Every business needs a strategy – something to outline the key goals of their organisation. A well-outlined business strategy is essential for the success and sustainability of any business venture. Without one, your business could lack direction, effectiveness and profitability.
A helpful definition of business strategy is a long-term plan designed to achieve a particular goal or set of goals or objectives. It states how your business will be conducted to achieve your desired goals.
Your business strategy needs to have a time limit set on it so that you know that you will be able to describe what the success of your businesses looks like at a specific point in the future.
Many business strategies are three of five years long; others even longer. When you first start a new business, it might be better to look at the first 12 or 24 months of your business, as things can change very quickly at the beginning of your business journey.
Your business strategy in not your day-to-day action plan for your business – that’s where your business plan lies.
Your business strategy needs to set what goals (headline achievements) you want to deliver within the time period you have set above.
These are real big picture achievements (goals) – such as, turnover of £250,000 or 1000 items sold or your business is the preferred supplier of dental floss sticks to the National Health Service.
These goals should be specific.
You will learn much more about these two things in the next section but developing your vision and mission for your business are an integral part of creating your business strategy.
Your vision will describe what you want your business to become – the biggest supplier of book markers to the school sector in the UK or the go-to place for your wedding bouquets in Yorkshire, for example.
Your mission will describe who you are and why your business exists – we’re a family run business with family values who you can trust to focus on your child’s learning needs (a nursery) through to we’re a focused, technology driven partnership providing cost effective online solutions for your small claims needs.
Your business strategy will have some reference to the market you will operate in, identifying competition and customer bases and outlining the opportunities you intend to take. You can undertake your own research (this is known as primary research) by various means – such as online searches and customers surveys etc. Secondary research refers to information on your market which has already been undertaken by someone else – perhaps a trade magazine or an online publication.
There are some key questions you will need to ask as part of your research:
There is more information on marketing analysis and research in the EduGrowth module 1 Assessing Your Business Idea and module 12 Researching Your Market.
It’s important that your business strategy is well thought through and is clear in its content and well-structured in its design. You may wish to use it to evidence where your business is going in the future for example to providers of external funds or to your staff as basis for developing team objectives etc, so it is important that your strategy is coherent.
So, you can be confident that your business strategy is a realistic and achievable set of aspirations for your business, you will be best served by undertaking a SWOT analysis of where you are and where you want to be. Being realistic about accessing the resources (financial, human, physical and technical) that you will need to achieve your goals will be a key part of that analysis.
Strengths can be identified by asking what advantages your business has and what its unique selling proposition (USP) is. It is important to consider what other people in your market see as your strengths i.e. a brand name, patent or a workforce with a particular skillset. So, questions like:
Weaknesses would include – what your business could do to improve, what you should avoid (be it due to brand name/reputation, resource etc.) and what factors ultimately lose your organisation sales. Possibly questions like:
When identifying strengths and weaknesses, it’s important to compare your organisation to its competitors. Some of your proposed strengths could simply be a requirement of your chosen market and therefore not actually a strength.
Opportunities are the things you want to achieve with your business and the conditions (external and internal) that will help you attain those goals. Think:
Threats are those things which, if they happen, may provide a barrier to the success of your business. Think about:
It’s also critical to be honest! Lack of honesty is a common pitfall in undertaking a SWOT analysis, so remember this is a document that you are going to use to critically assess your current position. Using realistic information will ensure that a high-quality output is achieved.
Watch the video below where we talk about a SWOT Analysis in a little more detail.