Aaron Hoos

Many small businesses are fueled by passion. They start because an entrepreneur has an idea (or is sick of working for a boss), they grow because their ideas solve a problem and somehow that solution is communicated to the marketplace.

Unfortunately, many small businesses fail… even ones that are seemingly successful and make profitable sales. The reason is, they’re simply existing day-by-day, sale-by-sale, without any real strategy or long-term vision to give their existence any direction.

If you’re an entrepreneur, answer these 100 small business strategy questions. The answers will help you to highlight areas of opportunity that you can exploit and areas of concern that you can mitigate. Bookmark this page and come back to it regularly to work through these questions every 3 to 6 months.

With your answers, create a list of to-dos that you can act on until you come back to these questions again.

1. What does your business do?
2. What does your business sell?
3. What does your business stand for?
4. What parts of your brand truly reflect your current business?
5. What parts of your brand do not (or no longer) reflect your current business?
6. What are the top 10 benefits your business provides?
7. Who is your perfect customer?
8. How are you adding value?
9. What are your products’ or services’ biggest flaws?
10. How do you define a lead?
11. Where are your leads coming from?
12. What demographic are your leads?
13. How are you creating leads?
14. How are your competitors creating leads?
15. How will lead creation change for your industry in the future?
16. How do you define a prospect?
17. What is your lead-to-prospect ratio?
18. What demographic are your prospects?
19. How is your prospect demographic different from your leads demographic?
20. How are you turning leads into prospects?
21. How are your competitors turning leads into prospects?
22. What objections do your prospects have?
23. What objections do you NOT have an answer for?
24. How do you define a customer?
25. What is your prospect-to-customer ratio (close rate)?
26. What demographic are your customers?
27. How is your customer demographic different from your prospect demographic?
28. How are you converting prospects into customers?
29. How are your competitors converting prospects into customers?
30. What has caused you to lose a sale?
31. How do you define an evangelist?
32. What is your customer-to-evangelist ratio?
33. What is your evangelist demographic?
34. How is your evangelist demographic different from your customer demographic?
35. How is your relationship with your customers?
36. What were your 3 most successful marketing campaigns?
37. What were your 3 least successful marketing campaigns?
38. What marketing and sales activities are you using in each stage of your sales funnel?
39. How do you measure company-wide success?
40. How do you measure personal and/or employee success?
41. How are you improving your relationship with your customers?
42. How can you improve the process for receiving and acting on feedback from customers?
43. How are you encouraging repeat sales?
44. How are you encouraging upsells?
45. Who else can use your products or services that you aren’t currently serving?
46. What is your business model?
47. What other peer-businesses use the same business model?
48. What can you learn from peer-businesses that use the same business model?
49. What other businesses (in other industries) use a similar business model?
50. What can you learn from businesses in other industries that use a similar business model?
51. Who are your top 3 competitors?
52. Who/what are your indirect competitors?
53. What does the most successful businesses in your industry do that you don’t do yet?
54. Why would someone buy from you instead of your competition?
55. When should someone buy from your competition instead of you?
56. What are your competitors doing differently?
57. What are your competitors doing better than you?
58. What are your competitors doing worse than you?
59. How are your relationships with your suppliers/vendors?
60. How can your supplier/vendor relationships be improved?
61. What does your organizational chart look like and what strengths/weaknesses are the result?
62. What are the next 3 roles you need to hire for?
63. What was the last thing you tested in your business?
64. When was the last time you tested a price change and what were the results?
65. What political changes do you see affecting your business/industry?
66. What economic changes do you see affecting your business/industry?
67. What social changes do you see affecting your business/industry?
68. What technological changes do you see affecting your business/industry?
69. What financial best practices have you implemented?
70. How have buying habits changed in your industry?
71. What trends are influencing buying habits?
72. How will buying habits change in the future?
73. How has your industry innovated in the past decade?
74. How has your business innovated in the past year?
75. Where does your business plan to innovate this coming year?
76. How are you investing in your business’ growth (i.e. innovation, new equipment, etc.)?
77. What is your plan to scale up your business?
78. If you had to get rid of 90% of your customers, what 10% would you keep?
79. If you kept 10% of your most profitable customers, what would that demographic look like?
80. How can you increase your ideal customer base?
81. How can you decrease your less-than-ideal customer base?
82. Where are people talking about your business online?
83. What are people saying about your business online?
84. What is your plan if your industry suddenly received a lot of bad press?
85. What is your plan if your business suddenly received a lot of bad press?
86. What is your plan if your marketing went viral and you suddenly had 10x the customers?
87. What contingency plans do you a have in place for natural disasters?
88. What would happen to your business if you were unable to work?
89. What has changed about your business since you started?
90. How has your income trended since you started?
91. How has your profit margin trended since you started?
92. What plans do you have to increase income next year?
93. What plans do you have to increase profits next year?
94. Where do you see your business in 1 year?
95. Where do you see your business in 5 years?
96. Where do you see your business in 10 years?
97. What strengths/assets can you leverage for growth?
98. Where are your blindspots?
99. What are the top 3 problems keeping you from advancing to the next level in business?
100. What about your business, industry, or customers keeps you awake at night?

