Strategy is Not Just For Big Companies
As a business owner, do you usually cringe and shy away from anyone who says "strategy" because you think it is for big companies and is not essential to you? The terms' business strategy or strategic planning' seems to conjure up a picture of a sizeable overwhelming task that many business owners think is unnecessary. Many believe that a strategy is something consultants do for large businesses that generate a lot of paper and sit in the drawer. This belief is not the case at all. Every business must have a strategy that they work against to take their business forward. This is even more important for small businesses with fewer resources and funds than their corporate counterparts.
Understanding Strategic Planning and Business Planning Link
A good portion of our business is working with business owners who are looking for investment or financing for their business and require a business plan. In many cases, these are new businesses. Most do not understand that a business plan is the implementation plan of your business strategy, and that must come first. Suppose you have not defined your target market, your business direction, your brand, your competitors, what sales you need to make, what marketing you need to generate sales, or how many employees you need. If that is the case, it is impossible to write a business plan for that business.
Many consulting firms generate a lot of paper that can confuse a business owner, but that is not what a strategic plan is. Your business strategy is how you will achieve your business and personal goals related to your business. In two words, it is your game plan. Your business strategy is the map you provide your team to know the 'what,' 'how,' 'when' and by 'who' that needs to be done to reach your goals. When a business owner tells us, "we are just all over the map," it usually means they do not have a strategic plan. To build your business strategy, you need to understand at a minimum these points about your business prior to setting your goals:
The mission of your business
The vision of your business
Company values and culture
Value Proposition of your business
SWOT of your business
Clear definition of product and services, including features and benefits
A defined target market and size (how much is possible to capture)
A pricing model developed that is competitive but allows you to make revenue/margin
Competition and how to sell against them
Best channels to market your products
Marketing that will provide you with a return on your investment
Resources you need to implement the strategy
Expenses (fixed and variable)
Revenue Sales Forecasts
Margins
Breakeven Point
Metrics to measure success
When you change your business, you must adjust your strategy. A business strategy usually focuses on a 3-5 year outlook and guides you to help you achieve your business goals. Even with a 3-5 year strategy, things will need to be tweaked here and there. A business strategy should not remain stagnate, as it is forever changing as your business does.
Having A Strategic Plan From the Start
Businesses that start developing strategic plans from the beginning tend to have a better chance of success down the road. If there has never been a business strategy, creating one becomes more difficult the longer the business goes without one. It won't be easy to obtain financing or investment as well. Change will have to occur if most of the items above have not been defined and addressed. Any transition is easier to implement in business before you have many employees on board and generate significant revenue.
Updating Your Current Strategy
If you have a business strategy in place and are looking to grow your business, you will want to take the current strategy and look at the areas that need to change to meet your business goals. You need to modify or add items in other areas of your strategy that will be affected and help you achieve your growth. For example, you might add additional channels to market or new products.
Business Plans Without A Strategy
Strategic Planning and Business Strategy do not have to be that kind of four-letter word or be an arduous task. If you are looking for financing and need a business plan without a strategy, a business plan will cost you a lot more money. The strategy has to exist before a business plan can be developed. These are two separate engagements. If you do not have a strategy, your business plan will be full of holes, and you will risk not being able to obtain the financing or investment you need.
Our Offerings
We offer strategic planning that are 2-3 days in length onsite or online with pre-work depending on the size/complexity of the business. You will walk away with your business strategy defined and not have a stack of paper to file. We provide deliverables that are on a few pages that are easy to understand for your entire organization. To find out more, check out our strategic planning engagement. We also offer business coaching to help you develop your business strategy for those business owners who want to learn how to do it themselves while being guided by a business coach.