Creating a strategy for your business
Strategy can be a scary word for a small business. However, having a clear strategy for the direction of your business can help you make clear decisions about where you want your business to be.
Putting together a strategic plan isn’t as difficult as you may think – it doesn’t have to be “War & Peace” and in some cases may even be condensed to a one-page basic outline of what you’re looking to achieve.
So let’s crack on and show you how to put one together.
Where we start may be considered a bit namby-pamby for a small business and you may see it as something for corporates: it’s creating your vision and mission! Now I appreciate that you may have worked for a bigger company. Often the vision and mission statements can be pretty meaningless; possibly because they have been created for the wrong reasons and don’t resonate with employees or customers.
Vision
Your vision should outline where you want your organisation to be or how you want to be perceived in the domain in which you operate – this could be an idealised view of the world from your perspective. It’s a long-term view and concentrates on the future. It could be the basis of why you’re in business.
The vision should –
- be inspirational and about how you see the future for your business and industry sector
- reflect your core values and purpose
- be short and easy to remember
- make sense to everyone; especially if you have employees
Examples of vision statements –
- Microsoft (at its founding) – A computer on every desk and in every home
- IKEA – To create a better everyday life for the many people
- Tesla – To accelerate the world’s transition to sustainable energy
- Disney – To make people happy
- Nike – Bring inspiration and innovation to every athlete* in the world
- Apple – We believe that we’re on the face of the earth to make great products and that’s not changing
Mission
Mission statements define the fundamental purpose of a business; briefly describing why it’s in existence and what it does to achieve the vision. It’s more practical than a vision as it could contain how the vision is going to be implemented.
A mission should –
- clarify your offer to the customer
- identify the core competencies of the business
- explain what you do and how you do it
Examples of mission statements –
- IKEA – Offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them
- Google – To organise the world’s information and make it universally accessible and useful
- Nike – Create groundbreaking sports innovations, make our products sustainably, build a creative and diverse global team, and make a positive impact in communities where we live and work
- Apple – to bring the best user experience to its customers through its innovative hardware, software, and service
Values
At this point, you may also want to consider what you and your company’s core values are. These can be used in conjunction with your vision and mission to help define your business and the unique elements of it. They are the fundamental principles on which your business is built.
It can take a while to define your vision, mission and value statements, but it’s worth the effort as it will ultimately define why you’re in existence, what you do, how you do it and some of the core values and competences you have as a business. In turn, this investment in time will pay you dividends going forward, making it much clearer for you to make business decisions based on these foundations.
While your vision, mission and values don’t have to be shared, there is no disadvantage in doing so. It’s another way of engaging prospects, customers and employees and aligning them with the purpose and intentions of your business. It can also help your marketing message in distinguishing you from the competition, which nicely leads on to the next two elements of planning your strategy.
Competitive Advantage
The chances are that what you offer has competitors or alternative substitutes for what you provide. Therefore you’ll need a competitive advantage to distinguish yourself in your marketplace. Some call this a Unique Selling Proposition/Point (USP) – note this can be misleading as you may have more than one USP for your business or the USP may change depending on your prospect base.
It’s also worth saying that your USP may be something you’re taking for granted that you’re not making obvious to customers or prospects.
Consider what pain you’re easing or need you’re fulfilling and what are the benefits of doing business with you over an alternative supplier. You need to stand out from the crowd and not appear the same (or a commodity) to your potential customer base.
Imagine if you were a shop on the High Street and a competitor opened up next door, what would you do to encourage people to come into your shop and not theirs? Or, let’s say you took the “header” off your website and swapped it with the “header” of your nearest competitor’s website, would there be any significant difference? Better still, if you can become the recognised expert or specialist in your line of business, won’t this significantly enhance your position versus the competition?
Think about what your competition doesn’t offer that you do; or what they can’t or won’t offer. It could be based on
- size (being number 1 in your field)
- location (only one in your area offering what you do)
- value
- exclusivity
- any number of other factors that may be specific to your particular industry.
One great way of helping you stand out is to offer a guarantee. This may already be something that you do but you’re just not telling the world. For example, if a customer is unhappy with the service you had provided, then presumably you’ll offer a refund, undertake the work again at no cost or offer a replacement. You get the picture. Well – make that the guarantee! It massively increases the chances of someone doing business with you.
Ultimately, you’re the unique thing about your business – so leverage that. Your story as to why you’re in business is specific to you only. People buy from people they know, like and trust; it’s a decision based on emotion. Connecting with people on this level will help you rise above your competitors.
Target Market
This can be contentious for some and is covered elsewhere in other chapters within this book (probably because it’s one of the most important things to consider in your business).
