Developing a Business Strategy

Business strategies are one of the fundamental tools that every business needs to create and consult on a regular basis. An effective business strategy serves as a road map for making the company successful by establishing goals and determining the direction necessary to make things happen. While not the same as creating a business or marketing plan, a business strategy often addresses factors that are crucial to the proper implementation of everything from general operations to product development to sales and marketing.

Instructions

1. Conduct a SWOT--the identification of the company’s strengths, weaknesses, opportunities and threats. Strengths may include a strong sales force, while a weakness may be older production machinery that needs updating. Opportunities may spotlight the potential to expand into a new niche market, while threats could be something like a factor that could drive existing customers to find another vendor.

2. Define specific goals and establish time frames for their completion. One of the most common mistakes is to create goals that are so broad that it is impossible to set up a process to achieve the goals. Instead of “make a lot of money” or “sell a million units,” go a few steps further. Determine how many units you want to sell over the next 12 months, in 3 years and in 5 years. This type of detail provides a benchmark that will help you develop your business strategy into a fully functional process.

3. Establish action items that are associated with each stated goal. Goals are normally achieved by incrementally making progress toward the goal. For example, if you know that you must add a certain number of customers to your client base to sell the number of units you have in mind for that first year, calculate time frames for bringing on each new client and enjoying additional sales.

4. Spell out the process associated with each action item. Even if the process seems self-evident to you, chances are it is not so clear in the minds of everyone concerned. By establishing a sequential list of steps for each action item, it is easier to assign various tasks to the right people in the organization and complete the action items in a timely manner.

5. Implement the processes developed to achieve each action item. This in turn allows your company to successfully attain the goals identified in the strategy. While this seems like a logical progression, far too many companies go to the trouble of developing a strategy and then fail to fully implement each and every step identified in the plan. Make sure each facet of the business strategy is activated and monitored according to the time frame spelled out in the overall strategy.

6. Review the business strategy regularly. While you may consider the task of developing the strategy to be complete once the original approach is approved, that is not the case. Changing economic factors, shifts in consumer tastes and even political elements may impact the feasibility of some aspect of the overall strategy. By evaluating the current status of the strategy and determining if something needs to be adjusted to accommodate new developments, it is possible to continue the march toward achieving the ultimate goals.

Tips & Warnings

• Consultants are available to assist in defining and implementing a business strategy. If possible, go with a consultant who has experience with your industry or market. This will minimize the learning curve necessary for the consultant to understand the particular needs of your company.

• Test-drive your business strategy. Once you think you have a viable approach, create some scenarios that could possibly occur within your market sector. Determine how well your business strategy can respond to those scenarios. While time-consuming, this exercise can help to identify areas that were not obvious before.

• A business strategy does not emerge from a couple of meetings. Often, the process can take several weeks or months to fully develop. Beware of any efforts to rush with the process for the sake of expediency. Moving too quickly can result in a failure to address issues that could have a negative impact over the long term.