Ten Questions Business Leaders Need to Ask Themselves to Maximize the Success Potential of Their Business

To maximize the potential for long-term success, business leaders need to ask themselves some serious questions. Each of these questions is designed to scrutinize the core essentials of the business and to help put business leaders on the path to success.

1. What is your value proposition?

This is, perhaps, the most important question. What is your value proposition? If you can’t explain what it is in three jargon-free sentences or less, you’re likely to be competitively vulnerable.

Think about it.  Without a clear understanding by customers as to why they would want to do business with your company there is no incentive for customers to pay. And without sales, you have no business.

2. Is your product addressing a viable market?

Many entrepreneurs fall in love with an idea before confirming that there’s a viable market for it (and one that is large enough to attract capital). Be sure to thoroughly research the market to determine if there is enough opportunity – and room for your business in a competitive market.

3. What differentiates your product from competitors’ products?

What is your competitive advantage?  That can be something as simple as the fact that your business has expanded hours over that of competition.  Or it could be that you have a rich and user friendly website full of information and easy to understand.  Few companies can rely on (let alone afford) expensive marketing schemes to separate themselves from the competition. If you want to win in business, you need to offer something tangibly valuable that the competition doesn’t. Make a list, and compare it to your competitors. How do you stack up?

4. How well are you marketing your product?

Young companies need to get the word out, but doing so can be pricey. For example, don’t do what AOL did:

Years ago, the company spent so much money flooding mailboxes with free trial software that it tried to mask the bleeding by capitalizing those expenses on its balance sheet.

Investigate how your competitors market their product and learn from them.  Then see if you can come up with a way to do what they do better.  Budgeting for marketing can be a real challenge if you’re a small business or a start-up.  Do not compromise your company’s ability to grow because you don’t allocate an appropriate budget for this critical area of your business.  There is no hard-and-fast rule of how much is enough.  If you’re business is not generating enough cash flow to cover its operating “nut” and there’s no money for marketing, you probably are in serious trouble.  Get some professional advice soon.

5. How well are you selling your product?

Dell, for example, bypassed retailers and sold directly to customers with limited tech support. General Motors and Coca Cola rely on distributor to move their cars and cans. Whichever sales method you choose, make sure it aligns with your overall business strategy.

6. Is your business scaling?

Bill Gates plowed piles of money into developing the first copy of Microsoft Office. The beauty of it: Each additional copy of that software program costs next to nothing to produce. That scale is the difference between modest wealth and riches. Models that don’t scale include service businesses, where the need for people grows along with revenues.

7. How are you protecting your intellectual property?

Imagine slaving for years on a new cell phone battery that lasts more than a few days, only to see it reverse engineered and patented by someone else. Before you ask anyone to develop a few prototypes, file for a provisional patent. It protects your idea for a year while you work out the kinks.

8. How are you keeping your employees happy?

What are companies worth without their star employees? Attracting and retaining talent is critical to businesses. One way to start: craft the right benefit package. Take Starbucks, for example: health benefits are available to any Starbucks employee who works at least 20 ho0urs a week and has been with the company for more than 90 days.

9. What are your financial projections?

Keep in mind two critical milestones: the point at which more cash is coming into the business than going out, and the point at which you finally recuperate your cumulative initial investment. Financial projections should be reasonable: Paint too rosy a picture and seasoned investors will run.

10. What is your end game?

Running a business with an eye toward flipping it to a strategic buyer is a lot different than committing to the business for the long-haul. Decide in the beginning whether you want to build a business that, supposedly, will last forever or if you’re looking for a business that will allow you to exit within a fixed number of years in the future.  Knowing the end-game makes a big difference to every decision you make.

What other questions do you consider to be important when trying to maximize your business’ potential?