If you are contemplating starting a new business it will pay dividends to ask yourself these 5 very important questions before making any business decisions: Who, what, where, when, why and how. These 5 questions are known as the 5WH formula and apply to every business decision you will ever make. To help you understand the basic application of these questions and how they can help probe issues for answers a few examples are offered below:
WHO is going to be responsible for starting the business, registering the name and making sure it is in legal compliance with local, state and federal authorities
WHAT form of operation will your business take? (Sole proprietor, partnership, corporation, etc).
WHERE will your business be located? Why?
WHEN will these activities be started and completed?
WHY have you chosen this location over all others?
HOW will these tasks get done and who will do them?
You can also take any area of business like management, marketing, accounting, advertising, sales, finance, law and apply the same technology. Take sales for example:
WHO is going to be responsible for making sales?
WHAT kinds of products or services will you be selling? What is the best way to make sales?
WHERE is the market and who are your target customers? Why?
WHEN will selling activities begin?
WHY is this selling strategy superior over all others?
HOW will sales be made, orders taken and processed for maximum customer service?
And this can be broken down further:
WHO will be responsible for sales materials and literature? Who will produce them?
WHAT kinds of information do we need to provide our customers with our sales literature? What is the competition doing?
WHERE is the competition located and where are their customers?
WHEN will the sales materials be ready?
WHY will they increase the chance for successful selling? Why do your customers need this particular information?
HOW will sales materials be distributed to potential customers?
The key to using the 5WH formula is the steady application of questioning each and every thought you have running through your mind about you business. If you haven’t asked (an answered) the 5WH questions honestly for each area of your business plan, sub plans, and sub-sub plans, then you are setting yourself up for unanticipated problems and chaos. The 5WH formula can be used for infinity–meaning that plans can be broken down into goals, which can be broken down into task and tasks can be broken down into steps. The 5WH formula is as important on the big plan-questions as it is to the small-step questions.
The 5WH formula is a key to good management from the top down and the bottom up.
To your success!
Do you like this tip? You haven’t seen anything yet! Check out our Smart Books Business products by clicking the link below. We have business kits, books and ebooks to help you get smart-fast. Check us out…. We’ll save you a TON of time and money.