It’s St. Patrick’s Day today — it’s a day where we celebrate the luck of the Irish (even though St. Patrick himself didn’t care that much about luck).

I’m not a big believer in luck. I think chance and circumstance deal us a hand of poker and it’s up to us to play the hand, regardless of what we’re dealt. As in poker, real success comes in playing what you’re dealt rather than relying on luck to help you win. Some people call this “making your own luck”. I think luck is simply the timely use of your skills/abilities/strengths to act on an opportunity, and to receive a significant reward for it.

Here’s a 3-step plan to make your own luck.

STEP 1: BUILD A PLATFORM

To be lucky (successful) you need to have an area to be successful in. (Even lottery winners might be considered “lucky” but they are only lucky in one area — money). Do you want to gain fame in something? You need a personal brand and the infrastructure (i.e. maybe a website) to launch with. For businesses, a sales funnel is key here.

STEP 2: CREATE CRITICAL MASS

Once you have your platform in place, you need to have some substance behind it. I call this “critical mass”. Think of it this way: If you want to be a famous blogger, are you going to do it with only a week’s worth of blogs? Probably not. If you want to be a famous actor, are you going to do it with a portfolio that only lists one local production of “Little House on the Prairie”? No. You need to have a volume of experience backing you up. It doesn’t have to be a huge amount but it needs to demonstrate that you have the chops.

STEP 3: LEVERAGE

Now it’s time to take this stuff and run with it. Create a plan to start promoting yourself and leverage the critical mass you’ve developed on your platform. I think this is the biggest area where people fall short. They are willing to do some of the work but they don’t think of doing enough. You need to be relentless. Take your inspiration from the most successful people — they’ll all tell you about their many failures on their way to success. (How many times did Michael Crichton or John Grisham or J.K. Rowlings get rejected before becoming hugely successful authors?)

When developing your plan to leverage, think big: Think sustained campaigns in some areas and massive, focused blitzes in others. To use an internet marketing example, maintain a consistent social media campaign but also aim to become the most prolific guest blogger ever. Or, maintain a solid press release publishing campaign but dominate a couple of forums in your particular niche.

NOW IT’S YOUR TURN

Luck doesn’t exist. Success comes to those who take the cards that were dealt by chance and plays them to perfection. Now it’s your turn to make your own luck! In the comments below, let us know what area you want to become “lucky” in…

Most financial and real estate professionals perform a service for their clients (for example: investing in stocks, selling life insurance, searching for a home to buy, or listing a home to sell). This is “active income” because it requires you to be present and spend some of your time and talent to deliver the service.

Unfortunately, you only have 24 hours in a day so there is a potential cap on the amount of money you can make by providing services to clients. And in some cases, if you have multiple service offerings (as is the case of a financial advisor who also sells insurance, for example), you can end up overloaded with so much service-offering that you don’t have time to grow your business any more.