Unless you already have a particular niche, then you can more than likely sell to anyone. That is fine. However, it’s extremely difficult to market to everyone. Therefore, it’s beneficial to target your market within the millions of potential customers you could potentially serve. The fear is that you’ll miss out on opportunities by narrowing down who you’re looking for. In reality, the opposite is true. The better “avatar” that you can create of your ideal customer, the easier it’s to market your services and generate business.
Consider –
- turnover
- number of staff
- geography
- industry sector
- sex, age or ethnicity
- hobby/interest
- position within a company
- and so on
…or more than likely, a combination of these factors.
Think about how many new customers you want in a year, for argument’s sake, let’s say 20 – wouldn’t it be easier to identify 100 prospects and target them as opposed to taking a shotgun approach to thousands hoping for the best?
Pillars Of Business
The next thing to consider are the “pillars” within a business that constitute the makeup of all organisations. These cover all aspects of your business –
Finance | Sales | Marketing | Operations | Resources | Personal
Things to consider in each of these sections (this isn’t an exclusive or an exhaustive list – there will be things that may be specific to your business or industry sector) –
- Finance
- Turnover
- Profit
- Creditors
- Debtors
- Break-even point
- Assets
- Loans/Debt
- Purchase costs
- …
- Sales
- Number of customers
- Sales revenue
- Sales pipeline
- Salespeople performance
- Best/worse customers
- Average sale per customer
- Pricing
- …
- Marketing
- Target market
- Methods to market
- Return on investment
- USP
- Competition
- …
- Operations
- Business systems
- Business processes
- IT support
- Quality
- Customer service
- Health & safety
- …
- Resources
- Outsourced services
- Staff
- Legal requirements
- …
- Personal
- Your health/well-being
- Work/life balance
- Personal development
- …
While there could be some overlap with these domains, the task is to consider each of these areas and focus on the following –
- Where you are now
- Where you want to get to
- How you’re going to get there?
- What are the “now” actions?
- What are the “next” actions?
That’s it!
This can be done over any period of time; for most small businesses looking 12 months ahead is fine. Because this should be a “dynamic” document i.e. reviewed and updated regularly (ideally monthly, worst case annually), then you’re adapting the plan for any changes in circumstances. Actions should be regularly reviewed – they should translate into your regular “to do” list items.
So, for example, take your finances. Look at your current turnover, profit, costs and any other aspects you want to consider under this “pillar”. Then look at where you want to be. The gap between now and then is what defines the actions you’re going to have to take to achieve the objectives you have set.
To elaborate (over 12 months) –
| Where are you now? | Where you want to be? | How? |
| Turnover £100k1 | Turnover £120k | Now Actions Review current pipeline for opportunities to close Next Actions Identify new customers |
| Profit £10k | Profit £15k | Now Actions Look at where costs can be saved on current spend Next Actions Review suppliers Review pricing |
Actions should identify who is doing what and by when and these are updated as and when you review your plan.
1 This could be considered under the “Sales” pillar – it doesn’t necessarily matter as long as all the aspects of your business that you want to cover are included somewhere in the plan.
SWOT Analysis
As a final thing to consider in your planning, a SWOT (Strengths – Weaknesses – Opportunities – Threats) analysis can sometimes identify things that may have been missed, as well as complement the overall plan; providing an easy to digest overview of your business.
For those unfamiliar with this tool, it’s a way of identifying your strengths, weaknesses, opportunities and threats into an organised list and is usually presented in a simple two-by-two grid –
| Helpful for achieving objectives | Harmful to achieving objectives | |
| Internal factors | Strengths | Weaknesses |
| External factors | Opportunities | Threats |
Hopefully, you now feel more comfortable putting together a strategy for your business and feel that it’s beneficial to do so. There are numerous statistics out there confirming the importance of a plan for the success of any business. And, as you can now see, it doesn’t have to be an over-complicated process to be effective.
Even if this seems a daunting task as it stands, it doesn’t all have to be done in one go – just break it down into the bite-sized chunks you’re comfortable with and work on each section to create your plan over time.
Either way, the execution of any plan is the important piece of the jigsaw. You need to take action to move your business forward and which actions you take (and don’t take) should be guided by your strategy.
You’re bound to make mistakes on the way as pretty much every small business owner does. Having a plan should limit the number of stumbling blocks ahead of you, giving you clarity over the decisions you make. It will also save you time as your productivity should be improved only focusing on those actions that are in line with your vision, mission, values and where you want to be.
What have you got to lose? Get planning!
Attend a business planning workshopOriginally posted 2020-07-28 16:35:31.
His experience and knowledge of 20 years being employed by someone else and to date, working with 100s of business owners, gives him the confidence and ability to offer business advice, coaching and training when given the opportunity to do so.
Having experienced the trials and tribulations that face a small business on that entrepreneurial journey, he is passionate about making sure businesses don't make the same mistakes that he made en route! He is a big believer in collaboration and encourages businesses to work together to grow their businesses; as well as offering help and support to each other for mutual gain.
