Happy Holidays (gift for you enclosed)

It’s that time of year again—ho ho, jingle jingle, and merry merry!

So today, I’m going to give you a present (hey, it’s the holidays, right?).

Before I explain what the gift is, I want to ask you a few questions.

·         How healthy is your business?

·         What do you need to work on?

·         Which parts are working well?

These are important questions to ask yourself from time to time. Why? Because we often get so involved in working on the day-to-day operations of our businesses, that we forget to look at the big picture. And knowing your big picture is crucial to keeping your business on an even keel.

And that’s what my gift is all about. It’s a new tool I’ve developed—my Small Business Health Check. It’s an exercise that will help you gauge the overall health of your business model in just a few minutes. That knowledge can help you grow your business faster, because it will help you understand what you are doing right, and what areas you need to be paying more attention to.

This week, we’ll do parts 1, 2, and 3 of this exercise. In these parts, you will analyze your own business and score yourself. Next week, we’ll analyze your results, and give you some pointers for moving forward.

Here we go!

Instructions

1. Print this article out and complete it with a pen or pencil.

2. You will be asked to score yourself on the 5 main components of a business model. Score yourself from 0–10, with 0 meaning your business is at the absolute beginning stage, and 10 meaning it is at the fully developed stage. Guides for each component are provided below to help you decide what score to choose.

3. If you have more than one business, or more than one main part of your business, do this exercise separately for each business/part.

Step 1: Review of the 5 components of a business model

In this exercise, you will be rating yourself on the 5 main components of your own business model. As a reminder of what these are, here is a quick recap.

Value Proposition - How well can you explain why people should buy from you? This is part of your sales pitch, and should include why people need your product, why they should buy it from you and not your competitors, why they should buy it now, etc. 

Market Segments - How well do you know your ideal target customers? How do they describe the problems they are having (the problems that you have the answer to!). What words do they use? What are they feeling? What do they want to make sure happens, and what do they want to avoid.

Revenue Model - How do you make money? What are the main gears in your “system” for earning income? Where do you find your customers? How do you deliver your service? What type of clients do you work with?

Value Chain - How efficiently does your business run? What are all the little details of how your complete “system” works? How do you make sure you reduce costs? Who does what, when, how?

Growth Strategy - How have you planned to ensure future growth? Will you add new products/services? Will you hire staff? Will you reach new markets? Will you reach more clients in your current market?

Step 2: Score your business

Now, rate yourself using the guides below. The guides give you descriptions of what might be a 0, 5, or 10, for you to use as benchmarks, but use any number from 0-10 that fits where you feel your business scores.

Step 3:  Charting your scores

Now that you have your scores for each of the 5 business components, plot them on the following chart by placing a dot or an x corresponding to your score on each of the vertical lines.

That’s it for this week. Next week we’ll pick up on this topic and start analyzing your score.

Until then,

Tim

Helping you engineer the business of you

Information in this article is for general information and is not intended as professional advice.