3 Core questions every business owner must answer

Who are you in the business?
There is a fantastic book called “The E Myth” by Michael Gerber that endeavours to deal with this question. He breaks the role of the entrepreneur down into three different categories: entrepreneur, manager and technician. The entrepreneur is the person who started the company and is focused on developing the business and its future. The manager is involved in everyday operations, running the business, planning and achieving results. The technician, however, is responsible for the technical side of the business and for performing the hands-on work for clients or consumers.

Ask yourself, who are you in the business? Are you all of them or are you trying to be a technician and a manager but not focusing on also being an entrepreneur? Or are you a technician who loves doing the work, but needs to invest more time in the management and development of the business?

What business are you in?
This seems like an obvious question but it’s actually not. Understanding what business you’re in isn’t about what product or service your sell, it’s about what need you satisfy. For example, supposing you have a high-end restaurant; you offer food and drinks but really you’re providing your customers with an experience. If you teach dance classes to young children; you’re teaching young people but also providing childcare. A famous example is Starbucks. The CEO, Howard Schultz, knows that his company sells food and drinks, however, he says what they really sell a third space; it’s not your home, it’s not your office, it’s a third space. People know what they’re going to get when they go to Starbucks; a sandwich, some coffee and somewhere they can work.

Understanding these subtle differences can help you make key strategic decisions when developing your business further.
What business are you really in? And what business do you need to be in?

What is the life-cycle of your industry and where are you in the life-cycle?
It’s normal for some industries to exist forever, like hospitality. Whereas, other industries live and die over couple of years/decades – think of an fads that come in and out of popularity. The five stages are: Introduction, Growth, Maturation, Decline and Death. What stage is your industry at? If it’s at the growth stage but your business isn’t doing well, it’s worth trying to figure out how you can improve your sales and marketing. However, if you’re business isn’t doing well and your industry is ageing, then you could be flogging a dead horse. In other words, it’s better to have a solid exit strategy than trying to boost a dying industry.

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