Small business strategy question: Where are your business blindspots?

Small business owners can sometimes get too close to their business — so close, in fact, that they struggle to do anything other than focus on the day-to-day operations and fail to work on the big picture strategy. (And many small business owners don’t know how to work on strategy because they are moonlighting or building their business organically from a hobby they have monetized, for example).

So I published a resource called 100 Small Business Strategy Questions. It’s a list of questions that any entrepreneur or small business owner can go through to help them take a deeper look at their business and figure out how to run it more strategically.

After I published that list of questions, I’ve been periodically taking each question and writing a blog post about specific steps or ideas that they the small business owner can use to work through that question.


I love the imagery of a business as a car and the business owner as the driver of that car. It perfectly captures the idea of what a business is all about: Heading toward a destination as safely and efficiently as possible, and making constant small and large adjustments along the way.

Continuing with the car imagery for a moment, is the idea of blindspots — those nasty sections around our car where we simply cannot see. (On most cars, they are typically an invisible triangle that extends out of the back left and right quarterpanels). There are also smaller blindspots elsewhere on some cars, depending on their design: Larger posts between the door and front window are blindspots in some cars. And a lot of cars (until recent design changes) had blindspots around the front and front right quarterpanel. These blindspots can hide hidden dangers that might suddenly leap out to damage your car and keep you from completing your journey.

If your business is like a car and you are like a driver, the idea of blindspots is just as relevant and just as dangerous. Business blindspots are those unexpected things that you simply didn’t see coming.

When driving, smart drivers check their blindspots and anticipate potential dangers based on the driving environment. In business, smart entrepreneurs likewise try to figure out what blindspots there might be and they do something about them. I think it’s impossible to completely and comprehensively handle every possible blindspot but the more you work on identifying your blindspots, the better.

One example of a blindspot is the newspaper industry. Frankly, they didn’t see the web coming and, when it was there, they didn’t realize soon enough the ability it gave people to share quickly and informally. Not surprisingly, the newspaper industry is struggling.

Another example of a blindspot took place in the automotive industry in the 1970’s and 1980’s. The American automotive industry boldly designed gigantic cars with enough sheet metal that you could run a hobby farm in the trunk of your car. In their blindspot was the social changes that took place as a result of the economy and the oil crisis and changing ideas about vehicles and that was enough of a foothold for Asian car manufacturers to enter the market.

Another example of a blindspot is in the finance industry. In the early and mid 2000’s, banks were flush with cash and happy to give out low interest, adjustable rate mortgages with (sometimes) aggressive or unclear marketing. They simply didn’t see what could (and did) end up happening when the rates adjusted and people could suddenly no longer afford their homes. (This wasn’t just a blindspot to the individual players in the finance industry but also to the whole industry and the organizations tha provide oversight).

Another example of a blindspot is with Blackberry. They led the market for years in portable email technology and then smartphone technology. But they became so confident in what they could see that they didn’t see the rise in consumer demand for smartphones, as well as the various functions people were buying phones for. Soon, Blackberrys became “corporate-only” devices… and then uncool altogether.

We see blindspots happening all the time in many industries and companies; and businesses of every size are impacted by blindspots.

But if you can identify as many blindspots as possible and prepare for them, you’ll be prepared.

Permit me one more example, this time from my own business: I was hired on a big contract for a company and it was drawing to a close. I knew there was talk about renewing my contract but that was still up in the air due to several factors. So at first glance, it looked like I would have two options: Either to renew my contract and continue with my client or to not renew my contract and stop working for the client.

But I wanted to be prepared for blindspots. So I sat down one day and tried to think of all of the other possibilities that could happen — including an offer to continue contracting, but at a lower rate, and an offer to become a full-time employee of the company. (There were others as well but those are the two I remember right now). I listed them and gave some thought to my choices and decisions based on all of those possibilities as well. Guess what happened: When it came time to talk about the contract, the first discussion centered around one of the blindspots I had identified! I countered it effectively, but I could only do that because I had prepared. Then the second conversation centered around another blindspot I had identified. Again, I countered it, only because I had prepared.

Blindspots can happen to any business, in any aspect of business, and at any time. The more you can anticipate them, the better.

