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Ten Things Every Business Owner Should Know

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The Secret Formula

The Secret Formula

I have created a list of important questions that every business owner should know about their company.  These might not be the most important, and the list is far from comprehensive, but they are definitely things that should have your attention.  Below is the list and after the list a few comments to make you think.

  1. What is the best source of revenue?
  2. What is your biggest expense?
  3. What is the biggest hurdle holding you back from being better?
  4. What is your most profitable product or service and why?
  5. Who is your best customer?
  6. Who is your worst customer?
  7. What do you do best?
  8. What makes you different from the competition?
  9. Would you buy from you?
  10. Why do your customers buy from you?

Items one and two on the list are similar and are critical to understand since they are most significant to your bottom line.  Your biggest expense is where you should start first when looking to cut costs.  For many businesses this is cost of goods (Materials) or it is labor costs.

Item three is good to know because it is restricting you and by alleviating it you will soar to new heights.  This is probably the ability to generate more sales or government regulation for many businesses.  This is especially true for small businesses since they usually don’t have the luxury of full-time sales force or compliance department.  This task is handled by the owner or someone who is not skilled or trained in sales or government compliance.

Item four can be easy to quantify in terms of profitability but could be a mystery as to why.  I urge you to get to the bottom of why it is most profitable because there is a good chance that you have hit on something that differentiates you from the competition. This is the “why you stand out from the crowd” answer.  That is gold.

Items five and six are also similar and you need to know why.  For your worst customer you may want to consider what you could do to spend less time with them and more with the best customer.  This can be a type of customer not a specific name of one.  What attributes are associated with the best and the worst.  Getting rid of the worst can be addition by subtraction.

Item seven might be the answer to item four.  Find this out and do more of it and customers will come your way and be happy and spend more and be more loyal.  That is why it is gold if you know the answer.  If you don’t why or are not sure – ask some of the customers who buy your most profitable product or service.

Item eight is linked to number seven.

If you can’t answer yes to number nine then you need to correct that immediately.

For number ten if you don’t have a good idea – ask them.  You might be surprised by what they tell you.  It is information you will need to act upon depending what they say.

Have great week.

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