September is the perfect time to start looking ahead to first quarter 2019. The fall is right time to start thinking about your business goals and then engage your team in developing a new business strategy. Winging it is NOT a strategy, yet too often business owners venture into new markets without a specific target or value proposition, hoping to come across someone in need of services. If you’re looking to identify new business targets, outline a growth plan, determine your product roadmap or plan your funding needs, you’ll need a clear business strategy. It’s one thing to know your business needs, actually developing a strategy is not so easy. This is the first article in a three-part series on building a business strategy. This article is about how to develop a business strategy. Part II and Part III will focus on why strategy fails for small businesses and the benefits of a having a current business strategy.
Here’s the six-steps to develop a new business strategy.
1. Examine Your Current State
Before you start looking to the future, you should review your past business performance, or the current state. Look at your annual revenues, customer lists, average revenue per transaction and review your most popular services or products. Then look at how your business operates. Look at your market position, employees, sales processes, profit margins and customer satisfaction. Use a SWOT analysis to conduct your review. You must determine what worked well, what could have been better, outline your weaknesses and consider what new opportunities are in the marketplace. When you look at your business, bring your team together to make sure you are collecting all the relevant information that you need.
2. Look at External Factors
There are things that affect your business that are not under your control such as industry trends, government regulations, legal compliance, political policies such as international tariffs. Technological advances as well as environmental concerns such as a neighborhood community protesting your restaurant getting a liquor license, can also affect your business results or expansion plans. External factors can either be threats or opportunities depending on how it impacts your industry, your business or your location.
3. Develop or Refine Your Mission Statement
Your mission defines your business purpose. It outlines your company’s primary objectives. It’s the core off your “Why” story. It should be big enough that it is something that you are continually striving toward. Your mission must focus on your long term goal. My mission is to End Small Business Failure. Your mission statement should answer the questions:
- What do we do?
- Who do we do it for?
- What problem do you solve?
4. Develop or Refine Your Vision Statement
You mission and vision statements work together. For the vision statement, you want to answer the question: “Where do you want your business to be when it grows up.” My vision was to become America’s #1 Small Business Expert. That was a bold vision back in 2007, but your vision is supposed to push you. This statement should describe what you want to be known for and the future direction of the business. It’s value statement that is achievable that gives direction in the medium to long term of your business.
5. Define Your Strategic Objectives
You want to develop a set of objectives for all areas of the business. They need to highlight the priorities that will deliver on the company’s vision and mission. Create SMART goals for your business (Specific, Measurable, Achievable, Realistic and Time-Driven). Your objectives must also include factors such as KPI’s, human resource allocation and budget requirements. Use the data from your the SWOT analysis in Step 1, to help identify strengths and weaknesses that you can build into your objectives.
6. Develop an Execution Plan
Now is the time to turn your new business strategy into a detailed execution plan. This plan will require actions from you and your team. You may also need new reporting structure or project management software to keep everyone on task. When you are focusing on achieving new results you must communicate to do and by when dates, so that everyone is clear on their role. Be sure to schedule weekly staff meeting to reinforce tasks keep all key documents and deliverables in one place where everyone can access.
Do you have any suggestions for building strategic plan? I’d love to get your feedback. Next week, we’ll discuss the why strategy fails in small businesses and criteria for a good business strategy.