How to Conduct Your Own Business Audit
Originally posted July 29, 2010.
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?
Photo by fauxels