It is important for every entrepreneur and small business owner to create a business strategy every year.
This ensures they plan effectively on a consistent basis to create the best opportunity for healthy business growth and to hit your goals consistently.
I personally plan annually, broken down into four quarters (90 Day Cycles).
Performance is then reviewed on a weekly basis, monthly and quarterly basis amending and updating where required.
Every goal I set is specific and measurable.
There are a number of reasons why some business owners fail to plan effectively, mostly around time.
How to create a Business Strategy
It is essential that business planning strategy fits snugly into the working week and becomes a job that must be undertaken rather than being put off in favour of more ‘pressing matters’.
The question many business owners ask is ‘How can I plan effectively?’ What is my business strategy for growth?
Below is simple guidance to set up your Business Strategy for 2019:
1. Review Your Previous Year’s Performance
First things first.
How did your business perform in 2018 (although the year is not finished yet)?
How did it compare to the business strategy you wrote the previous year?
Did you meet your strategic business objectives, financial targets and goals?
What were the positives and negatives from the past year?
In simple terms you should review your financials both in terms of Gross Profit and EBIT.
You should be looking at customer or client performance in terms of gains and losses, increases or reductions in client spend and whether your financial performance has increased Quarter on Quarter.
It’s also good to review how it compares V the last two or three years.
You should be reviewing your category, product and service performance versus previous years.
Do a SWOT analysis
Undertake a SWOT analysis to analyse strengths, weaknesses and opportunities.
Set your goals and objectives for the coming year and explore creating a three-year vision to understand growth opportunities, laying out a comprehensive business plan and strategy.
It’s often a good idea to take some time away from the business ( I always take a strategic day every month to review performance), to give you some head space, when laying out your future business strategy and development plan.
Bring your trusted employees with you, if you have any, as more often than not they will be providing valuable input and ideas.
Business planning in four parts
Once you are ready to move forward with your plan it can be good to lay out the plan in four parts:
- Business Strategy
- Financial Plan and Budget
- Operational Improvement Plan
- Marketing Strategy
1. Building Your Business Strategy
The first question to ask is – what are the objectives of the business?
Why are you here?
What is your vision?
What is your purpose?
Once these have been laid out, entrepreneurs can then think about the business plan and resources needed to meet these objectives.
Business planning timeframes
For many business owners this long-term planning will contain a business strategy that sets the future direction of the business for the next 3-5 years.
If the business strategy isn’t clearly defined, with specific measurable goals, then it will become more and more difficult for the business to expand and meet the business goals.
The key is to, firstly, think about what needs to be done to meet the business goals, how the business plan will meet the business goals and help the business meet its targets.
It should define the purpose of the business, outlining its target market and current business offering.
It should consider business performance over the past three years, investment opportunities, outline how business strengths can be leveraged further, identify strengths, weaknesses and opportunities within its existing resource, clearly define opportunities for development and growth – whether this be a new product or service, customer growth potential, market opportunities, trends or acquisitions.
Specific, Measurable Outcomes
It is beneficial to lay out a clear timeline with specific, measurable targets when laying out the business goals and objectives married to financial tracking and performance. The good thing about the business plan is that it can be amended if new opportunities arise but entrepreneurs must focus on performance and results.
2. Financial Plan and Budget
The starting point is often an analysis of the business performance over the last three years.
This includes looking at Total Billing Revenue, Client/Customer Revenue, Cost of Sale, Gross Profit Performance, Business Costs and EBIT performance.
If the business has increased Total Billing for example but final EBIT has dropped that may be an area for concern.
Look at the revenue and costs projections month on month, by quarter and annually for the past three years.
Create a profit and loss
Think about what has worked well and not so well.
What expenditures are fixed and what can be moved?
How has the business grown or dropped?
What are the concerns going forward?
What are the opportunities?
Where do I need to invest or cut costs?
Plan for future growth
Project your guaranteed income and costs month on month and overlay it with customer growth and new business opportunities alongside any additional costs to all the business the best chance to measure its end of year business performance and financial position.
Measure weekly and monthly performance constantly to give the business the best opportunity to succeed and grow.
3. Operational Improvement Plan
There are always considerations to make to improve operational performance.
Ideally this planning should involve the senior management team to ensure maximum effectiveness and buy in.
The areas to consider include:
- Company Vision and Culture
- Leadership and Organisational Management
- Customer/Client Servicing, Relationships and Satisfaction
- Internal and External Marketing
- Sales and Business Development
- Cash Flow and Financial Management
Regular weekly, monthly and quarterly meetings with key decision makers are essential to improve the operational side of the business.
It is then important to ensure that every member of the team is fully aware of the business mission and objectives and to ensure buy in and advocacy and they follow all relevant processes to help the business develop and grow.
4. Creating a Marketing Strategy
There are a number of components to creating a compelling internal and external marketing plan, but I advise entrepreneurs also consider PR and their communication strategy.
Planning considerations should be made about marketing the business as a whole as well as the individual products and services offered, whether your channel is B2B or B2C.
Questions that should be asked include:
- Is the business generally well known or known within the industry/region?
- Is the business considered thought leaders and being innovative?
- Does the business have a core vision and clear positioning?
- Does the business have a unique selling proposition?
- Who is the target audience and where are they?
Creating a Unique Selling Proposition
A Unique Selling Proposition (your story and purpose) for example should be a concise, simple statement about the value the company/product/service brings to customers and what makes it distinct from competitors.
It should ideally be unique and memorable and create an emotional connection with customers.
The content of the marketing message will often be different depending on the channel chosen but it will be taken from the creative insight/thought about the unique selling proposition or brand identity and then brought to life in a brand or marketing campaign platform.
This may be a tactical campaign or part of a wider marketing strategy.
The messaging may be all about gaining new customers or showing love for existing customers and may take cues from the business/product heritage, reputation, uniqueness, state of mind the business is looking for the customer to experience, or linking the product/service with specific events, themes or trends.
It is all about capturing the imagination of the customer to trigger a compelling action.
There are numerous ways to market the business product or service, whether as part of an acquisition drive or inspiring existing customer groups to purchase more.
Creating a marketing mix
The key thing when building your channel mix is to clearly identify the target audience, whether that is business or consumer or both, the message you wish to communicate and map the channels that the target customer visits or consumes.
Once you have defined the above then it is time to think about marketing investment and laying out a clear marketing calendar
Many entrepreneurs use a business coach or consultant to help them get clarity on their business strategy and planning.
The business coach helps them stay on track and ensures they are focused on improving all facets of business performance.
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