5 Key Elements Every Business Strategy Needs to Have
Succeeding in a competitive and complicated world of business requires a lot of strategies.
You need more than just an exceptional idea of what to sell and a good insight into the target audience that you will be reaching if you want to excel today.
It’s also essential for business leaders to understand what they need to do to get from point A (launching their business) to point B (running a successful company).
A business strategy can help you do that.
Business strategies are documented plans that highlight how an organization can achieve its goals. The plan contains key elements on how to execute long-term aims and remain profitable.
If you’ve never created a business strategy before, here are five of the items you need to think about.
1. Mission, Vision, and Aspirations
A mission statement is essentially your overall reason for why your company exists and what it hopes to accomplish.
Usually, it will include an outline of the goals that you want to achieve with your organization, and how you’re going to fulfill them.
For instance, if you’re planning on changing the world by giving people access to more recyclable drinking bottles, how are you going to get to a point where customers will want to use your products over the options that already exist?
Your vision statement may also include an idea of what you want your business to look like five, ten, or fifteen years from now. You might start as a small company, but eventually, you might want to transform your organization into something much bigger.
To help guide the steps you take to achieve your goals, you can also outline “core values.” These are the “musts” and “must not” guidelines that your company needs to follow.
For instance, you might decide that you “must not” do anything unethical that might harm your customers.
2. Financial Projections
Financial projections can be one of the most challenging components to consider in a business plan. That’s because it’s difficult to know for certain how much money your company is going to make now and in the long term.
To get started, all you can do is examine the market that you’re going into, and make predictions based on things like pre-existing customers, and potential market size.
If you’re concerned about not having enough money to grow your business initially, then your financial projections may also include an insight into the kinds of debt and capital that you’ll need to look into.
For instance, are you planning on selling equity in your company so you can afford to expand in the next few years? Do you need a loan to get your company off the ground?
3. SWOT Analysis
A SWOT analysis is another crucial aspect of your business strategy and the key element that you’ll be using to ensure that you can outshine the competition in your industry.
A SWOT analysis involves looking at the strengths, weaknesses, opportunities, and threats around your company. For instance, a strength of your business could be that it’s eco-friendly, or that it offers excellent customer service.
A potential weakness might be that your prices are higher than the ones that your competitors can offer, or that you don’t have a lot of presence in your industry, to begin with.
With a SWOT analysis, you can focus on figuring out how you will harness and leverage your strengths, while gradually overcoming weaknesses and threats.
All businesses have weaknesses to consider, and there’s likely to be several big threats that you need to overcome when you’re in the initial stages of growing your company. Still, your business strategy will help to guide you to success.
4. Strategies and Operational Tactics
Your long-term objectives and strategies are going to highlight what you need to concentrate on if you want to make your vision of the future into a reality. These objectives usually have time horizons that expand over several years.
Under the concept of “general strategies,” you’ll be able to group the various means that you’re going to employ to eventually achieve your objectives.
There are a lot of methods of growth that businesses can consider today. You might decide that you want to work with specialists to build your business from the ground up.
As your company moves forward and evolves, you may decide that you want to use strategic acquisitions and mergers to open new doors and discover different opportunities.
Don’t be afraid of allowing your strategies to change if necessary.
5. Security and Backup
This is an often overlooked part of the business strategy. However, you won’t be able to accomplish much in this competitive world if you don’t have a way to protect your business and the investments that you’re making. In today’s digital environment, that includes having a system in place for disaster recovery and data backup.
Scrutinize your business and ask yourself whether there are any specific threats that you need to be aware of, and how you’re going to protect yourself from them.
How will you keep the information that you gather safe, as well as your customers and clients?
Business strategies can be time-consuming and complicated. However, once you have them in place, they’re an excellent compass that you can use to guide your business towards success.
Your business strategy will be an essential part of not just your initial business launch, but everything that you do to grow for years to come.
Heather Redding is a part-time assistant manager, solopreneur and writer based in Aurora, Illinois. She is also an avid reader and a tech enthusiast. When Heather is not working or writing, she enjoys her Kindle library and a hot coffee. Reach out to her on Twitter.