July 29, 2010

How to Conduct Your Own Business Audit

Last week I headed out for the Sunday morning long run, and my legs decided not to cooperate. After four miles, it was time to pack it in. Bummer—so I tried again a few days ago.

The same thing happened… almost. At mile four I was ready to quit. Through an act of God and the new Josh Ritter album, I managed to pull it out and keep going. At mile six I was feeling great, and as I headed home, I was glad I didn’t quit. Eleven miles for the win!

***

This post is for the entrepreneurs and business-minded ninjas of our community. It’s all about conducting your own business audit—which basically means “looking closely at stuff and making improvements.”

As I transition from active business development to book tour mode, I’ve been taking a close look at how the Unconventional Guides business operates on its own. I want to make sure the store continues to operate well, even without a bunch of big launches and promotions.

I should say first that I’m pretty bad at most optimization or efficiency efforts. I’m just not motivated to revisit things once they’re done. For better or worse, I almost never go back to something I’ve done before. I also believe that it’s better to focus on the future than the past—better to move on and do something new.

This philosophy works… most of the time. But it’s also true that a good business needs nurturing and continuous improvement. I do this for life in general towards the end of the year in the Annual Review series. Now I’m doing a smaller version for my business this summer.

An audit has a few different meanings. In this context, I think of it as: “a thorough review of information.” In my case, I’ve been looking at the following questions in some detail. You may want to answer these yourself, and—even better—take action to create the improvements you identify.

“Where do you make money?”

In any given business, it’s very easy to get trapped into all kinds of things that have nothing to do with making money. The solution to this is simple: focus on the money. True, money isn’t everything, but in a business, the money is pretty important.

In the audit, you’ll want to look at where the money comes from and determine what you can do to keep it coming. Sometimes new opportunities present themselves; sometimes there’s an easy fix you can make to turn on another tap.

Here’s a big hint: if you have a range of projects, products, or activities, it’s almost always better to devote your efforts to the strong performers than to try and pull up the weak ones. Most people do the opposite. If your goal is for everything to be average, that’s the best you’ll ever get.

“How good is your messaging?”

If you do any kind of online marketing, go back to where you started and read the copy (text) carefully. Review each page of the sales material slowly, and then read it out loud. Does it still present the message that you want?

When I started looking through all of my active sales pages and reference material, I found plenty of mistakes. Typos that were missed a year ago were still there on the page. A date I referenced six months ago is now four months in the past. Oh noes!

Then I checked out the multimedia. When I first started making videos, I was terrible at them. One time someone suggested I “do another take” to improve. Little did they know that the published one was Take #11! It really is an acquired skill. I just kept going and putting them out, which is the right approach, but now that I’m better at it, the old ones need to be replaced. I’ve fixed two of them and will redo another couple of them this weekend.

“Are your prices what they should be?”

When was the last time you raised your prices? You can have a sale or give out discount codes from time to time, but like all businesses, you should also plan on raising your prices on a regular basis as well.

The other day on Twitter someone suggested that prices should be “fair to everyone.” Sorry man, but trying to price for everyone is a business death trap. Don’t do it! I aim solidly for the middle of the market by design—no $10 ebooks, but no $2,000 courses either. It works well. Other businesses are set up to compete on either end of the range, and if it works for them, that’s great.

Since entrepreneurs live by the free market system, the way you answer the question of whether your pricing is fair or not is by asking another question: are people buying what you sell? If yes, you’re probably on the right track. If no, you probably have a problem.

“How are you marketing to existing customers?”

One of the best things you can do is reach out to existing customers and find a way to meet more of their needs. Yet despite the fact that most of my customers buy more than one product, I do very little active marketing to them after the sale. Bad move, Chris! I’m fixing it, with improved follow-up messages in my autoresponder campaign and a postcard mailing drive for a third of the customer list.

As part of this examination, you should also carefully check your post-purchase process. What happens after someone buys? Do they get sent to the right place; does everything arrive in their Inbox or physical mailbox as it should? If you sell consulting, do clients know exactly how to set up a time in your schedule? The easier you can make all of these things, the better.

“Are you tracking, monitoring, or testing enough?”

Until recently, I didn’t even have any analytics software installed on UnconventionalGuides.com. Oops—I’ve fixed that. I’m also starting to do some limited advertising, so the tracking will be critical in resolving the age-old advertiser’s dilemma: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Now I’ll know.

The thing about testing is that you just don’t know what’s going to happen until you do it. That’s why you test! A while back I installed an upsell offer where customers could get a $50 gift certificate for only $25 after making a purchase. I thought it was a killer offer, but my customers didn’t think so—it was accepted only one out of twenty times (5%). A good upsell can convert much better than that, so out went the gift certificates offer.

“Where are the big, missing opportunities?”

