When you’re running a business, it’s vitally important for you to know and understand that business: what it is, what it can do, and why people like it. It sounds basic, but as your business grows it’s easy to lose track of these key details.
Today we’re taking a look at some of the ways you can get to know your business so you’re best equipped to make those important decisions.
What Do You Offer?
The first thing it’s important to understand is yourself: what are you offering the public? This isn’t just a list of your products or services, it’s an understanding of what makes you stand out: what’s your unique value proposition? What is your brand doing that makes customers choose you over the alternatives?
Understanding this fully could require expert analysis. Market research can tell you what your customers value about your business, and what makes it attractive to them. If you have a different idea to your customers about why they’re coming to you, it’s possible your decisions will undermine your attractiveness to your current market and they’ll drift away. The lure of your own offer is an important factor to understand.
What Can You Do?
It’s also important to understand your business capacity and for many reasons. There are lots of ways to define your capacity – as a general term, it’s the maximum output level of your business, but how this applies to you depends on what your business is. For simple retail and service businesses, it’s relatively easy to calculate: How much you can sell from one shop, how many haircuts you can perform or meals you can serve.
The more complicated your business, the harder it is to work out your capacity, but it remains an answer that’s well worth the time and cost of finding. Knowing what you can do lets you make all sorts of other important decisions.
If you know the maximum amount your company can sustain, you can judge when your employees are being comfortably stretched and when they’re being pushed towards burnout – and avoid it. It also helps you plan your responses to competitor movement : you know exactly what resources you can bring to bear on the situation.
It’s also an important factor to consider when you’re planning growth. There are, in the most abstracted sense, two ways to grow your business: increase your capacity or increase your footfall.
If you’re thinking about expanding but you’re not currently anywhere near your maximum business capacity then you would benefit from more customers: your logistics can serve more people and therefore deliver more revenue without either pushing your staff beyond endurance or negatively impacting the customer experience. This means more and better marketing, new products and sales.
If you’re regularly running at the ceiling of your business capacity, you don’t need to add more customers immediately: you need to expand that capacity. That means staffing up, moving to bigger premises or opening whole new branches – while also ensuring your supply lines are equally expanded to cope with the increased demand!