That’s where the passive income model comes in and it can help you to grow your income and it can give you a little more freedom to reduce your face-to-face time with clients, if you want. I also like the idea of passive income for financial and real estate clients because these industries can be boom/bust industries so passive income provides another revenue stream to help smooth out the peaks and valleys.

WHAT IS PASSIVE INCOME?

Passive income is another type of business model. It’s a revenue stream where you don’t have to spend the time delivering a service. Instead, you sell something else that is complementary to the services you deliver (I’ll tell you some of the options later in this blog post).

For that reason, there is less of a “cap” on your income potential because whether you sell one or one hundred, you still spend the same amount of time.

The name “passive income” is a bit of a misnomer because there is still work involved. (Side note: If you look around the web at passive income possibilities, you are going to find a lot of opportunities that requires some effort even if they promise no effort at all, and you are going to find a lot of failed entrepreneurs who didn’t realize that their passive income required some effort to be successful). Some of the work involved might include marketing and advertising, emailing, accounting, and team management.

But don’t get scared off! What makes passive income so attractive is that you can put in some effort but get a much larger, ongoing result than you would by working one-on-one with clients.

You can continue working one-on-one with clients but the passive income part of your business allows you to generate additional revenue and grow your business to the point where you can dial back on some of your face-to-face time-intensive services.

PASSIVE INCOME OPPORTUNITIES

For financial and real estate professionals, there are many different passive income opportunities. Here are a few that are popular:

• Sell a book
• Sell a digital download product (like an ebook or software, etc.), sell advertising space on a popular blog, or promote other people’s products or services (this is an “affiliate model”)
• Manage a staff of junior partners (who pay you a percentage of their sales)

These are some possibilities that I’m really excited about and have seen many of my clients succeed with. (Plus the following two blog posts give you some ideas to turn your existing financial or real estate business into a more passive income business: How to be a lazy serial entrepreneur part 1 and How to be a lazy entrepreneur part 2).

HOW TO GET STARTED IN PASSIVE INCOME

• Look at your own skills and weaknesses. That can tell you a lot about what you’re likely interested in promoting. If you have a weakness in the business that you’ve overcome, an ebook on that topic might be good. If you have a weakness that you haven’t overcome, don’t focus your efforts on creating a passive income stream around that. If you have a strength in a particular area, spend your efforts on that. (Case in point: I don’t love managing other people so my passive income streams are going to be focused on things I can do. It’s not likely that I’m going to build up a huge staff of people unless I can get an Operations Manager involved very early).
• List the problems that your clients come to you with already and find ways to solve those problems… for example, by writing something (a book or an ebook) or by promoting someone else’s services (as an affiliate).
• Look at your systems and processes. Is there something you do well that makes you so successful? Perhaps it can be developed into a product.
• Look around to see what other competitors are doing and add your unique twist to it. (Note: I’m not recommending that you steal the content or the idea!!! But if you see a real estate agent who is selling an ebook on how to prepare a home to be listed, and you have a better way to do it, you should write your own ebook on the topic.
• Here’s a blog post about how to develop products that are complementary to the services you already provide.
• Click through Amazon and see what popular books are for sale in your category. Do you have any insight that you can share on one of those topics? Even if you don’t have enough for an entire book, perhaps you have enough for an ebook.
• Send me an email. If you’re at a total loss, I’m happy to help with some free email-based consulting to give you some ideas and get you on the right path.

WHAT’S NEXT

It never hurts to broaden your options. Make it a goal in the next few months to create one more income stream. It doesn’t have to be big, comprehensive, or perfect. But get something together and put it out there and build from there. In the short term, you won’t retire from a flood of unexpected cash. But it will give you more credibility and more opportunity.

In a previous blog post entitled There are only 3 ways to grow your business, I listed the 3 types of business-growth strategies that entrepreneurs can consider, and within each of those strategies I listed specific methods to follow through on that business growth strategy.

The first business growth strategy is to replicate your sales funnel. I wrote: “This can be achieved by (1) hiring employees and managing them, (2) franchising your business, or (3) creating an affiliate program. Financial and real estate businesses may find that the first choice (hiring people to help support your practice) is the easiest and clearest option. The other two choices aren’t unheard of in financial and real estate businesses but can be a little more complicated in these highly regulated industries.”

