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Buying, selling or thinking of setting up a business always do your research, known in the trade as due diligence.
The holy trinity of due diligence is always the customers, the company, and the management.
The fundamental question is there a demand for the service or product? Don’t base it just on hunches or observations. Who are already out there doing it? For very little money Companies House or try Company Check can be a great starting point, it’s amazing what information you can get, even for a small company.
Don’t forget pricing, premium products and services command premium pricing try and pull off anything less will fail. The adage is true “You can’t fool all the people all of the time”.
What is the USP (Unique Selling Proposition) why would somebody want to trade with this business? Recognise it, flaunt it.
The company has to be sound, fit for purpose. There has to be clarity on costs, know the suppliers. Is there sufficient support, think about staff, IP, premises and systems, benchmarking, QA?
Thirdly, the management, no man is an island. The most undervalued asset in any business is the staff. It is often unlikely a person holds all the skills to perform all roles and responsibilities. Identify the key skills and resource.
Whether you are buying selling or setting up a business it always takes longer than first estimates and you can’t forecast for all events.
Covering the bases these are some generic points to be going on with.
|Customer||1. Market Research|
|2. Customers’ Profile|
|3. Competitors’ Profile|
|4. Managing Market Risks|
|6. Promotion and Advertising|
|Company||A. Running the Business|
|2. Key Suppliers|
|4. Managing Operational Risks|
|5. Legal Requirements|
|1. Start-up / Selling Costs|
|2. Breakeven Analysis|
|3. Funding options and Tax incentives|
|4. Cash Flow Forecasting|
|5. 5 Year Plan|
|6. Profit & Loss Account|
|7. Balance Sheet|
|Management||1. Job descriptions|
Key Performance Indicators (KPI) are used by organisations to evaluate success and when you choose KPI’s you should follow the smart approach:
S pecific – a well defined goal that is clearly understood by everyone.
M easurable – can you track your progress towards the goal?
A greed – both employer and employee must agree on what the goals are.
R ealistic – can you achieve the goal with the resources provided?
T ime related – will there be enough time to complete the task?
Here are some examples of E Commerce KPI’s
Sales Key Performance Indicators:
- Hourly, daily, weekly, monthly, quarterly, and annual sales
- Average order size (sometimes called average market basket)
- Average margin
- Conversion rate
- Shopping cart abandonment rate
- New customer orders versus returning customer sales
- Cost of goods sold
- Total available market relative to a retailer’s share of market
- Product affinity (which products are purchased together)
- Product relationship (which products are viewed consecutively)
- Inventory levels
- Competitive pricing
Marketing Key Performance Indicators:
- Site traffic
- Unique visitors versus returning visitors
- Time on site
- Page views per visit
- Traffic source
- Day part monitoring (when site visitors come)
- Newsletter subscribers
- Texting subscribers
- Chat sessions initiated
- Facebook, Twitter, or Pinterest followers or fans
- Pay-per-click traffic volume
- Blog traffic
- Number and quality of product reviews
- Brand or display advertising click-through rates
- Affiliate performance rates
Customer Service Key Performance Indicators:
- Customer service email count
- Customer service phone call count
- Customer service chat count
- Average resolution time
- Concern classification
What do UK Businesses use?
What are your KPI’s and why did you choose them?
Having chosen your KPI’s this clip shows you how to create a dashboard in Excel