not suggesting you do not alter or change your reason for being but you must understand it. Toni’s Pizzeria wanted to be known for the best tasting and best value pizza in town. However over time, for many reasons, they added a sit down restaurant and were trying to build a restaurant business. Their customers became confused and the pizzeria lost its focus.
Who is your customer? You need to know your customer. Do you really know them? The typical customer of Toni’s Pizzeria was a family of four, middle to lower middle class, who lived in an approximate three mile radius. This typical customer ordered pizza from them approximately two times per month. Toni assumed that his current customers also would like a restaurant with a variety of Italian dishes besides pizza.
Why does anyone need what you are selling? Speak to your customers! Too many small business companies will ask a question now and then and feel they are speaking to their customers. Your customers will give you input and guidance to what they want and what they will do, if you ask the right questions. Take a survey and listen to what they say. Toni’s Pizzeria did not take any surveys.
What and who are your competitors and what are they doing? You should always know what and who your competitors are. You can learn from them, you can see what is successful for them and what is not. Just because your competitors are doing something, does not mean it is right or successful. The small business owner of Toni’s Pizzeria never looked at his competitors that closely.
Do we have the right leadership? As companies grow, mature or modify their direction, they may require managers with different skill sets. Toni’s Pizzeria being a family business did not have a manager, it was Toni. He did very well in managing the fast, hectic pace of a pizzeria. However, when it came to managing the pizzeria along with a sit down restaurant the skill set needed was different and Toni was lacking in that skill set.
Do we have the right employees for the right time of your business? Employees have different personalities. You may be in the start-up phase of a business and your employees are all trying to make this work. They not only are making money but really are having enjoyment in building the business. At the same time you may be in a mature business and the same employees who helped you build the business are bored because there are no longer being challenged like they were when building a business. In Toni’s Pizzeria he took his best employees from the pizzeria and moved them to the restaurant. He did not really know or understand his employees. They all left after several months. They liked the Pizzeria side because it was less customer contact and more fast paced than the restaurant side of the business.
How are you going to continue to build and drive revenue (profits)? I put profits in parenthesis because that is the real name of the game; not how many sales you have, but how much profit you have at the end of the day. This question is paramount and time and thought needs to be put into this question. Is there a way I can reduce expenses without hurting our product/service? How do I expand my current business? I wonder if Toni’s Pizzeria’s owner had asked himself this question before deciding on adding a sit down expense.
How are your employees? Unfortunately, too many small business owners do not treat their employees as an asset. Much too often they are treated as a commodity. They know when you are sincere so keep the lines of communication open and involve them in the plans for the business, how they will be implemented and the implications for the employees.
The sad part of this article is that Toni’s Pizzeria closed suddenly. I believe that if he had really asked these questions of himself he may still be in business today.