No matter where you are in your ownership journey, you must create a business strategy.
Your strategy should do more than state your desire to grow and run a profitable enterprise. You need a plan with steps, necessary actions, and recognizable milestones that will help you use what you learn—and what you know—to find your way to success.
This article will help you get started.
What is a strategy?
A business strategy is a plan owners and managers follow to help their businesses achieve important goals. Strategies usually evolve as new opportunities and threats emerge—and as new competitive advantages are attained. But through their iterations, they keep leaders focused on the actions they must take to help their businesses excel.
Why do I need one?
A carefully crafted plan can help you position your business for success, help you find your footing, and keep the most important goals you have for your business front of mind.
But, without research or planning, it's easy to make decisions that will run your business off course.
For instance, you might pursue customers ineffectively or target markets that don’t align with your long-term goals.
You may also miss out on opportunities to rethink your product or service packages, marketing messages, or other critical parts of your business to connect with your audience and their needs.
In almost every instance, business owners and managers benefit in measurable ways from a business strategy.
How do I find the time to create a business strategy?
It can take a lot of time to develop a strategy, and time is a luxury many business owners feel they can’t afford. However, strategy creation is one of the most important investments of time you can make for your business.
If you find it difficult to make time to prioritize long-term goals over your business’s short-term needs, you’re not alone. Many business owners feel this way, allowing today’s workload to take precedence over brainstorming for tomorrow’s success.
But, it’s important to recognize that strategic planning can help you save time. With a clear strategy, you can focus your efforts right where they need to be. Then, you can drop many of the extraneous tasks that are sapping your time, resources, and energy.
How can I get started?
The following steps can help you create a business strategy:
Step 1: Know your business
Start by evaluating what your business is today and how you’d like to see it evolve to serve your customers and market in the coming years.
This step will require you to think about your business identity, which is a product of four distinct points:
Think about the following questions as you form your plan:
- What do I want my business to be for people who use my products or services and prospects and others who consider solutions like mine?
- What do customers value in businesses like mine?
- Which qualities would assure my target customers that my business could solve their problem?
- How can I play up my business’s strengths to achieve my vision of success?
- How can I navigate around its weaknesses to grow the business?
- What metric can I use to determine whether I’ve reached my target level of success?
- Hint: This may be a sales number, customer count, sales to a new market, or another important metric.
Each of these questions can help you think about how you want to develop your business identity to win over and retain your customer base.
Step 2: Understand your market
Once you have a firm understanding of what your business is today and what you can see it being in the future, take the next step. Define who you're targeting, evaluate the size and strength of your markets, and understand the competitive forces that are in play.
Start by defining your targets. Who do you want to reach with your messaging, products, and services? Your answer can help you focus your energy and resources on the markets that can drive your success.
Next, consider your market. How many people buy products like yours? What do they have in common? Use surveys, published studies, and, if applicable, information from your city’s municipal offices to study demographic factors such as age groups, income levels, and other qualifiers that will help you home in on your target group of buyers and determine whether they have—and are willing to spend—the disposable income they have on a solution like yours.
Interested in tools that can help you understand your market? The following sites may help:
- The United States Census Bureau offers market tools and free reports that can help you size up your market and gain insight into their demographics.
- U.S. Small Business Administration Office of Entrepreneurship Education provides reports that will help you understand customer factors, economic indicators, and production factors that may impact supply and demand in your market.
- Pew Research Center shares public opinion polls, demographic research, and other social science research that will help you boost your market intelligence.
- Statista offers charts and infographics that will help you spot trends and opportunities in your market.
Then, research your competitors. Find out who offers similar or alternate solutions to your target customer base, and read reviews to learn how those solutions are being received by their customers. As you work through this step, try to discern why the best businesses in your field are loved by their customer base.
Other research is important in this step, too. Try to answer the following questions as you attempt to understand your market:
- Is it easy for new businesses to enter this market?
- How simple or difficult would it be for businesses in adjacent industries to add product or service lines and enter this market?
- What new technologies, apps, or innovations could alter the competitive landscape?
Step 3: Look forward
Changes are taking place in every market. It’s as important as ever to plan for certainties, probabilities, and possibilities that could impact your business, industry, and customer base. On a yearly, quarterly, and monthly basis, you should be looking ahead and deciding how you should position your business to thrive through change.
Many owners use SWOT analysis in their strategy meetings. SWOT stands for strengths, weaknesses, opportunities, and threats. Here's how:
- First, they name their strengths. Then, they imagine how they can amplify their strengths today and as changes take place.
- Next, they name their weaknesses and form plans for them. Often, their objective is to counter their weaknesses with new training, tools, or personnel so those weaknesses won’t impede their successes.
- Then, they look outward for opportunities. These might include partnering with a firm that can help them expand their capacity and reach, attending events that will help them get in front of their target market, or piggybacking off developing technologies to reach new markets or enhance their performance.
- Finally, they name the looming threats in their business or industry. These can include disruption from new or existing competitors, the introduction of technologies that undermine the need for products or services you offer, economic downturns, or a host of other factors.
At the same time, owners often construct financial projections to assess how various factors could impact their sales, revenues, and income over the long term. Before tackling this step, you may want to work with your CFO or contract with a fractional CFO who can help you build these forecasts for an affordable, per-hour rate.
Would you like to connect with a fractional CFO? Take a look at a few of our favorite firms:
Projectionhub is another great service that can help you take on the projection piece of your plan. This service offers 50+ industry-specific templates expertly prepared by a CPA for as little as $49. And, for a limited time, you can save up to 15% on this service with the code OWNERACTIONS (some restrictions apply; contact Projectionhub for details).
Step 4: Organize your thoughts
After working through the previous steps, you’ll have lots of information you can use to form your business strategy. Use it to find the objectives that matter to your business. Decide how and where you’ll invest your time, energy, and resources to help your business grow and thrive. Then, plan how you’ll adapt when certain events occur (or fail to occur).
Put your plan down on paper. Write out your objectives and the steps you'll take. Then, assign dates to them and name who will oversee them. In doing so, you'll create a playbook that prepares you for challenges and positions you for long-term success.
Struggling with this step? Consider working with a small business consultant. You can find a free consultant at SCORE.org, or for more hands-on help, you might consider connecting with a fee-based consultant who specializes in small business strategy.
You could also download a popular strategy template to help you work through the process quickly and easily. Here are a few business owner favorites:
- Miro offers a free template that is easy to develop and allows for sharing and collaboration.
- Asana has a free template that helps owners translate their strategies into actionable goals.
- Pipefy shares a free template you can use to develop and execute a comprehensive strategy.
Step 5: Execute your plan
With your plan in place, you can begin implementing it. Here are some strategies to help you succeed:
- Share your vision with others in your business so you can rally together to see it through.
- Assign ownership—and accountability—of certain sets of goals.
- Connect incentives to achieving the goals you’ve defined. You might offer bonuses, time off, or promotions for work that helps the business align with its strategy.
- Gamify the work you and your employees take on. Some owners do this by creating a scorecard that helps them visualize their progress toward goals and meaningful rewards.
- Recognize that you may need to recalibrate your plan as changes occur in your market and customer base and among your pool of competitors.
- Revisit your plan regularly to ensure it continues to be valid and important for your business.
By allowing these elements to serve as your roadmap, you can form a plan that will help your business find its footing in your market, grow, and become the brand of choice for your target customers.
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