So how do you anticipate them? Here are some ideas for you:

  1. Create a structure first, just to give yourself something to work with. Two good structures to use (I would use both) is the Business Model Canvas or the sales funnel. My Business Diamond Framework or McKinsey’s 7S model are also good tools to use. You can also mindmap all the different parts of your business (perhaps by activity — sales, marketing, etc.).
  2. Your structure might not be entirely comprehensive but if you pick a couple of these, you’ll have a good starting point. Once you have a structure to work with, think about what you currently do in that section. For example, maybe your marketing consists of activities like “online content”, “blogging”, “social media”, “face-to-face networking”, etc. It might not be easy to list them all but the more you list, the better. Yeah, it’s a big job but if it saves your business then all the better.
  3. Think about what would happen if any of these pieces was suddenly no longer available to you. You can get more specific than that (“what if technology changed so that I couldn’t use this anymore?”; “what if there was a better replacement?”; “what if clients didn’t interact with this anymore?”; etc.) but now you’re starting to think of nearly unlimited possibilities and who has the time for that!?! So start somewhat more generically by just thinking about what would happen if that one particular aspect of your business was something you could no longer do or use.
  4. Another really useful tool is Porter’s Five Forces, a strategic tool created by Harvard Business School professor Michael Porter. The Five Forces are the things that threaten the survival of your business and they include changes in industry competitors, changes in buyers, changes in suppliers, new entrants to the marketplace, and potential substitutes that your buyers might choose. In each case, think about how changes in these factors can impact your business.
  5. Don’t forget to think in the same way at the industry level, as well as the local level. How might your business be affected if your industry was suddenly irrelevant? Or, what would happen if your local marketplace suddenly stopped needing your services?
  6. Confession: I feel like I’m being a bit vague here, but that’s only because there are so many things you could do and sometimes it depends on the business. (And they’re called “blindspots” for a reason. How do you talk about something you don’t know?). But ultimately what you are trying to do is break your mind of the habit of thinking “the current way is the only way” and train yourself to start seeing the possibility of watershed changes that can shatter current systems. You’re trying to see what can’t be seen. It’s hard to imagine specifics but you can think about the possibilities in general and prepare.
  7. Once you have thought about potential blindspots, you can start to prepare. In my experience, preparing for blindspots often means spending more time innovating, diversifying various efforts, seeking more clients and clients in new areas (who might use your product or service in different ways) and trying to stabilize your finances. Obviously this won’t solve every problem but it’s a good start.

Why it’s sometimes good to lose a sale

Your conversion rate is the percentage of prospects that actually buy from you.

So if you have 100 prospects and 10 of them buy from you, your conversion rate is 10%.


But here’s what you do need to know (yet many entrepreneurs don’t know)…

Part of your job as a business owner is to improve your conversion rate. Try to grow that rate by closing more often. Instead of closing 10/1000 customers, try to close 11/100. Then 12. Then 15. Then 20. Etc. This is a smart move because it’s more profitable (and less work!) than just increasing the number of prospects.

It’s important to always push that rate higher. But there is a limit.

There is a point at which your rate is too high. At that point, people are becoming customers in droves (which seems good) but it could hint at something seriously broken right now and something terrible is about to happen in your business.


If your conversion rate climbs and climbs and reaches a point that is too high, it can often suggest one of the following things:

  • That your marketing overpromises the value of the product or service.
  • That you have incorrectly priced your products or services and the value you offer is far greater than the price you’re asking. Note: The value you offer should be higher than the price you’re asking but if it’s too high then you might end up with too many customers — and possibly too many unprofitable customers.


A too-high conversion rate means bad things are about to happen in your business:

  • Perhaps you will end up with a customer service issue if you overpromised something in your marketing and after your customers purchased your product or service they discover that it doesn’t do what it’s supposed to do.
  • Perhaps you will end up with a cash flow issue as you dump all of your revenue into growing your infrastructure to handle the influx of customers.
  • Perhaps you will end up with a big stockpile of inventory if your conversion rate is a spike that decreases as quickly as it increases.

(On a related note, this is one of the reasons why many new businesses fail: They get customers but don’t have the cash flow or infrastructure set up to handle those customers).

With conversion rates that are too high, you’ll end up with dissatisfied staff, dissatisfied vendors, dissatisfied customers, balance sheet problems, income statement problems, cash flow problems, procedural/infrastructure problems, and more.


Your conversion rate should start low and grow steadily. It should grow with your business as you improve your skill set and infrastructure, and as you staff up. You can test your ability to handle more customers (in smaller spikes) as you try out new marketing methods or selling methods or technology.

In other words, your conversion rate should steadily improve through intentional scaling rather than as a wild and unpredictable growth


There is another reason I haven’t mentioned: As your business grows and your conversion rate climbs, you should be worried if you start closing nearly every sale.


