Last week, we launched a new series for small business owners aimed at helping you build a business strategy that will set your small business on the path to success in 2023. Last time, I talked about 7 reasons why you need a small business strategy. In this article how do you do Share 6 steps to building a business strategy.
Before we start, let’s make one thing clear. “Fly it” is not a strategy! Yet, too often, we talk to business owners starting new businesses or expanding into new markets who have no idea of their target customers, value proposition, etc. Outlining your plan, creating a roadmap, and figuring out how to get the funding to do it all is the only way to be successful. Having a vague idea of what your business needs is not the same as developing a careful strategy. And even if you’re currently planning, this series (and especially this article!) will reveal a thing or two you may have missed. So check out the tips below and stay tuned for Part 3 of this series. Here are the top reasons why small business strategies fail.
Six steps to building a business strategy
If you want to build a business strategy, follow these steps that walk you through the key elements to creating a strong plan to guide your small business.
1. Check your business performance
The first step in building a business strategy is knowing your starting point. Looking at past business performance and current state gives you a baseline to build from. Look at something like this:
- revenue
- customer list
- Average revenue per transaction
- Most popular product or service
- market position
- employee
- sales process
- Profit rate
- customer satisfaction
When checking each area, SWOT analysis (Examine strengths, weaknesses, opportunities and threats). Bring your team together to get feedback in each area and make sure you have all the information you need to accurately assess the current state of your business.
2. Consider external factors
In addition to seeing what’s going on inside your company, you need to see what’s going on. outside that too. When building your business strategy, you should consider external factors such as:
- industry trends
- government regulation
- compliance
- Political policy (tariffs, etc.)
- technological progress
- environmental concerns
External factors can be viewed as opportunities or threats depending on their impact on the business.
3. Create (or align) your vision statement
A vision statement answers the question, “What do you want your business to look like in the future?” What are your small business goals when building your business strategy? In 2007, I had a bold vision of becoming America’s number one small business expert. Be bold with your vision statement! Your vision should motivate you. You need to explain what you want people to know and guide the future direction of your business.
4. Create (or adjust) a mission statement
A vision statement explains where you want to go, while a mission statement explains why you want to do it. What is your business purpose? what drives you? For example, my mission is to “end small business failure”. It explains the purpose of my business and the heart of my “why” story. Similarly, your mission statement should answer the following questions:
- what do we do
- who do we serve?
- What kind of problem do you solve?
5. Set goals
Now that you have a better understanding of small businesses in surveys 1-4, you can now use specific objectives (goals) to build your business strategy. Consider the following when setting goals:
- Make sure your goals are SMART (specific, measurable, achievable, realistic, time-driven).
- Each goal should have KPIs (Key Performance Indicators) to help measure progress.
- Budget and human resources must be allocated to achieve each objective.
- You should set goals for each area of your business
6. Plan your execution
The final step in building your business strategy is to incorporate everything you’ve done so far into your execution plan. You’ve done everything on this list, but you won’t see results until you complete this step! So how do you reach the goals you set?
- Clearly define roles and responsibilities for everyone on your team.
- Update critical processes (for example, deliverables and reports may require new processes).
- Add technology as needed to keep everyone working and make it easier.
- Develop a plan to clearly communicate information and updates, such as weekly staff meetings and new project management software.
One more thing you need to build your business strategy…
By following the six steps above, you’ll be able to build a business strategy that will take your small business to the next level in 2023. But you also need to avoid the pitfalls that small business owners often fall into when planning or executing a strategy. That’s the topic of my next article, so stay tuned!
Do you have any tips to help small business owners develop a business strategy? Share them in the comments below!
