Small Business Strategy

You probably will not relish the thought of producing a Business strategy. In fact many Business managers don’t really see the need. The truth is that most successful businesses have well defined business strategies.

Creating a business strategy can mean the difference between making lots of money and you working 12 hours a day, 7 days a week – and not having a cent to your name at the end of it.

So, are you working too hard? Many highly effective managers who have a business strategy work fewer hours and have a lucrative income – and they mostly attribute their fortune to having a strategic plan which guides their business.

So what is strategic business management? Very simply, it’s the process of allocating goals and objectives for your business, creating your action plan that is designed to help you achieve your goals and then following the plan.

How do you create a strategic plan for your business?

1. Define your business vision. If there were no barriers, nothing stopping you from taking your company as far as you could — what would that look like? How much would you make? What would be your major products and/or services? How would you like to be seen by your investors?

2. What are your core values? You are looking for the core beliefs and values that you wish your company to be known for. Once your key values are clear they form your guiding principles. In other words, why are you in business and how do you do business?

3. Strategy concerns long-term plans. Your strategic is based on the broad aims that are devised to get from where you are now, to where you need to be.

4. Medium Term Planning. These are the specific goals you plan to accomplish this year that will move you towards your long-term goals. Remember to be “SMART” when setting your annual goals (Specific, Measurable, Attainable, Relevant and Timely). Be clear on the constraints you face. Map the resources you need against the resources you have. You may need to adjust your objectives at this stage. And then create an action plan that clearly lays out how you will achieve your goals. Involve key employees with this part of the planning process.

5. . Create a set of benchmarks. This step is important. Being able to communicate progress to all stakeholders: investors, shareholders, partners, staff, customers and your local community is immensely powerful.

6. Communicate your strategy and plan. The short-term plan from your strategy creates the momentum and direction for your day to day activities.

7. Walk the Talk. Now that you have the roadmap, it’s time to begin the journey.

8. Monitor. Just like any trip, you need to check the map mostly all now and then; to be sure you’re still on the right road. If something is not working, the sooner you figure it out and make the necessary adjustments, the sooner you’ll be back on track.Prompt corrective action is generally more important that the plan itself.

9. Put a process in place so you do the same thing each year.

Creating a business strategy and following it will ensure that you enjoy the journey as much as getting to your final destination. You may never achieve the vision developed as part of your strategy. The process of developing that strategy will certainly mean you learn more about yourself, your company and your markets and competition. Armed with the knowledge you are certainly able to cope with, and profit from, the unexpected.

An Interview with Michael E. Porter, Professor, Harvard University. Porter’s five competitive forces is the basis for much of modern business strategy. Understand the framework and how to. . .