Recently, I posted a list of 100 Small Business Strategy questions that every entrepreneur should ask themselves from time to time. The very first two questions of the list are…
- What does your business do?
- What does your business sell?
Those questions are related yet different, and you need to answer them at the same time.
Answering the question “What does your business do?” is describing why people buy from you.
Answering the question “What does your business sell?” is describing what they’re actually getting when they hand over your money.
The product or service they get (which answers your second question) should deliver the benefits they expect (which answers your first question).
The key is being able to articulate who you serve and what problems you solve or needs you fulfill and then how you deliver that solution to your customers.
Create a list to answer each of the questions. In general, your answers to the first question should be different than your answers to the second question, and your list of answers to the first question should be longer than your list of answers to the second question.
Not all of your products or services will necessarily achieve all of the things in the list of your first answer, but collectively they will all provide those things.
EXAMPLES OF THE DIFFERENCE BETWEEN THESE TWO QUESTIONS
Here are some examples. I’m going to show you first what the business sells (the answer to the second question) and then I’m going to show you what the business does (the answer to the first question).
A financial advisor sells portfolio management services. But what they do is provide advice, and a filter for crazy investing ideas, and access to the stock market.
A house painting company sells a paint-your-house service. But what they do is provide convenience, professional experience, time-saving and effort-saving value, high quality paint, and fast application to busy homeowners who don’t want to paint their house themselves.
A bookstore sells books. But what they do is provide an escape, a place to curate all the best books that a book-lover should read, advice and suggestions on reading, and a few minutes of peace and quiet in a fast-paced world.
WHAT HAPPENS IF YOU STRUGGLE WITH FINDING AN ANSWER
The answer to the second question is easy. We all know what we sell. The answer to the first question is much harder because we don’t always know what our business does (or how it’s different from what we sell). This is especially true if you sort of “fell” into your business or inherited from someone else or bought a franchise.
So if you are struggling to answer the question “What does my business do?”, try doing the following:
- Try listing the benefits of your product or service. It doesn’t always give you a complete answer but it’s a good start.
- Think about when people buy from you. What was the situation that inspired them to come looking for you?
- Ask the question “Why do people buy from me?” and “What value do I offer?”
- Ask your previous customers to tell you why they bought from you. Look at testimonials for hints, as well.
- Examine your most successful marketing campaigns (or, if you’ve just started your business, examine your competitor’s marketing campaigns) to see what kind of language drove people to buy. What was promised?
- Use a search engine keyword tool to find what your target market is searching for. (People will sometimes search for the name of the product or service they want, but many people will also search for the solution to their problem… and THAT is the answer you’re looking for.
WHAT TO DO WITH THE ANSWERS
Figuring out what your business does is essential to growing your business.
You’ll write a clearer business plan and increase the likelihood of finding investors because your business will be clearly articulated.
You’ll create more effective marketing campaigns because you’ll be focused on the reason your customers are likely to buy from you.
You’ll even discover new ways to make more money. For example, you can look at the answers to your first questions and figure out ways that you can provide the same benefits with new products or services. That’s why financial advisors often also sell other things besides strictly buying and selling investments for their clients – they also sell insurance or mortgage products, too.
Answering the questions “What does your business do?” and “What does your business sell?” are the first and most important questions any business owner should be able to answer.