Strategy for most small business owners is seen a “bad word”. In many cases, rightly so as theyhave been visited by many a consultant that has told them they need a strategy document. They then engage the consultant who spends a few hours in their business and then writes a four hundred page document that is used as a paper weight or sits in a drawer collecting dust. In many instances afterreading the document, they are not even sure this document was written for their business. They often produce outcomes that are not relevant or achievable for the business owner. The consultant fails to recognize the economic realities that small businesses operate, such as there is not an infinite amount of resources and money available to the small business owner.
Strategy is a very broad term and if you look up the definition, there are several. The one that is the most relevant to what it should be for a small business is “a plan of action designed to achieve a major action or goal”. The synonym “blueprint” is one that is a more exact way to describe whata strategy should be. It should be a master plan for your business.
Every business shouldhave an overall business plan which should contain the overall business strategy for their entire business. The problemis they are usually done at the start of the business or when the business requires funding, but then are never looked at or updated again. The problem with that is the business moves forward and changes from the original plan... The business plan should be the overall strategy for your business and contain all of the major sub-strategies such as Human Resources, Finance, Operations, Sales, Marketing, and depending on the company type - Development as well.
A strategy or blueprint should not be general in nature. Everything should be specific for the individual business. Even within an industry or vertical, there are factors such as geographic location, size of market, and other parameters that may make that business unique. A strategy should not be a document that someone approaches you to write independently for your business without the interactive involvement of the business owner and each department or individual who is involved in the success of that function.
Within the business strategy, there should be goals that are set by the business owner. A goal could be the overall business achieving 30% growth over the next 2 years, or it could be the business owner wanting to sell the business in 10 years and defining the revenue figure that is desired. The overall business goals then help determine what the individual departments are going to need to do in order to meet the overall business goals and from there they then can set their own goals and action plan for themselves and their group. For example, sales may determine that in order to meet the 30% growth figure, they are going to have to make on average 10 sales a month with an order size of $30,000. Marketing may determine that in order to reach 10 sales a month they are going to need to help sales produce 100 leads a month. It may also require that you have 4 sales reps to meet that goal and you only have 3 today. There may be individual goals for a department that are independent, but most of the goals will be intertwined with other groups so it is important that everyone is involved in the process. In small businesses, the department may be one person or may even be an outsourced function, but all need to be taken into consideration.
Once goals are set, then it needs to be determined how you will measure progress what tactical means are going to be used to meet the strategic goals. This also differs from business to business. A good example is that every company needs a website today because a majority of your prospects are researching information prior to calling. The caveat is that the type of website you have and the look should be quite different than another business. There is quite a bit of difference in a retail website and an industrial one where the customer is most cases is not an end consumer. So in your strategy you may have that you need a website and you need to generate a set number of leads from your site. The tactical side is how you go about doing this.
Within the strategies for your business, you need to be able to measure and quantify your success and failures and document it. Current goals may need to be adjusted. In our example, the company did not meet the 30% growth, they only met 25% because they were not able to hire a 4th sales rep for 6 months and there was a 3 month learning curve. The change to the strategy may be as simple as moving the date out for the achievement of thegrowth and tracking again now that the sales rep is on board to see that the goal is met.
Having a four hundred page strategy document that is a paper weight does not serve any good to anyone and unfortunately is what keeps many small businesses from thinking they need business strategies. Small businesses can change and implement change a lot faster than a larger business so it is important that their strategies can be adjusted and measured, because if results are not occurring after a period of time, changing a strategy or even relooking at the goals are much easier to do.
One strategy document that should be constant in a business is their business plan that sets the overall business strategy. If the time arises that there is one particular piece of your business that needs to be looked at specifically and in more detail, then that is perfectly fine. An example might be your sales strategy if you are considering adding a channel component after being a direct only company. It would make sense to have a separate sales strategy plan to define and to address those particular goals, but it should then become part of the businessplan or the business plan needs to be altered to incorporate that change in direction and reference the new sales strategy plan.
This should not be an onerous task as you have a business to run. This should be something that is looked at quarterly and adjusted only if necessary. By setting goals and measuring success within your business with the involvement of everyone that has a role to play, you as a business owner will find more buy in and commitment from your whole staff to help with the overall success of your business.
If you were someone who felt strategy was a consultant’s way to charge you for generating a mountain of paper that you were not able to use, you are not alone, as the word strategy is a very overused and general term. If you as a business owner along with the stakeholders in your company were not fully involved, this was not a strategy for your business. You most likely paid for a general overview document on general strategy for companies in your industry not taking into account the specifics of your business. Any strategy, whether marketing, sales, or operations is specific for a business and cannot be generalized.
In : Business Practice
Tags: "business strategy" marketing strategy" "sales strategy" "channel strategy"
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