According to the ATA’s new Retail Business Tracker Survey, retail sales were down 5.24% nationally for the second quarter. Whether you’re dealing with a downturn in sales, an increase in overhead expenses, employee retention problems or something completely different, conducting “The 5 Whys Analysis” can help.
This exercise helps you identify the true reason you went into business, further giving you the motivation to overcome challenges and restructure your business to achieve goals.
If your first thought was, “I went into business to make money, and this exercise seems dumb,” you’re wrong. Hank Yacek, CEO and owner of Point of Impact Range and Retail Consulting, said most business owners go into business to make money, but that’s a superficial reason and that reason alone won’t help you face obstacles or make beneficial business changes.
“Money is a foregone conclusion,” he said. “Everyone needs to make money to put food in the fridge and do the things of life, but what is that true motivating reason that pushed you into owning the business? Challenge yourself to come up with five layers of why and you’ll find the root of it all.”
To complete the analysis, ask yourself “why” five times. Start with the question, “Why did I start my business?” As mentioned above, your initial reason will likely be money, which is why you need to push yourself deeper and be brutally honest with your answers. Here’s an example analysis for reference:
|Level 1||Why did I start my business?||To make money.|
|Level 2||Why is making money important?||I want to retire early.|
|Level 3||Why do I want to retire early?||I want to move to Florida.|
|Level 4||Why do I want to move to Florida?||I want to spend time with my grandkids.|
|Level 5||Why do you want to spend time with your grandkids?||Spending time with my family is what makes me truly happy.|
“The fifth-level why is the real gist of where your motivation will come from,” Yacek said. “It’s what gives you an infinite level of tenacity and encourages you to wake up each day with a positive attitude. It can help you push through difficult circumstances, so you don’t get derailed by short-term issues.”
Once you determine the real reason you went into business, you can use the analysis to ensure your business is set up to help you meet your goals. For example, if you want to spend more time with your grandkids, are you making enough money to achieve an early retirement and a cross-country move? Do you have enough sales and customers to generate funds? Can you work more hours now and cut an employee to offset the salary difference you need? Is your business big enough to support your Level 5 “why”?
“The second piece of the puzzle after determining your personal life goals is to ask if your business is set up to deliver on that,” Yacek said. “You can’t compare and contrast those things if they’re not defined. Your expectations and the ability of your business to deliver on those expectations must be aligned.”
The “why” answers for each person will be different. Therefore, the reason people get up to go to work and how they structure or change their business will be different.
As another example, Yacek recalled a business owner he worked with who was already wealthy from a previous job. He went into business to stay busy and continue to be a business owner. That was his first why. He didn’t need a big salary, so he hired someone to run his business for him. As a result, he spent his time helping customers and engaging with the public. He structured his business to meet his goals, which gave him a bigger desire to work the hours he was on the clock.
Analyze what you're wanting to get out of your business. Photo Credit: ATA
Contrarily, if you want to introduce more people to archery, you might check that you have adequate marketing efforts. Or, if you went into business so you could have a flexible schedule to hunt more often, you’d better be sure that you have enough staff to work while you’re afield. This could mean hiring a general manager who earns an equal or higher salary to yourself, so that you can spend more time away from the business.
This evaluation benefits all business owners, especially those new to business, trying to grow their business or who are in business with multiple owners, because it forces you to structure or restructure the business to succeed in achieving your goals. Yacek said the exercise is extremely valuable for businesses with multiple owners. He encourages each business owner to do the 5 Whys Analysis and then meet with the group to discuss their motivation and goals. Doing so helps them identify individual, overlapping and contradictory goals.
“When multiple business owners communicate their fundamental why’s, they can determine mutual interests and be more aligned,” he said. “You don’t want internal friction to rear its head. When owners understand each other, they can work on their business rather than on their personal conflict.”
The 5 Whys Analysis can help you shift your mindset and adjust your business so you don’t get derailed by short-term issues like internal conflict or a bad sales month. It helps you focus on your happiness and endgame. More importantly, it helps you determine if your current business structure is really built to achieve the goal identified in the fifth level of the exercise. Now is a great time to complete the analysis, make a plan, and share it with other stakeholders in your business to ensure you’re all working together toward a collective goal.
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