Earlier this year I recruited a number of affiliate partners for a major Empire Building launch. I remember looking at the sales figures afterward and seeing a few surprises. A couple of people did very well, even with smaller online profiles. When I noticed this, I thought, “It’s a good thing I recruited them!” But then in the ensuing weeks as I processed my daily mail, comments, and Twitter messages, I noticed a number of people that I hadn’t thought of before. If I had asked them to get involved, the launch could have been even better.

Just because you have a big opportunity doesn’t mean you should pursue it. I pass up a lot of things because they aren’t a good fit for my overall strategy. However, it’s good to know what you’re missing, even if you’re deliberately missing it. In my case, I made a list of opportunities I could pursue in my business. Here’s a short version of the list:

  • Add a conference call or webinar series on a specific topic every month
  • Create “side products” consisting of smaller versions of the main products
  • Create an iTunes app with mini-versions of my products
  • Schedule another $100 Business Forum with Pam Slim
  • Arrange more joint ventures to promote the guides
  • Recruit more “high-end” affiliates
  • Create a physical version of the EBK
  • Carefully introduce the regular sale of products on eBay
  • Conduct a “Pay-what-you-will” event for one of the guides
  • Conduct a Silent Auction (or a public auction)
  • Improve the social media identity of the biz
  • Hire a call center to take orders by phone
  • Produce a TV commercial for $100 or less (here’s how)

***

As I said, this is a short version of the list. As to how I evaluate which ideas to pursue at any given time, well, that’s a whole other discussion. In general, though, I follow the “maximalist” approach of trying out a bunch of things all at once and seeing what works the best.

A friend of mine told me recently, “If you love something, you have to protect it.” You could say all kinds of things about that brilliant advice—but in this context, it means that I’ve spent a couple of years constructing a business that supports a good way of life, and I need to take the right steps to protect it. That’s why an audit like this helps.

The Unconventional Guides business won’t ever be huge, but it’s grown much more than I expected when I first sold the first “Discount Airfare Guide” two years ago. I regularly take steps like these to protect it, and to ensure it can thrive even as I travel overseas next week or visit all 50 states this fall. I still have a long way to go in making the project everything I’d like it to be, but I think I’m headed in the right direction.

How about you—will you conduct your own audit? What can you improve?

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Image: Robert

Comment on this article

22 Responses to “How to Conduct Your Own Business Audit”

  1. Chris–thanks for a timely post. I’ve been much more intentional about building my business, and even so, I get sidetracked by the latest “sparkly thing” that looks good or seems like a great thing to pursue–but relative to my present goals, can pull me away from doing the high-value activities. I’m launching a seminar this fall for small biz owners around exactly this idea–of not only having a plan, but USING the plan, checking your progress, re-evaluating, and so on, so reading your perspective and process reinforces how I’m thinking of things.

    Of course, I often find it ironic that the stuff I help others with is often the very same stuff that I myself need to work on! Seems I’m continually learning that which I teach.

  2. Great article… love how focused your stuff is.

    I would say, unless your running a one man shop, a large part of the audit (if not the largest) ought to focused on the fulfillment of those below, above, and around you. I know the president of Zappos sits in a cubicle in the middle of the Zappos headquarters for this very reason. He wants to be viewed as the architect, not the president.

    It’s leadership like this that not only sustains a business but allows it to grow. People spend time investing in things they feel re-invest in them.

    Give. Get. Give.

  3. Thanks for this reminder, Chris. Two things on your audit list on high on my priority list: reworking copy & taking advantage of missed opportunities.

    I feel pretty confident about my sales copy – but at the same time, I feel strongly that 8 months into my current biz strategy, I know how to convert traffic into sales better. I plan to take a hard look at the numbers & at feedback and make the adjustments to my marketing.

    My missed opportunity is affiliate sales. It’s long past time that I get a robust affiliate portal together for my products and actively recruit marketers. It’s first priority after my client work – but I may very well have my assistant start working on it to get the ball rolling.

    Thanks again!

  4. Chris! This is exactly what I needed to read right now. OMG – what a killer post.

    After a springtime of trial and error, I now have some BIG ideas that will make me money AND support “my people”, mom entrepreneurs, in a unique and exciting way.

  5. What a great checklist Chris. If you weren’t going into “book tour mode” you could probably repurpose this post into a product!

    I loved the $100 biz forum so I hope you’ll offer that again. See you in Los Angeles soon!

  6. As above, great reminder! As a coach I do this a lot with my clients; time to walk the talk and do it with my own business. It’s so easy to get caught up in “business is good” and not do the audit – and also so limiting.

  7. I am the pits at things like this. Thank you for reminding me.

    I have started auditing in sort of a backwards way. I created a “Sunday Check In” on my blog to tell my readers what I pan on accomplishing for the week. In part because I am operating a small business that many are interested in, but mostly because I need a list that is public, which motivates me, and constantly reminds me that I need to keep improving. When I fail or forget, I write about it.

