Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps to Assess a Business

“Strategy is not just a plan, not just an idea; it is a way of life for a company. Strategy doesn’t just position a firm in its external landscape; it defines what a firm will be.” Cynthia A. Montgomery

As a business owner one needs to continually assess one’s own company as well as those of the competition. It is essential to have the ability to look at the larger picture and see what is working, and what is not. If you are younger start-up company looking to raise money, or attract potential team members, you need to have well thought out answers to key questions which will be asked. Listed below are five key questions which I believe every business owner must be able to answer.

1. Why does your organization exist?: To answer this question, one needs to have clear understanding of the problem the organization is wanting to solve and how it plans to do that. The answer needs an opening sentence which has the ability to get the other person interested instantly, and wanting to know more about the business. To read more about answering this question please click here.

2. What is your competitive edge?: This question requires you to identify three main components, customer needs, competitor capabilities and your own organizational capabilities. This will help to clearly identify the space your organization is going to be operating in, and your customer value proposition. To read more about the answering this question please click here.

3. What is your business model?: In essence this question is asking how your business makes money. The answer to this question requires you to clearly pin point your target market, financial estimates, scalability and originality. All assumptions and forecasts used in the answer must be based on extensive research. Investors see far too many hockey stick projections, without substantial evidence of how and why demand will pick up to reach those estimates. To read more about answering this question please click here.

4. How do you acquire customers?: The answer to this question is all about your marketing strategy.  Clearly outline metrics used to measure performance, market positioning and price point strategies. These objectives and strategies need to be translated into executable tactics through your promotional campaigns. Avoid using generic answers when answering this question and focus on key metrics you  want to achieve, and how. To read more about answering this question please click here.

5. Who is on your team?: This question requires you to tell the assessor the business plans for execution. The answer to this question is I believe, by far the most important aspect of assessing a business. One needs to mention the teams past experience, achievements, leadership examples and responsibilities. Highlight strengths and how they will be used to help reach your target goals. To read more about answering this question please click here.

One needs to have the answers to these questions, always prepared. They require much initial hard work and research,  the benefits however, far outweigh the time spent on them. One needs to remember to be clear, concise and confident when answering these question. It is all about passion for the business and the industry one operates in. This passion must be conveyed when talking about one’s organization. In the end if the story makes sense, numbers are fairly correct and you have managed to assemble a talented team, success is closer than you think.

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Who is on your team?

“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don’t play together, the club won’t be worth a dime.” Babe Ruth

The success of any startup depends on the quality of the team executing the plans. It comes down to having a team who complements each others strengths and weaknesses, has the ability to work cohesively together and most importantly, has the same core beliefs and values. To communicate this to a potential investor or assessor of the business, requires a deep understanding of oneself and one’s team mates. A clear segmentation of the roles each person will be playing and why that particular person has been chosen for that role is essential.

The answer to this question should include reference to the following:

1. Experience: The first things which needs to be established is the team’s past experience and achievements. This will assist an understanding of where they are coming from and whether they have the required understanding of the market and skill set they will be responsible for. Wherever possible, support your answer with specific details including return on investments (ROI), market share growth, sales figure or any industry rewards and recognition achieved. Past tangible results need to be highlighted.

2. Leadership: This point needs to be stressed to showcase  possession of the necessary skills to lead and motivate a team. Highlight experience, responsibility and motivational skills from the past. Forward looking investors need to know whether an individual has the ability to motivate a team during hard times, and push them further when things are going well.

3. Roles & Responsibilities: From the very beginning there should be clear allocation of responsibilities. Even though at the beginning everyone has to wear multiple hats, it is important that they are responsible for the part of the business where their strongest skill set is used.

The points mentioned above highlight some key areas to develop answers around. Ultimately, investors invest in teams, not business ideas. Use this opportunity to promote your team as much as possible. Be clear, concise and focus on results and tangible evidence of the team’s great ability to work well together.

Related Articles:

Steps to create a winning team

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