Your business strategy is your roadmap to business success, but it needs to be adjusted annually. You and your team should take a look at your business strategy every fall to plot out your sales objectives and goals for the new year. 2019 is just around the corner, and you should start your planning process now. When evaluating any business strategy your top concern should be what will help you accomplish your financial goals the fastest. In part II of the series on how to develop a business strategy, we’re going to discuss why strategy fails for small businesses and criteria for good business strategy. Any growth strategy must be measured based profitability, customer satisfaction, conversion rates and retention rates.
Why does strategy fail for many small business owners?
Chasing too many types of opportunities. Lack of specific targets and time frames means you don’t have an organized sales process. If everyone can use your product or service, no one will. Focus on specific targets and set goals to hold yourself and your team accountable.
Make emotional decisions about business opportunities If you shoot from the gut, and make business decision based on how you feel instead of using data to drive business decisions, you’ll make the wrong decision. Instead use careful research, analysis, an experience to make business decisions.
Lack of market intelligence We are in the information age. there is an abundance of information about anything online. As small business owners we need to take advantage of market intelligence.
Consistently focus on the problems in the business If you are always stressing over your problems instead of doing your daily business development activities. If you turn yourself into a horse with blinders on, you won’t see opportunities right in front of you that might be readily available to you.
The criteria for a good business strategy is gathered below:
- Consider multiple scenarios to evaluate alternative strategies. No small business owner should be wedded to just one strategy. Instead, take multiple approaches into consideration. Factors to consider include cost to pursue a new market, risk, and aligning any strategy with your mission, vision, and required profit margins of your business.
- If you make a mistake once, it’s a mistake, if you make a mistake twice it’s a problem. Often as small business owners, we repeat problems. This is because we are not studying our past or focus on the long-term future of the business because we tend to stay in survival mode.
- Look outside the business to external factors. Pay attention to industry trends and regulatory changes in the marketplace. This will allow you make changes to your products and services to anticipate forthcoming needs of your clients or even your marketing strategy.
- Keep an eye on the competition and technological advances. While you don’t want to obsess over the competition you do need to pay attention because another business or disruptor can come along an innovate you right out of business.
- You must be able to measure traction towards your financial goal over time. If your goal is to increase revenue by 50% in six months, then you’ll need to look at your financials monthly to make sure progress is being made, otherwise you’ll know that more effort is required or that the strategy isn’t working. Weekly meetings will help keep everyone on track.
It’s not enough to develop a strategy. Whatever your key performance indicators o KPI’s are someone must be accountable to executing the strategy. As the business owner, you are ultimately responsible, but you need to have measurement for everyone to stay focused working towards to business goals
Next week, we’ll look at the benefits of a business strategy.