  8. This is so timely for me Chris. I recently spent a few days streamlining, upgrading, and basically auditing how my own products were being sold. What I found astonished me. My e-books were being sold in two locations, without an obvious way for potential buyers to navigate between them.

    So I built a new storefront, which allows people to easily access my work. You’d think it’d be obvious, but sometimes these things aren’t. Since I did that my bounce rate dropped by 20%, my sales are up by 30%. Hurray for audits!

    Thanks for all of these amazing ideas, they’ll help a lot of people.

    Everett

  9. I recently reevaluated the way I have people subscribe. I will be upgrading from feedburner to Aweber so I can do more with the people who opt into receiving posts my email.

  10. Hi Chris, I would challenge you and your readers to also consider the following comment: “It worked so well we stopped doing it.” I have found that often business owners find something that works but “get bored” and move on to something else. One of the questions that could be asked is “what worked in the past (realizing you do not like to live in the past) and why are we no longer doing it the way we did in the past.

    All of this to say, “what worked for our business that we stopped doing” and can we get back to what made our business successful in the past and move back into that.

    This is not about developing new product or concepts, it is about protecting your profit stream.

    Love what you are doing especially the travel part.
    John

  11. Hi Chris – Love your straight shootin’ style. I totally believe in ongoing evaluation of my business and love your process. Like someone else commented – it is awesomely focused. I am not much of an auditor at heart but my process combines a bit of “sweat lodge” visioning to keep connected to the “soul” of my business AND a mini intellectual “spring cleaning” session. ;-) I like the simple yet powerful questions you ask yourself to assess what the “best” of your business is and then how to build on it.

    Kristle

  12. Very cool post, Chris. My money comes from my first vocation, which is nursing – I am an RN in an Intensive Care Unit. I spend most of it on my avocation which is dog rescue/adoption. What I try to do is to make things as easy as possible for potential adopters while getting the information I need to ensure a very good home for my dogs. I sent this person a reply with links for each dog. She had her info literally at her fingertips. In her reply, she was ecstatic! And now, I need to follow your audit suggestion so I am clear and consistent both to my adopters as well as my patients.

  13. Thanks for this very timely post! I’ve allowed myself to get sidetracked recently, losing my focus on where it’s at in my business. All these questions that you list are definitely questions I need to be addressing, and right away. It’s always good reading what you have to say.

  14. This is a beautiful post, Chris.

    I wrote a description of the 7 life areas that make up our lives (see the URL field for a direct link to the article), and I identified “money” as the focus of our Professional life area.

    One of my readers emailed me to say that we should really focus on creating value, rather than making money.

    But in business, you should focus on creating value that makes you money. Volunteer work creates value, so does spending time with your kids, and going for a run.

    Besides, there are an infinite number of ways you can create value, and tweaks that can improve the user experience for your customers, but which ones can you afford to do, and which ones should you focus on to make you money?

    Making money your focus doesn’t mean you’re willing to take shortcuts to make money. You can’t make money without offering value. Not for long, anyway.

  15. Thank you for this extremely inspiring post. Especially during summer time, when things tend to be slow it is the best time to focus on one`s strategy. It makes me want to concentrate on my work right away.

  16. In response to your Audit question, I’ve realized that in my efforts to simplify and streamline, I’ve also made it difficult for my clients and potential clients to have direct contact with me. I am re-committing to better customer service that shows more personal attention and concern. Thank you for the kick in the pants!

  17. Quit stealing my great ideas for ways to expand your business ;)

    Great audit and I appreciate how important this is to do,not only after a decent length of time in business but even after just a few months.

    I too am not a big fan of revisiting projects I’ve worked long and hard on to update them but I know people appreciate it when you do, it means you’re keeping on top of things, staying fresh and relevant and adding to your already great bodies of work.

    I wish you all the success for the rest of the year with your major plans – oh and a postcard from the mountains of Slovakia is making its way to World Domination HQ as we speak.

  18. Chris this is really cool.

    I have a question on the video part. Part of what I like about blogs is the archives. I’ve learned TONS from your archive and watching the first video you ever did and seeing how you evolved from that.

    Now when you talk about replacing the videos, I’m assuming you’re talking about on the product end, not re-doing the videos in the archival of AONC.I think it’s reassuring [and a little fun] to see the not-so-polished Chris =)

  19. Correct – Unconventional Guides videos only. For better or worse, most of what I do is not-so-polished!

  20. Usually it’s for better =)

  21. August 2, 2010

    Charlene

    Hi Chris,
    I just found your blog. I like your style, your very honest with us. I just started my online marketing business, but I think it would not hurt me to do an audit of my business. Thank you for the questions.
    The best way to grow is to answer the questions and then take ACTION!!!
    Charlene

  22. Hey Chris,

    Yes, I would love to see you do another $100 Small Business Forum with Pam Slim! I’m really looking forward to it!

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