Because you learn just as much — or more — from the customers you don’t serve as the customers you do serve. The ones you don’t serve will tell you why they didn’t buy (sometimes you have to ask) and you should listen. If enough of them are asking for something that you can deliver, you can offer products or services to serve them.

If many are looking for a cheaper price, consider establishing a budget-friendlier service you can offer them (or a layaway plan or something like that). If many are super-users and your product or service is for the average user, consider a higher-pried, higher-functionality version of whatever you’re selling.

Just recently, one of my subscribers at an email newsletter unsubscribed. He was kind enough to email me why. Turns out, he’s not in my target market. We’ve had a great conversation since and he’s become a good contact I will rely on in the future. He’s just one guy. But if more of my subscribers (or UNsubscribers!) tell me the same thing then I’ll need to adjust my newsletter to match their request. I plan on using a survey shortly to see if there are others who are like that first subscriber. If so, it’s an easy fix!


So I haven’t yet answered some questions and you’re probably wondering about the answers: “What’s the right conversion rate for my business?”, “What rate is too high?”, and “How fast is too fast for a conversion rate to climb?”

You’re going to hate my answer but the answer is: “I don’t know.” Conversion rate ratios and speed are going to be different for every business. It depends on a million factors including your business model, and what infrastructure you have in place, and your relationship with customers and vendors and staff, and your own personal ability to deliver (or manage staff) while scaling up.

But here are some tips to help you find the right conversion rate for your business:

  • See if you can get access to average conversion rates in your industry. Those numbers won’t be perfect but they are a start.
  • Know your current conversion rate (many businesses don’t know what their conversion rate is) and use it as a baseline.
  • Figure out what factors will increase your conversion rate. (It usually has to do with the marketing and sales efforts in your sales funnel but sometimes other factors like the time of year will impact it too). Then do your best to master those factors — either by systematizing them or predicting them in your sales funnel.
  • Ask yourself how you would handle the growth in customers if you intentionally increased your conversion rate to 5%, 10%, 25%, 50%, and even 100%. How would your business handle it? What changes would you need to make throughout your sales funnel? Build checklists and flowcharts to help you be intentional.
  • Build contingency plans to handle unexpected spikes in your business. Start with figuring out WHY the spike is occurring and then plan how you would scale up quickly to handle the sudden burst. (There are lots of things you can do: Staff up quickly, have technology researched and ready-to-implement, discount prices for delayed delivery, set up a waiting list, etc.

What’s your kick-ass plan?

Aaron Hoos Kick Ass Plan
It’s the time of year when we are knee-deep in planning what we want to do for the rest of the year. Stop smoking, lose weight, start eating more cookies, whatever.

Planning is good but by the end of January, there’s a good chance that most of those plans fall apart under the pressure of reality (which is why a lot of year-round gym membership-holders avoid the gym in January to let all the enthusiastic people join and then leave).

Plans don’t always work because their main ingredients are hope and luck. If you want to eliminate hope and luck, try developing a kick-ass plan.


