A strategy is a plan of action specifically designed to achieve a predetermined goal. Business strategy requires an executive approach to defining and solving the marketing, design, production, and financial problems that may prevent you from achieving your goal. However, creating your basic strategies may not require a time-consuming and arduous process, just as communicating your strategy does not require writing a very lengthy and complex.
If you go to the Business and Economics Department at any large bookstore, you may find hundreds of books written on business strategy. Many of them are well-written and effective. A few such titles are listed in the recommended reading list in this book. Below you will learn 7 essential things in developing a sound and proper business strategy
1. Business Vision
You can describe what the business is that you want to build, but you must also understand what makes it the right business for you. Determine the skills and experience it takes to make the business successful. Which of those critical factors are among your greatest talents? Which of those factors are also the tasks you love to do, twenty-four hours a day, seven days a week? The business that is right for you fits your individual expertise and your personal motivators.
2. Personal Values
Examine your personal values in order to set meaningful goals and objectives for your business. High-growth, high-reward, high-risk enterprises are not for people who value security, stability, and tranquility. The prospect of working eighty-hour weeks may not appeal to those who have lifestyle and family considerations. Issues concerning political, religious, philosophical, and economic beliefs will have a major impact on company policies, goals, and strategies. Acknowledge what is important to you so that you can build your values into your business.
3. Goals
When you understand what your business is and how you fit with it, you can set goals. Given the market opportunities and your personal values, how large could your company become? How profitable? What is the time frame for accomplishing all this? How will you and the company’s other stake- holders benefit from these accomplishments?
4. Market Definition
Market issues make the difference between success and disaster. Identify a problem and identify the specific groups of people who have the problem. How much pain do they feel? The greater the pain, the greater the value of an effective solution. How does the market currently solve this problem? Every possible solution—including ignoring the problem—represents your competition.
5. Business Model
This business model does not refer to the wheelbarrow-sized pile of financial projection spreadsheets that your favorite number cruncher produces. Instead, it refers to how your company operates. It includes the extent to which the people on your management team are full-time employees, part-time employees, or consultants. It includes whether you manufacture your own products—domestically or elsewhere—or contract it out. It includes whether your salespeople are employees or outside representatives. It includes your marketing approach—how you advertise, attend trade shows, and use direct mail and email, infomercials, telemarketers, and other aspects of your business. Not all of these decisions are made at start-up; however, the issues and possible alternative solutions should be identified.
6. Resources
So far, you have articulated your vision, acknowledged your values, set your goals, defined your market, and determined your economic and business model. The next strategic focus is on the resources you require to put the enterprise in motion and grow it through each of your milestones. There are three types of resources—people, facilities and equipment, and capital. You already know the skills and experience sets that are necessary to make your business successful. Your management team and board of advisors will guide you in determining the methods of staffing your start-up. They will plan the growth of your organization so that you have the appropriate quantity of skilled and experienced managers and employees to support your growth. Your team will also determine the selection and timing of facilities, production equipment, office equipment, computer systems, and other assets necessary for everyone in your organization to do their part. Finally, your financial advisors will help you determine the amount and types of funding you need to finance your growth.
7. Organizational Structure
As part of the planning process, you will need to determine which type of entity best supports the achievement of your goals. Input from your management team, as well as legal and other advisors, will help in the decision-making process.
