Strategic entrepreneurship

9 strategic questions every entrepreneur must ask to succeed

Sven Persoone

Other articles To the content hub
8 Mins
26/04/2024

As an entrepreneur, you are constantly faced with challenges that impact the future of your business. Regularly asking the right, critical questions is crucial for developing a clear business policy and achieving success. In this context, we discuss nine essential questions that you, as an entrepreneur, should ask if you want to increase your chances of success.

1. Is delivering quality goods and services a key focus?

A logical question to start with. Quality is often what distinguishes a company in a saturated market. Striving for high quality in both products and services ensures satisfied customers. Satisfied customers generate fewer complaints, which only benefits the customer-supplier relationship.

Experience shows that satisfied customers also buy more, pay more promptly, and are less inclined to look for alternatives. Let alone switch to a competitor. On the contrary, they are more likely to promote word-of-mouth. These are all elements that are essential for the growth of your business.

2. Does (preventive) debtor management receive enough attention in the entire business process?

With professional debtor management, you keep your cash flow healthy. It is important that you have systems in place to collect payments on time and minimise the risk of non-payment.

Debtor management is also the responsibility of everyone in the company. If everyone is aware of that, it will ensure smooth payments and promote a good relationship between colleagues. Prevention is better than cure. Upstream alert is the message.

3. Is there open communication between the sales and finance departments?

This question is somewhat related to the previous one. Communication between departments is one of the most problematic points within a company. The sales and finance departments often operate independently of each other because they have, at first glance, different goals. Selling is not easy, especially when the economy is down. But that does not mean that you should sell just anything to just anyone. Sales are the basis of a company's survival, but everyone must realise that a sale is only real once the payment has been made. Only then can a company make a profit. You may not be in business for the money, but making a profit is still one of the most important goals of a company.

The collaboration between the sales and finance departments is therefore crucial. Open communication helps align sales strategies with the financial capabilities and goals of the company. And it ensures realistic budgeting and forecasting.

Communication between departments is one of the most problematic points within a company.

4. Are financial decisions (such as different payment terms or discounts) made thoughtfully and based on solid grounds?

Those who think deeply about this will seize all opportunities and not let any revenue slip away. A customer who scores less well will still be able to buy from you, even if that is on a cash basis. The prospect with an excellent financial situation gets a payment term from the first day. Discounts are not given if the profit margin is too low, although exceptions can be made in certain cases. For example, to entice a customer with great potential to make a first order.

Keep in mind that the profitability of sales must always be central. Financial decisions are made based on clear data and analysis. This means that every decision regarding payment terms and discounts must be evaluated for its impact on cash flow and profitability.

5. Do you continuously monitor the financial health of your clients?

A financially healthy company can quickly run into problems if it makes a wrong choice during unexpected shocks (COVID-19 was the best example) or when one of the clients fails to pay. Therefore, it is important to continuously monitor the financial status of your clients. Use internal and external sources for this. It is crucial to identify risks early so that you can adjust payment terms and avoid financial losses.

6. Do you set clear limits for your clients?

Setting limits on the maximum payment term and acting when these are exceeded is necessary to limit the number of write-offs. Setting clear boundaries in customer relationships is thus essential. You have delivered goods or services, and you have the right to proper payment. It's not just about the financial aspect, but also about your own credibility. If you let things slide, you run the risk that the counterparty will not take you seriously over time.

Setting clear boundaries in customer relationships is essential.

7. Have you diversified your sources of income?

The Pareto principle often applies here, where 20% of your clients account for 80% of your turnover. There is nothing wrong with that per se, but it does entail risks. It is therefore important not to be entirely dependent on a single client or market. Diversification helps spread risks and increase the stability of your income.

8. Do you anticipate technological changes (within your sector)?

Technology and the new applications that arise from it are evolving very rapidly. These developments will also have an impact on your business operations. Make sure you are up-to-date with the latest technologies or at least aware of the possibilities. There is no point in running away from them. On the contrary, proactively rolling out new technologies in your business can be crucial to maintaining your competitive position.

9. Do you pay enough attention to customer satisfaction? And what do you do with that information?

If you regularly measure customer satisfaction, you will gain insights into what is going well and what you can improve. Be grateful for that valuable feedback and use the input to optimise processes, products, and services.

Regularly think about these questions and integrate the answers into your business strategy. This will lay the foundation for ongoing success and growth. Each of these questions forces you to critically look at different aspects of your enterprise. They ensure that you not only react to problems but that you are ahead of them.

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