Use “The 5 Whys Analysis” to Achieve Business Goals

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:

“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.