Features

Red Apple Consulting

Laura Rudman, Founder and business trainer of Red Apple Consulting

The importance of a business strategy is often underestimated by small/medium size businesses. Business owners are concentrating on short-term day to day activities and neglecting the long-term growth plans to sustain the business.

A strategy is what drives your business forward, and it is an activity that can not be outsourced or passed on to others to do, as a business owner it demands your personal time and thought investment.

A business strategy should be defined before you start your business and should be assessed & revised on a frequent basis. Without planning for the long-term, it would be impossible to increase the size, revenue & statue of your business. As a small business without strategic planning the risk of going out of business is high.

What is a business strategy?
A business strategy is your long-term plan for your business (usually 3 to 5 years). It defines the direction and scope of your business to achieve objectives and advantages. In other words, your strategy defines where you want your business to be in the long-term and what action needs to taken to get there.

How to start defining your business strategy?
The task of defining, formalising and committing a business strategy to paper can be overwhelming. To help the process of getting started, I would recommend you simply start by answering the following questions:
1. What product are you planning to sell?
2. What market are you planning to sell your product in?
3. What costs will you incur making the product, marketing the product, selling the product and delivering the product to your customer?
4. What resources (skills, assets, finance, relationships, technical competence, facilities) will you need and what will they cost?
5. What do you expect your monthly sales projections to be and how much income would this be?

At the very least, a business strategy should cover products, markets, organisational competence and financial performance. Answering the above questions creates the start of a well scoped business strategy.

How to give your business strategy a chance of success?
There are many factors; like seasonal fluctuation, changes in consumer taste, increase in competition, substitute products, increase in interest rates. . .; that will impact and influence your business, and therefore impact your business strategy. Along with doing an internal appraisal these external conditions must be considered when formulating your strategy, it must detail how you plan to take-up external opportunities and mitigate against external threats and risks. This will increase the longevity of your business strategy.

Once you have answered the earlier questions; then give good consideration to how the current behaviour and possible future behaviour of each factor listed in the dartboard below could impact your plan, and then make the relevant changes to your strategy as to how you plan to react to these changes to sustain or grow your business.

A business strategy is all about analysing the strength of your business's position and understanding the important external factors that may influence that position. The process of ‘Strategic Analysis’ can be assisted by a number of tools and techniques; for example PEST, SWOT, Customer Profitability and Five Forces Analysis. There is a Red Apple Consulting course dedicated to providing you with the understanding and confidence to use each of these strategic analysis techniques and others, so you can properly define your business strategy.

What to do once you have defined your business strategy?
The most important thing to recognise is your business strategy is only a plan. The success to your business comes from monitoring & measuring your performance against the plan, considering & understanding the reason for the variance and making adjustments accordingly, some changes might be fundamental and some might be minor refinements. A strategy is a continuous work-in-progress and as a business owner it must be your top priority.

 

---

---