9 Of Forbes' 20 Most Important Questions In Business

Forbes.com just released a very interesting article headlined "The 20 Most Important Questions In Business." It's great that they shared this with the rest of us. There are many budding entrepreneurs all over the world. Even employees can benefit from learning how overall business strategy will help them continue to have employment.

Basically it mentions how we don't really have all the answers. But the key to success in business is to ask the right questions. Studies estimate that just two-thirds of all start-ups survive the first two years, and less than half make it to the fourth.

Here are some highlights of the article about the question entrepreneurs have to answer in order to keep their businesses afloat. This is basically the shorter version of the article with some of my comments on the side:

What is your value proposition?

Without a need, there is no incentive for customers to pay. And without sales, you have no business. Period.

What differentiates your product from the competitors'?

If you want to win in business, you need to offer something tangibly valuable that the competition doesn't.

How much cash do you need to survive the early years?

Three words: Mind the cash.

What are your strengths?

Figure out what you're good at and stick to it. Don't go chasing red balloons

How big is the threat of new entrants?

The trick: building a loyal following before new competition steps in for a share of your market.

How much power do your suppliers have?

Basic rule of thumb: The fewer the number of suppliers, the more sway they have.

Does the business scale?

Think service businesses, where the need for people grows along with revenues.

What price will your customers pay?

Get this answer wrong and you could leave bags of money on the table--or worse, send customers running into the arms of the competition. Do your homework before you start selling

How committed are you to making this happen?

Fair warning: If you want to run the show, get ready to give everything--and then some.

More Readers Putting Down Newspaper To Visit Websites

The Audit Bureau of Circulations reports that American newspaper circulations declined by 3% over the spring and summer, reflecting how readers are shifting to the Internet for news.



Web readership on the other hand has climbed. What does this mean for major newspapers? An overall business strategy to move from print circulation to the online medium. Executives noted that newspaper Web sites — unlike their print counterparts — drew a lot of young adults, who are sought by advertisers. But advertisers have generally not considered an online reader to be as valuable as a print reader, so it remains to be seen what effect the numbers will have.

If we let economics run its course, the internet has definitely overtaken the print industry. More of almost every market is located online. This doesn't mean though that print will die. Whereas the web is virtual, print is still tangible and since it still has an edge in terms of seniority, I doubt print will go away but business-wise. Management should start thinking about exploring the online medium vs. the long trusted print industry. This shows that the better business strategy for now would be for major newspapers to start beefing up their online portfolios.

Marketing And Finance Cease Fire (Part 2 - 4 Steps To A Resolution)

Finance, while always aiming for top line is also much concerned about the bottom line as well as close measurement of returns on each type of spending. This then manifests in their desire to make sure that marketing is bridled and audited to properly show returns. This is where the marketing's planned projection comes in (also termed marketing budget, marketing plan). It will be a little more complicated and will necessitate the following characteristics:

1. Reflect core business perspectives - The requirement of each marketing campaign must align with the business itself. Branding will go hand in hand with lead generation efforts or the campaign is merely marketing faux - a feeble imitation of a campaign that will only ruin user experience (confuse prospects and mislead potential clients) as the company's overall brand is inconsistent with the marketing efforts. If you're company wants to be the classy chick in the bar then allocate time, budget, effort and marketing design that suits this image.
   Marketing communication to Finance: Align marketing spend with expected incoming revenues. Where possible, equate spend as a percentage/ portion of what is to be expected. Quantify in dollars generated the multiple effects of one campaign. How many additional leads will this campaign generate as a spill over? How much more revenue will it make in this related revenue stream?


2. Consider timing - Revenue generating campaigns in marketing aren't instant success stories. More often they have a cumulative effect that will be seen over a period of time.
   Marketing communication to Finance: Commit to metrics that can quantify success or failure. Apply IRR (Internal Rate of Returns) calculations to arrive at expected long term revenues in the context of current performance. Where possible use Finance jargon as well - they'll appreciate that too.
   
3. Don't put all your eggs in one basket - avoid allocating the entire budget to one or two marketing efforts. Although it is wiser to specialize and perfect one campaign than to launch a dozen mediocre ones, take the opportunity to explore and test other activities. These will serve as fall-back mechanisms should campaign efforts be hindered by technical issues or natural calamities that may be beyond your control.
   Marketing communication to Finance: This is a tough one as finance by the very nature of that function will always require returns on any allocated spend amount. In this case, commit to returns on any test campaign - even if it is just enough to break even with the cost. Never commit to making a profit from it though. Keep the spending to a minimum at all times. And when possible, assimilate the cost into existing marketing efforts.
   
4. Be realistic - Market research is vital to any campaign. From the point of product or campaign development (so called marketing reconnaissance), to tracking and monitoring campaign performance (this might also be termed the point of auditing). Marketing efforts and projections are more solid when grounded on baseline data. The results or revenues expected should be proportional to the allocated marketing budget as illustrated by data that has (at the very least) already been achieved.
   Marketing communication to Finance: This will be a conservative projection, but it will be real. Finance professionals are more likely to lean towards conservativism. Marketing spend is not just an activity that takes place in the present, it is an investment in the future. The revenues will not come back at once, but over a period of time as explained in point #1 - timing considerations.

Finance will be able to understand the metrics when it is properly presented. Finance after all is the mother of all mathematics in any given company. However onus is still on marketing to relay the adequate key performance indicators (KPI's) of each campaign as well as the management information to fuel the continued support.

In sum, marketing campaigns have an overriding effect. It can impact various audiences and create elements that will generate a spill over towards other goals (such as brand awareness) and other revenue generating streams. But this will occur over time and not instantaneously. Finance will need some help to understand that.

Oftentimes, Marketing and finance don't see eye to eye because of the nature of their functions. But that doesn't mean they can't get along. The key here is communication. Even if it means marketing will have to speak the terms of finance in order to relay the need of the campaigns and finance will have to understand some marketing concepts in order to understand and be able to justify spend - the knowledge transfer will be worth the effort.