How do you choose what to work on next in your business?

Some business owners go with their gut. Some go with whatever’s most urgent. (I’ve done both)

Unfortunately, going with your gut is inaccurate. And choosing the most urgent problem in front of you means you may never get to what’s most important.

I’m very excited to share with you a simple tool called “The Business Hierarchy of Needs”. It was created by one of my favorite authors, Mike Michalowicz, in his book Fix This Next.

This tool has helped me identify where the problems are in my business, and which ones I should fix next.

Let’s take a look!

The Business Hierarchy of Needs

If you ever took a psychology class, you’ll probably remember Maslow’s Hierarchy of Needs. It’s a pyramid-shaped chart that shows the way that human beings naturally prioritize their needs with the most important and urgent at the bottom.

In Fix This Next, Mike Michalowicz introduces a similar concept called The Business Hierarchy of Needs as a way of identifying what is most important and urgent in your business.

There are five levels to the hierarchy, and each level has 5 corresponding questions about your business.

Your answers to those questions will help you determine whether you have a problem at that level or not.

Once you find out where you have problems, you simply identify the problem that is lowest on the pyramid and work on solving that problem next.

Because of the way that the chart is organized, the lowest problem you’ve identified will naturally be the one that is the most important and urgent to fix.

Let’s take a closer look at the five levels:

1. Sales

   This level helps ensure you’re bringing in cash. It includes questions like “Do you attract enough quality prospects to support your needed sales?” and “Do your clients fully deliver on their commitments to you?”

2. Profit

   The profit level is about making your business stable. You’ll answer questions like “Do you have healthy profit margins for each offering?” and “Does your business have enough cash to cover expenses for 3 months or longer?”

3. Order

   This level is all about efficiency in your business. Questions include “Are people’s roles and responsibilities matched with their talents?” and “Is your business designed to operate unabated when key employees are unavailable?”

4. Impact

   This level is about creating transformation for your clients. It includes questions like “Does your business benefit clients through a transformation beyond the transaction?” and “Are people’s individual dreams aligned with the path of the business’s grand vision?”

5. Legacy

   The Legacy level is about making sure your business goes on without you. It includes questions like “Is there a plan for leadership to transition and stay fresh?” and “Is the business designed to constantly adapt and improve including finding ways to better and best itself?”

This tool has been like a compass for me. For the last two quarters I’ve used this tool as a way to center myself and identify what my priorities should be for the next 3 months.

Next steps

This is just a small taste of what’s inside Mike’s book. If you found any of these concepts compelling, or even intriguing, I highly recommend getting started with the free charts and resources on Mike’s website and buying a copy of Fix This Next.

Let me know if it helps you in the comments below!