10 Essential Questions For Building A Business

It was July 16th, 2011, in the living room of Mark Fisher’s apartment in Astoria, Queens. I took the train from Philadelphia, where I had been living at the time, for our first ever face-to-face meeting about how to grow Mark Fisher Fitness. I showed up with an outline of a business plan and a projector, which felt super fancy at the time. We sat on his couch, probably got stoned, and worked on our business plan until our brains were melted and oozing out of our ears.

After a few more days of work, that basic business plan became our guide for the next year of MFF’s growth. That single document laid the groundwork for the culture and community we were starting to build, guided us in creating our first real website, and helped us get our first commercial lease. Even today, that first business plan accurately represents our ideal vision of MFF’s brand and culture. Pretty cool, right?

How’d you like to see that business plan?

Better yet, I’m going to share with you the 10 most important questions we asked ourselves to build that business plan so you too can create an awesome f*cking business.

Plus, I’ll give you some templates to help you clearly answer those 10 questions effectively.

Get out your notebooks, this is a serious avalanche of knowledge bombs.

Let’s first acknowledge that business plans often get a bad rap. We think of them as useless documents that take a shit-ton of time and energy to create, but don’t serve any meaningful purpose. It’s true that parts of a business plan may become obsolete if your business is growing much faster or slower than forecasted. However, a well-written plan creates the foundation of your business beyond predictions of performance.

Whether you are planning to start a business or have an existing one, this article will be a valuable opportunity to identify the key forces driving your business and ensure you have a clear vision of your path to epic success.

One caveat. This article is a survey, not a deep dive. Each one of these 10 questions is worthy of many articles to dive into the complexity contained therein. My goal with this article is to offer you a framework to create a brilliant business plan, but we won’t be exploring each with much detail.

Without further ado, I give you 10 essential questions to ask yourself when building a business.

(Download my Business Plan Blueprint that gives you additional templates and examples.)

 

1. Why does your business matter?

Seriously, what is your reason for creating this business?

This part of your plan represents the heart and soul of your business, and often includes three sections: mission statement, vision statement, and values. The mission statement is your guiding purpose and serves as your company’s north star. It often starts with the phrase We exist to ____.

The vision statement is your version of what the future looks like when your business succeeds in its mission. It often starts with the phrase We envision a world ____.

Your values are the shared beliefs that give insight to the things that matter most to your business. Values are beliefs we put on a pedestal as ideals, so your values should set the tone for the kind of reputation and culture you want for your business.

 

2. Who is your customer, and what is their problem?

I worked in luxury hospitality for many years. Early in my career I was baffled when hotel guests would complain about the quality of the hotel — the beds weren’t comfortable enough, the room wasn’t clean enough, the lighting wasn’t bright enough (yup, that’s a real one). It didn’t make sense to me. The hotels I worked in were gorgeous, filled with the best quality beds, and furniture, and products I’d ever seen.

One day, I shared my confusion with a senior manager who explained to me that many our guests have nicer things at home. The hotel’s sheets might be 500 thread count, but at home our guests have 1000 thread count. When they leave their comfortable, well-appointed homes, they want an experience that exceeds their everyday lives. Our job is get ahead of their expectations and “wow” them with the quality of our property and our service.

It sound pretty obvious now, but as a young man who grew up in a trailer park in New Jersey, that insight created a giant perspective shift for me. I felt like I better understood where our customers were coming from, could empathize with them, and ultimately serve them better.

Think of this story as you answer this question, who is your ideal customer and what is their problem? Create an avatar of your ideal client. Include demographic (age, gender, location, etc.) and psychographic information (fears, goals, dreams). Then identify what your ideal client’s core problem is that your business will address.

 

3. What is your company’s solution?

This is where you start to define your business products and services. This section is pretty self-explanatory, but here are a few tips. Your products and services should speak directly to the core problem you identified in question number two. If your products and services aren’t solving that problem with your clients, it’s time to go back to the drawing board.

When defining your products and services, consider that each is made up of features and benefits. Both are important, but we often forget the latter. Let’s say you’re selling a fitness boot camp program. The features answer the client question, What’s included? Features might include, 3 classes per week for 6 weeks, unlimited email support, and a detailed nutrition plan.