  1. A kick-ass plan starts with a goal and the steps to achieve that goal but if you stop there, you’ve only done what a lot of people do. You’ll do okay (better than if you just create a goal and no steps) but I’m about to show you a way to take your goal-setting up a notch!
  2. Next, you need to plus your goal. (Add something to your goal to make it really special — to increase its value and importance). Adjust your steps as necessary.
  3. For each step in your plan, identify your capabilities and requirements. Then determine what strengths you have to succeed and what weaknesses you have that could hold you back. Mitigate those weaknesses through investments in automation… or see if there is someone in your network who can help you. (Try tweeting out to your network that you need help in some specific thing and watch what happens. What a great way to see just how much value your network places in you.)
  4. Determine how to start strong. For some of you (especially this time of year), this won’t be a problem. But for some, there might be issues of procrastination or feelings of overwhelmedness that need to be conquered first. Figure out if anything is going to hold you back from starting and then figure out how to jam down on the accelerator very early in the project.
  5. Starting is good but what you really want to is attain critical mass quickly. This gives your project some life of its own because you see success. Figure out how you define critical mass for your particular project and how you can get there as soon as possible.
  6. Next, look for opportunities to maintain momentum. Project inertia ensures that you keep plugging away regardless of the peaks and valleys that you might experience along the way. (Confession: This is another area I’m working on. It’s easy for me to slow down or even stop when the middle-of-the-project doldrums hit). I need to build little motivations into my projects to keep me going. Sometimes it’s as simple as taking a break or rewarding myself with a trip to Starbucks if I get complete a certain number of steps.
  7. Determine your finishing alternatives. We all want to achieve a project well but often that “winning finish” isn’t well defined. We need to define it clearly.
  8. A winning finish is idea… but it doesn’t always happen. We also need to consider some potential contingencies. You don’t need to go overboard here (or else you’ll end up over-planning and you’ll never get to your project) but you can do a simple A-B-C-D contingency planning: (A) is the ideal finish. (B) is a moderate finish in which some of the winning finish characteristics are present and some are not. (C) is a finish but not something you would define as a win. (D) is if the project doesn’t finish. You’re not grading the project, you’re anticipating what could happen to cause these four potential scenarios and deciding what you can do to make sure an idea finish is the most likely outcome. (For more thoughts on contingency planning, read about a time when I accidentally stabbed myself).
  9. If you’re already busy, you’ll need to also do this: Figure out what you’re willing to give up to make it happen. (Note: this is a HUGE area of struggle for me and something I’ve been trying to work on in my own business. I love to do a lot but I’ve started to realize in the past year or two that if I adopt something new, I need to give up something else).
  10. Figure out what habits need to change in order to succeed. Do you need to be more diligent so you can blog every day? Do you need to stop procrastinating? Do you need to screw up your courage to make more sales calls? Maybe you need to get desperate!
  11. Lastly, become an action figure and blaze forward by doing what needs to be done!. (More on that in this blog post: The entrepreneur’s silver bullet).

If you’ve got this far in my blog, you’re probably thinking to yourself: “Isn’t this insanely time consuming? Is Aaron crazy?”

The answer is yes… to both questions (although there’s nothing I can do about the second question so I’ll just address the first question).

This IS time consuming. But it works. It turns your luck-and-hope plans into real, actionable, achievable kick-ass plans.

Besides, you’ll spend far more time working part-way through your plan and fizzling out than you will if you put in some time in advance to go through these steps. An investment of time at the beginning to develop a kick-ass plan will help your project be more successful, and will help you to achieve it faster and with fewer challenges.

4 solutions to the 6 invisible problems of success

In yesterday’s blog post, 6 invisible problems of success: Why sales funnel overload is a bad thing for your business, I listed 6 problems that you will face in your business if your business becomes an overnight success. In today’s blog post, I’m going to talk about how to avoid these invisible problems.

In short, the problems discussed yesterday were all related to one issue: Becoming so busy trying to sell and deliver your products or services to a larger-than-expected group of people that you completely ignore the rest of your business. The spike in business seems good at first but it’s a short-term bonus that will keep you from focusing on long-term growth… and that is not good. It can even ruin your business.

Here are four ways to make sure your business survives those unexpected spikes.


The first way to keep your business stable (and to keep you from becoming overwhelmed) is to know your business really well. Constantly take your business apart and put it back together again. Know your numbers. How many people do you typically see in each stage of your sales funnel? On average, how much do your newly converted customers buy from you? How much time do contacts take to progress through each stage of your funnel?

Knowing these numbers allows you to see what’s going on in your business at a glance. When your Audience contacts suddenly spike, and if you know that it takes 2 weeks to move someone from the Audience stage to the customer stage, and if you know your ratios, you’ll have a pretty good idea of what will happen to your business two weeks before it happens.

(Note: Don’t just pay attention to the Audience stage. A spike can happen at any point in your business. For example, an endorsement from a respected business leader can suddenly help you convert more Prospects. So you can still be surprised, but knowing your numbers can help lessen the surprise.)


Building systems in your business not only helps you to manage your sales funnel from a distance, it also helps to even out those potentially business-killing spikes in business. Automated systems can include email capture and autoresponders, drop-shipping services, outsourced marketing, and outsourced customer service, just to name a few. Make it a goal to create automated systems for every step of your sales funnel in every stage of your sales funnel. You might not be able to automate EVERY step, but the more you do, the better.

By creating and implementing these systems, you can take a step back from the extreme hands-on, day-to-day marketing and sales requirements so that you can spend more time on load-leveling and problem-solving activities: When your marketing and sales activities are chugging along without your time-sucking attention, you can pour more of your valuable resources into dealing with those sudden spikes when they happen, and you’ll be confident that the rest of your business will continue growing with your minimal attention.


