The 9 Most Important Questions To Ask About Your Business
How long have you been sitting on the idea to open your own coffee shop? How well is your new product meeting the needs of your customers? How much time have you spent wondering if your startup is positioned in the right market?
Often among the biggest challenges of starting a business is the elusive business model, without which the “Is my business good enough?” question hovers in the air.
The Business Model Canvas* is a global standard for companies and non-profits in nearly every sector. Its nearly-universal relevance comes from its nearly-universal questions. Its consideration of everything from customer segments and value propositions to revenue and cost structures helps small business owners ask the right questions. The tool’s organization of these questions into nine interrogatory blocks helps organize answers into a holistic understanding of the business.
Have you ever been asked, “who exactly is going to buy this?”
The Question You Should Ask: “Who, specifically, are my customers?”
Why it Matters: Your ability to know specifically, rather than broadly, who you are selling to and what they see, think, and feel will determine the value that you can bring them. Rather than selling to “millennials”, try selling to “18-to-21-year-old students looking for a quick meal on a tight budget”.
Have you ever been asked, “why would I want that?”
The Question You Should Ask: “What are the customers going to gain from this? What will be the main value, and what will be the peripheral benefits?”
Why it Matters: Knowing what the primary value your customer gain from your product or service will determine your startup’s roadmap to success. This primary value should be the focus of your prototype or first run at your service. Focus on peripheral benefits only once you know you can solve your customers’ most important pains.
Have you ever been told, “I didn’t know this existed!”
The Question You Should Ask: “How am I going to let my customers know about my business?”
Why it Matters: Once you know who your customers are, it’s likely that you know what media they are looking at. If this isn’t the case, do some research. There’s no sense in using Facebook to market your company to a group of buyers that aren’t using it.
Have you ever been asked, “What kind of customer service do you provide?”
The Question You Should Ask: “How well do I want to know my customers? What kind of experience will I offer?”
Why it Matters: Some businesses offer personalized products and services, others offer the same thing for every customer, and others still offer a mix of both. The model you choose to start with for your first customer may vary from your end goal. You should be able to maintain your customer relationships at scale or to transition them to a scalable model.
Have you ever been asked, “how exactly do you make money?”
The Question You Should Ask: “How will I turn a profit?”
Why it Matters: This question is hopefully something you’ve been asking yourself from the outset, and its importance is self-explanatory. Explore each aspect of your product or service to find out what you can monetize, and test your proposed pricing model on your potential customers.
Have you ever been asked, “how do you do that?” (Part I)
The Question You Should Ask: “What core strategies are going to lead to my success?”
Why it Matters: Your strategies should reflect your value proposition, and should not become a to-do list. Look for the longer-term, higher-level strategies like “Channel Management”, “Infrastructure Revitalization”, and “Restaurant Redesign” that will catalyze your success. These strategies will help determine your activities as you continue to grow your business.
Have you ever been asked, “how do you do that?” (Part II)
The Question You Should Ask: “What do I need to make this a reality?”
Why it Matters: In planning for success, you should be able to anticipate what you’ll need to have in assets. As an example, a restaurant will need a kitchen to cook in, ingredients, and perhaps a wait staff. What are the “ingredients” your industry requires of you, and how do those fuel your key activities?
Have you ever been asked, “do you do it all on your own?”
The Question You Should Ask: “What can I outsource?” and “Who do I need on my side?”
Why it Matters: Things like accounting or graphic design are great to look for in partners. Can your partner create an online marketplace for you? Can you bring in content partners that will help you build up your marketing? There may also be key people you need on your side, like investors. By establishing key partnerships, you can supplement the resources you lack with expertise you need.
Have you ever been asked, “how much does all of this cost?”
The Question You Should Ask: “What investments do I need and want to make?”
Why it Matters: Understanding your costs’ high-level relationship with your value proposition will help you later when you’re making spending decisions later. Take a close look at what is needed (fixed) and what is flexible (variable).
Whether starting a business for the first time or introducing a new product or service into your existing company, the Business Model Canvas ensures cohesion in your company.
*The Business Model Canvas was developed by Alex Osterwalder, co-founder of Strategyzer. Find out more at https://strategyzer.com/