The benefits answer the client question, What’s in it for me? Benefits build value for your clients emotionally and help the understand how your product or service can impact their life. Benefits of a client doing a fitness boot camp might be that they will feel better in their bodies and have more energy, and they will learn strategies for a positive sustainable relationship with food.

Make sure that when you design your services and products, you include both features and benefits.

 

4. What is the current environment?

When starting or growing a business, you must recognize that you aren’t doing it in a bubble. Both your internal strengths and weaknesses as a team (or solopreneur) and the external opportunities and threats of your environment have a tremendous impact on your ability to succeed.

A business plan is the perfect place to reckon with those realities and devise strategies to leverage the good stuff and overcome the bad stuff. This exercise often takes the form of a S.W.O.T. analysis in your business plan. It’s a simple 2×2 grid (Example here) that answers the questions I posed above — as a business what are your strengths, weaknesses, opportunities, and threats?

When Mark and I first did this analysis, it led us many discoveries and resulted in hiring some of our first employees. We identified two big weaknesses. We didn’t have very strong accounting skills, and Mark was wasting time doing mundane tasks. As a result, we hired an accountant and got Mark a part-time assistant. Boom! With just a little bit of reflection and analysis our business plan quickly became the springboard for meaningful action.

 

5. What makes your company unique?

In the fitness industry it is crucial to stand out from the crowd. Let’s face it, there are literally hundreds of kettlebell studios in New York City offering similar workouts to what we do at MFF. However, there is a ton of shit we do at MFF that is different than all of those other places — our brand, culture, community, training methods, and more. That is why this question is so crucial. As business owners we have to present our businesses in striking contrast to our competition. We have to clearly articulate what makes our company unique, and that thinking starts in your business plan.

This part of your plan is often referred to as your unique value proposition (UVP), and it’s simply a statement about why you’re different. At MFF, we use the motto “Ridiculous Humans. Serious Fitness.” as our UVP because it captures our two greatest assets, our ridiculous personality and our passion for serious results.

If you’re stuck on defining your UVP, start by brainstorming about one of your favorite brands. What makes them unique and how do they communicate that to you? That might help get your wheels turning to more easily define yours.

 

6. Why should people listen to you?

Regardless of the type of business you have, you are positioning yourself as an authority. You are an expert on solving a specific problem for your customers and are asking them to trust you with their time, attention and money. The first question any responsible customer should ask themselves is Why should I listen to you?

How you answer this question in a business plan can take many shapes. You can establish your credibility by including:

  • The education and credentials of you and your team
  • Testimonials from past and current clients
  • Client survey data about their experience working with you
  • Statistics about your effectiveness at solving your client’s core problem

From this point, how you continue will vary based on the stage of growth of your business. Once you’ve established why people should listen to you, then next question is how are you going to speak to them?

For younger businesses you might include some guidelines for defining your brand voice in a way that communicates your credibility. For more mature business, this part of your plan might include some marketing strategies for how you plan to reach your intended audience along with key marketing messages. My best advise is to simply include the information that you think will be most useful to the next year of your growth.

Don’t over-complicate things. The goal is to sketch your path forward, not to chisel it in stone.

 

7. How do you make money?

Can you believe that we made it all the way to question seven before talking about money? That’s not an accident. Particularly for those of you who are just starting your business or are still in the first few years, your level of clarity about the first six questions will be strongly correlated with your ability to make money. Money comes as a result of you being the best at knowing your clients and effectively solving their problems. Once you’re successfully doing that, you’re ready to discuss how to manage your millions and millions of dollars. #Reachforthestars

This is one of those sections I could write about forever. Finance and money management is a vast topic, so I’m going to focus on two of the most simple and effective tools you need: a forecast and a budget. When you are just starting out and growing you can forget all about profit and loss statements, balance sheets, and cash flow statements. You’ll dive into that fancy shit later, just focus a forecast and a budget.

A forecast is like a roadmap, a budget is like a report card. (Examples here)

A forecast is a simple spreadsheet on which you make some educated guesses about your future revenue and expenses. I recommend doing this for at least one year and for as much as the next three years. Along with each educated guess, list your assumptions. If you think you will sell X number of products next year, include a note explaining why you think that’s true. Something like, we currently sell X per month and I think that will increase by 20% next year as we increase our marketing budget.