Using your new-found knowledge of your business, and your shiny new business systems, build flex and warning signals into your business.

Flex in your business gives you a bit of a cushion just in case business grows faster than you can manage. An example of a place where flex is helpful is your autoresponder: If you’re currently paying to send out 10,000 emails a week to your list, and you have a list of 9,500, you have a cushion of 500 names. That might be fine. But if you get a huge spike in business and 1,000 people sign up, you might find yourself scrambling to pay for more autoresponder space to meet your growing need. Instead, you should be looking ahead of time at what your options are – how much does another 1,000 emails cost. Or, are there dead emails that can be cleaned up instead.

You don’t want too much flex because you may end up with a lot of unused infrastructure. But some flex is good. Inventory is a good place to build some flex.

Warning signals are specific milestones and actions you need to take as a result. First, list some specific milestone in your business (for example, a 15% increase in the number of contacts in a stage or a 10% improvement in a stage-to-stage ratio). Then, write down what actions you can take as a result (for example, increase inventory by 10% or increase prices by 5%).


How many times can I beat this drum? Haha. Contingency plans will save your ass again and again. Create lots of contingency plans for the most likely problems you’ll face. List them and figure out how to solve them.

Many of your contingency plans will be started by the flex and the warning signals I just talked about. But it goes beyond that. You should be building relationships with vendors so that they’ll step up and help you if you find yourself in a jam. You should consider the possibility of sending customers to your competitor if you find yourself completely overwhelmed and unable to meet everyone’s needs.


Okay, I’ve given you some specific ideas for your business. Now it’s time to start working on them. Get to know your numbers, explore some systems options, think about how you can create some flex in your business, and then develop contingency plans. It takes some preparatory work but when your business picks up, you’ll be glad you did it.

I accidentally stabbed myself today. Here’s why you should be worried…

Next week, a company will be working in my basement to chip away part of the concrete and to replumb our downstairs bathroom (we’re moving the toilet and adding a shower) and to add a sump pit.

So to get ready for the plumbing contractors, I tore down my basement bathroom: The sink and toilet came out, the walls came down, etc. Unfortunately, in the process, I was cutting away drywall and the drywall knife slipped and sliced across my wrist. There was blood. Fortunately, it wasn’t as bad as it could have been (a quick-thinking, first-aid-trained wife and some bandages did the trick) but I came SO close to a very serious injury… or perhaps worse.


I get a lot of business ideas from the things that happen in my life (like when a freak downpour flooded my basement last year), and this is no different: I started to think about being out of commission for a while (or permanently) and how that would affect my clients. It made me think about succession planning and contingency planning. If you’re a regular reader of my blog, you know that I’m a big believer in contingency plans.

As a business owner, I want my clients to rely entirely on me and to find me so invaluable that they couldn’t imagine anyone else helping them — it’s in my business’ best interest to be perceived that way by my clients. But if I want to be truly helpful, I would be wise to have a contingency plan in place for each client.

As well, my clients would be wise to have a back-up plan, just in case. The back-up plan doesn’t have to include having someone else on retainer just in case I can’t help out. That’s expensive for the client. But the back-up plan should include knowing where to find the right solution provider should the need arise.

If the knife had cut deeper today, what would my clients do to replace me? Would they feel like they were starting from scratch to find another service provider or would they be able to move forward quickly and easily? (Selfishly, I want to be missed. As a professional, I want them to be able to pick up where I left off with very little impact to them.)


What happens if one of your service providers or vendors suddenly disappeared? How long would it take you to replace them? At what cost?

Make a list of all of your service providers and vendors. Then list either a couple of replacements or a place to find more service providers. Don’t get lazy and write “the phone book” or “the internet”. Do some legwork and find a few qualified service providers and vendors who can meet your needs.

Once you’ve done that, think about what information you need to provide those professionals in order to seamlessly switch over to them should the need arise. If possible, collect that information altogether and keep it in a safe place… sort of a “in case of emergency, break glass” kind of place. Schedule time regularly (quarterly? Maybe every 6 months?) to check this information and ensure that it is up to date.


There are some risks to this: It does take time; and if you have a great relationship with your current service provider, it can seem a little unfaithful. But it’s the right thing to do for your business so they should appreciate that.

Schedule time to get prepared!


I occasionally encounter other situations in life that teach me business lessons. You might want to read about business lessons learned from when I vacationed in London England, when I travelled to Minneapolis recently with my wife, when I got terrible service from a local furnace and air conditioning company, and when I witnessed a car accident.