When you build a business, you create a sales funnel. At first, it’s just you doing all the marketing and sales. Over time, though, you can get other people to do some (or all) of that work for you. It just comes down to who you want to get to do the work, what you’ll get them to do, and how the “structure” of your relationship functions.

WHO DOES THE WORK

You can hire employees to do the work for you, you can sell your business model to others, or you can pay a small portion of all sales to the affiliates who referred customers to you.

WHAT YOU’LL GET THEM TO DO

You can piece out all or parts of your sales funnel, depending on the relationship. An employee might be hired because they specialize in a specific aspect of the sales funnel – administration, marketing, sales, whatever. In a franchise model, you pretty much sell your entire sales funnel concept to someone else. And in an affiliate model, they (generally) do the marketing and you (generally) do the sales. (Of course, there are some unique exceptions to these models but I’m speaking in broad terms here).

HOW THE STRUCTURE OF YOUR RELATIONSHIP FUNCTIONS

Each of these methods are structured differently:

• With the employee method, you’re probably going to work closely with them, perhaps holding their hand earlier in the process and (preferably) giving them more responsibility while minimizing your oversight. You pay them an ongoing, pre-specified amount of money and you can expect to get a certain amount of effort or hours in return.
• With a franchise method, you hand over your sales funnel and best practices and receive payment. In some cases, you might also receive ongoing royalties in exchange for providing ongoing support (including marketing and administration support). Depending on the franchise agreement, there is a fair amount of autonomy and unless the franchisee really screws up and bashes your brand, they can do whatever they want.
• With an affiliate method, you can set the parameters of how much you want to pay and what you will allow the affiliate to do. Some affiliates will just drive traffic with a link; others will post their own advertisement or sales page that drives traffic directly to your checkout. You decide what you want to do and what you’ll allow (or disallow).

THE BENEFITS AND DRAWBACKS OF EACH METHOD

Each method comes with its own positive and negative aspects.

• Employee method: This is a good method because it allows you to retain control of the entire process. However, it’s very hands-on (especially in the beginning) and you do incur some additional responsibilities like payroll expenses and management headaches, although you can mitigate some of those concerns through outsourcing.
• Franchise method: This is a good method because it usually means an up-front cash-infusion and you can decide how much continuing focus you need to give to franchisees. However, there is quite a bit of autonomy here so (depending on what you sell) a franchisee can do considerable damage to your brand and reputation.
• Affiliate method: This is a good method because it requires the least amount of up-front work from you and (with the right affiliate) can bring in a considerable amount of revenue. However, you need to spell out very early what your affiliate is and is not allowed to do in order to maintain control over the sale and not disappoint customers. As well, there is a lot of competition for the most effective affiliates so you may end up eating into your profit quite considerably (but some is better than none!).

HOW TO GROW YOUR FINANCIAL OR REAL ESTATE BUSINESS WITH THIS MODEL

A lot of financial and real estate professionals use the employee method and the affiliate method to grow their practices:

• Employee method: Financial advisors and real estate agents will hire an administrative assistant to help them manage the administration of their sales funnel. Later, they may hire a marketing assistant (or outsource their marketing to someone like me). They might also get junior associates to work with them to do some of the legwork, such as research, due diligence, initial customer set-ups, and more.
• Affiliate method: I see this a lot in the real estate industry and I see it used sparingly in the financial industry. Real estate agents will offer some kind of incentive to someone when they refer a customer to them. And, real estate investors use “bird dogs” to find potential investments – and a bird dog is usually an affiliate-style relationship where the bird dog is paid per investment referral. It’s used occasionally in the financial industry among financial advisors (at least in the circle I run in).

The franchise method is also used sometimes, especially at a business level where a brokerage house “franchises” its sales funnel and brand name to individual agents.