For a new business, forecasts are simply a wish list of what you hope to accomplish. As your business matures you can make slightly more accurate forecasts based on actual performance data.

A budget is a second simple spreadsheet that divides your forecast into monthly columns so you can track what you planned to spend and earn against what you actually spent and earned. It’s like a report card in the sense that every month you can compare your expectations to reality and adjust accordingly.

The most important factor in considering how your business makes money is to not get overwhelmed. If talking about money stresses you out, just keep it simple.

 

8. What resources do you need?

This question is all about creating a vision of your company into the future. Like a forecast and budget, I recommend listing the resources your business will need for the next 3 years. This is your opportunity to think of all the equipment, supplies, and people you will need to grow your business into the future. Most business plans answer this question by simpling listing the resources they think they will need over time.

At what point will you need to hire more staff? How often do you plan to replace your computers and other technology? If you are a busy fitness facility, how is general wear and tear going to impact your equipment and flooring?

I know this exercise doesn’t sound sexy, but when you take the time to envision your business in the future you are able to anticipate its needs and avoid unnecessary bottlenecks.

 

9. How do you know when you’re successful?

If you had to tell the story of your business’s success with five numbers what would they be? The crucial numbers that define your business are often referred to as key metrics or key performance indicators (KPIs). A great book on this topic is Scaling Up, by Verne Harnish. There is so much to say about this topic, but I think the biggest mistake people make is thinking the health of their business is solely measured by the money in your bank account.

Sure, having money is critical. However, there are much better indicators to tell you if your company is going to be successful before any money is exchanged.

For a fitness business, you might count on a weekly basis the number of visits to your website, the number of emails collected, the number of consultations scheduled and completed, the number of new members created. All of those numbers are leading indicators, meaning that they tell you in advance if you’re sales strategies are working. Once you’ve converted a client, there is a whole other series of metrics to tell you how likely they are to stay — their attendance, their satisfaction, the satisfaction of your trainers and staff.

As you can tell, this topic goes deep. You can slice and dice key metrics a million and one ways. They key is to find about 10 numbers that are leading indicators of your business’s success. Include them on your business plan, then track them weekly to make sure you’re heading in the right direction.

 

10. How do you grow?

What systems, procedures and protocols do you need to scale? What are barriers and roadblocks you can anticipate as you work to grow your business?

Here’s a fun fact. I can say with confidence that nearly all of the challenges we have faced in growing MFF could have been predicted. Not 100%, but most. Mark and I don’t have any magical powers to see into the future, but when you take time to reflect on your business in all of the ways described in this article your challenges become quite clear.

Think of this process like planning a road trip. If you decide to drive from New York to Los Angeles and your plan is to just wing it — taking whatever roads you feel like on any given day — it’s going to be nearly impossible to anticipate the challenges you will face.

However, if you plan your route across country getting clear about what roads you’ll take, what sites you’ll see, and where you’ll sleep at night, then anticipating your challenges gets infinitely easier. You can check road closures and weather forecasts. You can make sure you have enough food and fuel for the drive.

This business plan works the same way. Once you’ve taken time to define your path with questions one through nine, question ten asks you to consider what is going to get in your way?

For this section, make a list of potential barriers to your growth along with growth strategies for overcoming them. At MFF, one of our barriers to growth is finding new trainers. A growth strategy we’ve imposed is to create a trainer-in-residence program. Like an internship, it ensures us that finding talent won’t become a bottleneck to our growth.

________

There you have it — the 10 most important questions to ask yourself when building a business. If you really want to tackle these questions and build (or update) your business plan, go for it!

I strongly recommend completing each question in order. They are designed to build on each other as you work through them, starting with the foundation of mission, vision, values and ending with your roadmap of potential future challenges. Expect any honest effort at building a business plan to take at least three solid days of work — or several weeks if spread out into a few hours each day.

If you are able to clearly articulate your answers to these 10 questions, I am confident that you are well on your way to having a kick-ass business.

Let me know how you do! I’m here to help every step of the way.

Want some extra support in building your business plan?
Check out our consulting options!

 

 

2 thoughts on “10 Essential Questions For Building A Business

  1. Definitely one of your most valuable pieces! Thank you so much guys for all that you do for our industry and for entrepreneurs everywhere. I love following you and hearing the voice of your advice. Have a great weekend!
    Billy

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