Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with Janneh Wright, @primusbus. Janneh is an entrepreneur, author, advocate for better business practices within Black communities, and owner of PRIMUS Business Management. He has over fifteen years of experience leading nonprofit organizations. For more information visit:
SmallBizLady: Why is having the right business strategy important?
Janneh Wright: There were approximately 27MM small businesses in the U.S. in 2012. There are now 30.2MM small businesses today. According to research, the five-year business survival rate is a little over 40%. Those without the right business strategy are shortlisted for ending.
A business strategy encompasses looking at where you are where you want to be and how to bridge the gap. It also takes a deep dive into the competitive landscape, the consumers that you serve and assesses their needs and how you are meeting their needs. There is leadership consideration, branding, and marketing considerations, financial considerations. Without these assessments and a corresponding strategy to win, success is difficult especially for minority-owned businesses and social enterprises.
SmallBizLady: What do business owners have to take into consideration as they set their strategies?
Janneh Wright: It’s important for business owners to look at their skillsets. Some business owners believe that because they are good at their trade, they can transfer it into a business. In my book, I reference this as leadership failure. The belief that you know how to fix a car does not mean you can easily open and maintain an auto repair shop.
Therefore, as you begin the work to set your strategy, you must take into consideration your strengths and the strengths of any members of your team. Understand where there are weaknesses and ensure that plugging those weaknesses are part of the strategy.
SmallBizLady: Setting the strategy sounds like a lot is involved, how do business owners, especially those in smaller organizations get it done?
Janneh Wright: Many business owners are so invested in their businesses that they take on more than they should. I alluded to this a little earlier, but a business owner needs to understand what they are good at and learn to delegate the rest. There is a quote that says, “deciding what not to do is as important as deciding what to do.”
Business owners need to allow others to assist. The concept of opportunity cost comes to mind. If you are spending time doing work that someone else, more skilled at the task, can do in less time and for less expense, you should delegate. Having the time to work on a business strategy and having competent partners to assist is invaluable.
SmallBizLady: What part does Ethics play in a business strategy development?
Janneh Wright: A code of ethics is one of the most understated parts of creating a business. It is a great way to illustrate to all stakeholders what values are important to your organization. It creates a framework for all company interactions both internally and externally. Your company ethics should also be reinforced in your organization’s policies and procedures manual. It sets the tone for who your organization is and whom it intends to serve.
So, placing a code of ethics is a must as you develop your strategy will ensure that it is part of the fiber of your organization.
SmallBizLady: Most business owners have a vision of where their company will be, how do they create a strategy that makes the vision a reality?
Janneh Wright: It is my belief that all business strategies should begin with a vision statement and not the mission statement. The vision statement is much larger than a mission statement. It is the reach the stars vision of your company. What is the ultimate goal of the business? What scratch are you trying to itch? It does not matter how big and overwhelming it is. Once you have that you can start identifying all the factors and strategies needed to accomplish that mission. This is where you will develop the mission of the business.
The trick is to be able to articulate the vision of your organization in clear and achievable, aspirational and future-focused statements that prompt stakeholder engagement and satisfaction. It should also convey the values, goals, and direction of your business. A well-crafted vision statement will allow employees to be true ambassadors of the organization as they will be able to communicate a consistent message to customers. If everything the organization does is in line with the vision, it becomes that much easier to achieve.
SmallBizLady: Should there be a strategy for Customer Service?
Janneh Wright: All Businesses have clients, therefore having a strategy on how to engage them is a must for two important reasons;
1) Training for your staff on your expectations of how they interact with your clients. Your staff is the first point of contact with the world at large. How they are seen is a direct reflection on how your business is perceived.
2) Match client expectations with yours. You understand your product and services better than anyone else. So, you are in a position to ensure that customer satisfaction is always as high as possible.
Ensuring that a Customer Service strategy is in place will allow you to know that your clients are being taken care of in the right way.
SmallBizLady: With so much competition out there, how should business owners gain the trust of consumers?
Janneh Wright: There are many ways to do this. Integrity is one of the frequently mentioned traits that are perceived to be missing in small business. Whether this is an accurate depiction or not, it is a characteristic that business owners must work hard to dispel. Your ethics, your values must always be on display as a business owner. Customers and clients take slight cues from their interactions with you and your employees to create their perception of you and your business. A negative perception will be amplified with a positive perception will be whispered.
So, ensure that you have a code of ethics, a vision statement, a values statement. Train your new staff and revisit annually with all staff to ensure they understand them and work by them. Make every encounter with a client positive. Chip Bell says, “Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.”
SmallBizLady: The market, its potential, and its trends are the starting point, but they are unpredictable. How can a business owner anticipate market changes and how can he adapt their business model to new market trends?
Janneh Wright: Market Trends, Government regulations, Environment changes are unpredictable but must be managed. I believe that one of the greatest tools at a business owners’ discretion that they underestimate is there consumers. Most trends whether market or otherwise can be linked back to your consumers. Survey them, talk to them, understand what they like and what they do not like and adapt your business model to ensure that you are keeping your consumers happy.
SmallBizLady: Why are innovation and product development considered crucial components of gaining a competitive advantage?
Janneh Wright: Innovation and product development are attributes that measure adaptability. If you are unable to adapt to the changes in the competitive landscape or changes to consumer needs, you will quickly become irrelevant. Innovation allows you to bring new news to your company, brand, or message.
You don’t have to ditch what you have to innovate or develop new products, but you gain a competitive advantage by bringing in something new. Innovation and product development can also take the form of highlighting a benefit that already existed but no knew about, or no one cared about. These are the things that make your business unique or serve as the true value proposition of your organization.
SmallBizLady: How important is Consumer Demographics?
Janneh Wright: Understanding your consumer demographics will allow you to evaluate your target market and determine If your target market has enough potential customers. You should also consider; will the target understand your product? Will they see the benefit in it? What are the best mediums to use to reach this market and are they easily accessible? You want to try to understand how they make decisions, and can they afford your product or service. So, understanding your consumer’s demographics in very important as you continue to grow your business.
SmallBizLady: Does every company need an online presence to succeed?
Janneh Wright: I think it was Aaron Lee that said “These days, social media waits for no one. If you are late for the party, you will probably be covered by all the noise, and you might not be able to get your voice across.”
The days of finding a business in a book are long gone. Everyone is searching the internet for products and services, and if you aren’t there, you are missing out. The combination of a website, social media, and properly executed SEO (search engine optimization) can catapult a company from oblivion to a household name if done correctly.
SmallBizLady: All small businesses have financial concerns; how can those be mitigated and how can a strategy help overcome that?
Janneh Wright: As a person with an accounting background, I will always look at the financial budget as the number one strategic boundary that must be set. As I work with small businesses, I understand that they are very cost conscious and to be able to manage and run your company on a day to day basis, I believe developing a realistic budget is the ultimate achievement. It is important that there be a balance.
Many small businesses that fail take on too much debt, lacked a financial plan, dreamed too big or too small, did not track expenses or even failed to chase payments. All business owners must pay maximum attention to their finances and keep a careful and systematic record of all funds coming in and out of the business. They need to plan for future growth as well as future uncertainties.
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