Developing a business strategy is all about looking at where you want your company to be in the next 3-to-5 years and figuring out what you need to do now to get there. If you spend your days constantly putting out fires in your business, it’s doubtful that you have much time for developing a new business strategy. But if you ever want to stop living like that, you need to make time. Strategic planning can reignite your passion for what you’re doing. By reconnecting with your “Why” story, you can reclaim your original business dream. The daily stress of a business is tough. It’s easy to flip into survival mode and lose sight of that dream that you set out to accomplish in the beginning when you started your business.
But you can always hit the reset button. By clearly identifying your niche target customer, validating your value proposition and setting sales goals, you’re no longer winging it. In my series on developing a business strategy in Part I, we discussed how to create a strategy and in Part II, we focused on why strategy fails for small businesses and the criteria for good business strategy. In Part III, we will focus on the benefits of a business strategy. Just consider this, developing a long-term business strategy will increase your chances of business success by forcing you to develop strategies and tactics to address any identified problems. Here are the 7 Main Benefits of Developing a Business Strategy.
1) Minimizing Risk:
One of the main benefits of developing a business strategy is that it reduces risk. Once you’ve envisioned your company’s future over the next 3 to 5 years and done a thoughtful analysis of current state, resources, strengths and weaknesses, competitors and the business environment, you will be better equipped to make decisions and therefore to minimize risk to achieve your company’s potential.
2) Cost Savings:
Once you’ve defined your long-term goals, you will have significant cost saving because you will not waste any marketing resources or time on business appointments or opportunities that are not a fit for your core expertise, focused on your niche target customer or don’t drive the ideal profit margin.
3) Keeps Focus:
Without a clear vision of what you want to achieve, everything might seem like a good idea. With a clear strategy, you can build a go/no-go list to clarify the right business opportunities. When you are clear about the customers you want, you are able to make good decisions about your marketing investments such as attending conferences and trade shows or investing in direct mail campaigns and online advertising. You have limited time and resources, so it’s critical that you stay focused on the right opportunities.
4) Business Goals Are Easier to Achieve:
Focused planning and strategic thinking will uncover the customer segments, market conditions, and new product and service offerings that are in the best interest of your company. A targeted approach will guide your sales and marketing efforts. When you are focused on specific business targets, you are able to focus on customer retention activities and providing better customer services and anticipate customer needs.
5) Improved Company Morale:
When profits are going up company morale goes way up and it makes it much easier to attract top talent. When you start to get positive press for your success like making the INC 5000 or best places to work in your city these accomplishments will make people want to come work for you.
6) Unique Value Proposition:
Some small business owners study their competitors best practices so closely and then try to duplicate them, and then risk losing their unique value in the marketplace. Strategy means having a unique differentiation that sets you apart from your competitors. Your strategy should reinforce your unique value proposition.
7) Create Longevity From The Business:
The world market and industries are changing faster than ever and those small businesses who do not have a solid foundation and have relied on luck, word of mouth referrals or opportunity most likely will not be around in the future. Data reflects that one out of every three companies at the top of their industry will not be there in five years. Focus is powerful. Your business strategy will give you direction and focus.
A final note of advice about developing a business strategy. You might want to seek an external, objective point of view to review your plan once it’s finished. It might also make sense to hire a consultant to guide you and your team through the strategic planning process. A consultant will also ensure you finalize your plan and establish clear timelines and assign responsibilities to you and your team.