STEP-BY-STEP TO GET STARTED

The first thing you need to do is solidify your sales funnel. Regardless of which of the three ways of growing your business with this sales-funnel-replication strategy, you need to have your sales funnel well-defined and nailed down. Doing this will help you to “piece it out” to the employee/franchisee/affiliate. If you don’t nail it down effectively, your employees won’t know what to do, your franchisee will feel like they’ve been ripped off, and your affiliate won’t know how to sell effectively. There are a number of tools on my blog to help you nail down your sales funnel effectively. You might want to start by reading some sales funnel blog posts and downloading my Sales Funnel Quick Reference Guide and Sales Funnel Worksheet.

The next thing you need to do is decide which of the three types of sales-funnel-replication methods you want to choose. Each one has its own opportunities and challenges (which I’ve briefly discussed, above). Deciding which one really comes down to one question: How much return do you want to derive from this effort compared to how much time/attention/energy do you have to give. (There are other considerations, of course, but I think they tend to all feed into this particular question). Obviously, regulatory considerations might be a factor, too.
Start small. You don’t have to jump in with both feet right away. Start small.

If you are going to use the employee method, you don’t have to start by hiring an employee. Test the waters by outsourcing. Go talk to my friends at ContemporaryVA to outsource your administrative assistance or get in touch with me to outsource your marketing. Start small and, if it works and you want to bring it in-house, you can. But by then you have some idea of what works and what doesn’t.

• If you are going to use the franchise method, partner up with someone who is interested in getting started in the biz and wants to try it out. Let them know that your goal is to franchise and work with them to figure out what works and what doesn’t. In a sense, they’re getting in on the ground floor of your franchising effort by providing feedback and a testing ground instead of initial payment.
• If you are going to use the affiliate method, set up a referral reward system and let your customers know about it. Test out a few different ideas and see what works. Then go talk to your peers in related industries about the reward of referrals. (For example if you are an investment advisor, go talk to accountants and estate lawyers). Later, you can investigate software that can help you offer affiliate rewards on a larger, automated scale.

Lastly, test and refine, test and refine, test and refine, test and refine.

Every entrepreneur wants to grow their business and they drink from the deep well of marketing and sales advice to help them. But let’s get one thing clear: All of those marketing- and sales-related tips and ideas and techniques and tricks can contribute to business growth, but there are really only 3 ways that your business can actually grow.

Here they are, in no particular order:

• Replicate your sales funnel: This can be achieved by (1) hiring employees and managing them, (2) franchising your business, or (3) creating an affiliate program. Financial and real estate businesses may find that the first choice (hiring people to help support your practice) is the easiest and clearest option. The other two choices aren’t unheard of in financial and real estate businesses but can be a little more complicated in these highly regulated industries.




• Create passive income: This is achieved by creating products (instead of services) that people can buy and receive without any ongoing effort from you. (An ebook is a classic example of this business model). For some ways to help figure out how to turn your active, time-intensive business into a passive one, check out How to be a lazy serial entrepreneur (part 1) and How to be a lazy serial entrepreneur (part 2).




• Increase some aspect of the purchase: This can be achieved by increasing (1) the number of customers who buy from you at any given time, (2) how much volume you sell per customer, or (3) how much money you earn from each customer. These options are pretty straightforward to implement but their true success can be limited by some factors (such as the amount of time you have in a day to spend with each customer). For ideas on achieving all three methods of increasing some aspect of the purchase, check out this blog post on how to find the best customers in your sales funnel and earn more profit from them.

So, which should you choose? There’s no reason why you can’t select all three options and continually work at implementing them all, over time. But it also depends on who you are and how you like to operate. Each of these options requires something different from you. The first option — replicating your sales funnel — requires some administrative and management skill. The second option — passive income — can be quite profitable but requires a (sometimes considerable) up-front investment of time and money. The third option — increasing some aspect of the purchase — is probably the easiest and fastest to implement but its effects can be dampened by the time you have and whatever the market can bear.

Start by working on whichever option is easiest for you to implement based on who you are and what strengths you have. Then build off of those wins and select another option to grow some more.

Over the next few days, I’ll blog about some additional ideas and tips to help you work through each of these three options.