If you’ve ever made a jigsaw puzzle, you understand the importance of finding the corner pieces first.
From there you work on the foundation of the puzzle, the outline. Starting a small business is very much like solving a puzzle. If you set yourself up for success with an effective outline, it’s easier to fill in the missing pieces.
Setting goals and establishing a plan to achieve them is the first step for any business owner.
Many businesses lack a good business strategy. They are setting themselves up for failure. Even organizations with business strategies struggle to stay focused on their long term objectives and make the right decisions around resource allocation.
The key is to create a business strategy that can easily translate your goals into practical objectives. Keep reading for our step-by-step guide to creating an effective business strategy.
1. Gather Information to Gain Insight
The first step in creating an effective business strategy is taking a moment to gather the facts about where your business currently stands. You need to know where you are before you can figure out where you’re going.
To do this, you’ll need to review the current business situation and past performance. By evaluating each area of your business, you can see what worked and what didn’t.
You’ll also have a better idea of what opportunities the future may hold. It’s important to look at both internal and external factors.
What are your strengths and weaknesses?
What factors beyond your control present risks and opportunities?
A popular strategy for gaining insight into the external factors that affect your business is the PESTLE framework. Using this model, you will evaluate your business and which threats and opportunities might arise under each of the following categories:
Another strategy for business analysis is the SWOT method. Using this model, you will evaluate:
2. The Vision Statement
Next, you should create a vision statement that outlines the future (medium to long-term) direction of the business. The goal here is to capture the purposes and values of your business.
The vision statement should be created in conjunction with the mission statement.
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3. The Mission Statement
Your mission statement should identify your purpose, but it should also describe your goals.
The mission statement focuses more on what you will do in the short term to achieve your long term goals. You want to describe what you do, how you do it, why you do it, as well as how your organization brings value.
4. Set Strategic Goals
This step is all about developing high-level objectives for all areas of your business. These objectives, or goals, should focus on your priorities and guide your short-term plans to make sure your mission and vision are successful.
At this point, you should refer back to step one. You can incorporate your newly discovered strengths and weaknesses as well as the results of your SWOT and PESTLE analysis into your goals.
Your goals should follow the SMART model. That is, they should be:
Your goals should also include factors like budget requirements, resource allocation, and Key Performance Indicators (KPIs).
5. Develop Practical Solutions
We’ve reached the step in the strategy development process where we start to figure out the “how.”
How do you take the strategic objectives you’ve outlined and turn into practical short-term plants?
What actions do you need to take in the immediate future and on a daily basis to meet your business goals?
The plans you create at this stage will detail what actions the departments in your organization and even your suppliers need to take to achieve your goals. Your focus should now shift to actionable objectives. Tactical plans at this stage are more like short sprints to execute your strategy in practice.
You’ll also communicate to stakeholders what they need to do and when they need to do it to meet the newly set business objectives. You might even create a press release to advise customers and investors of your new initiatives.
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6. Evaluate Your Success
Part of developing a successful business strategy is continuing to monitor and evaluate its success. While you may think the hard work is over, this may not be true.
To stay on track to meet your overall goals it’s important to continually manage your strategy. As you can imagine, managing your strategy can be complex. You must capture important information, break it down, evaluate it against your overall goals and stay focused on the strategic vision.
Many companies are looking to alternative methods for handling business development strategies because of their complexity. These include consulting with business management professionals.
We Can Help You Develop an Effective Business Strategy
As we mentioned before, starting a business is sort of like completing a puzzle. Just like when you start a puzzle, you start with the corners and then the outline, creating a business strategy provides an outline for your business to follow.
You don’t want to just jump into the middle of the puzzle.
Developing an effective business strategy is just the first step. Any successful business strategy requires a comprehensive marketing plan to reach its goals.
We are a team of marketing professionals ready to help your business with all of its marketing needs. Contact us today to learn more about what we can do for you.
Check out the rest of our website to view our products and services like this one, designed to help develop your brand.