Does your small business need a strategy to succeed?
If you think you don’t need to worry about strategy because you’re a small business, think again. When it comes to creating a strategy for a business, size doesn’t matter. I don’t care if you have a massive team, a small team, or you’re riding the business waves solo. If you want to enjoy the sweet taste of success, your small business needs a strategy.
Businesses without a strategy are setting themselves up for disappointment, and I’m sorry to say it, inevitable failure. So, why is it so crucial that your business has a strategy? And, what does a strategy even mean?
Let me break it down for you.
Planning makes perfect
I’m all for spontaneous fun and ‘winging it’ when the occasion calls for it. There is a time and place for seeing where things take you, but your business is neither of those things. Whatever you do, do not shrug your shoulders and see where your business takes you. Doing that will put you on the fast-track lane to certain failure, so avoid it at all costs.
You need to know where you are going and the only way to know where you’re going is to plan your journey from the very beginning. You need to make sure that you have a strategy in place in your business from the start.
When planning your strategy, prioritise things that will help your business get closer to achieving your overall vision and say no to things that don’t. Another important point to keep in mind is that strategy is not a set of goals. Writing out a list of specific, measurable, and attainable goals is great and I commend you for that. But a set of goals is not a strategy.
So, if a goal in itself is not a strategy, what is?
What is a strategy for business?
A strategy is a set of choices you make in order to navigate through obstacles to reach your long-term destination. You must have a long-term destination in mind. This can also be viewed as your vision or objective for the business. The strategy is what’s going to help you reach that destination by guiding you through the right choices that will help you get there.
A strategy can be different for every business because you’ve got two main sides to consider:
1. The customer you want to serve
2. What you want to get out of your business
Why did you start a business? Do you want a comfortable lifestyle and the freedom to work whenever you want? Or, do you dream of scaling your business and growing it into a massive conglomerate? The strategy you need to implement to help you achieve either of these things will be vastly different.
When thinking about your strategy, here’s what you need to do:
- Decide where your business is headed
- Identify any possible obstacles that could get in the way of you reaching that destination – ask yourself questions such as what are the business’s strengths? What are the weaknesses? Who are we trying to serve (and why)?
- Clarify who your target customer is and think about what you are solving for that particular customer so that you can stand out in a competitive market
- Think about the choices you will have to make to succeed in serving your customers and reaching your destination
3-steps to build a successful strategy for small businesses
1. Diagnose the challenge
The first step in creating a strategy is to diagnose the challenge. And yes, I am giving you full permission to embrace your inner doctor and carry out a thorough health examination of your business. You might discover that the problem is you. Maybe you’re in the business too much and you need to get out of the way and let others help you reach your destination. Or, you might discover an entirely different problem that you never even knew existed. Once you have identified the challenges that stop your business from progressing, you’re ready to move onto the next step.
2. Come up with a game plan
Put your doctor hat on again and think about how you will treat the condition you have just diagnosed within your business. You know what the challenge is, so what is the approach? How are you going to overcome the problem? Your answer could be to hire more people, to remove yourself from the business (not entirely, but you know what I mean), carry out sufficient market research, introduce new products, and so on.
In Richard Rumelt’s book, “Good Strategy/Bad Strategy,” he reflects on an interview with Steve Jobs. Apple was at the brink of bankruptcy after firing him and they took him back as an interim CEO. He talked about the steps he took to get Apple to where it is today. The problem with the company at that time was that it was bleeding cash and the product line was too confusing for customers. They also lacked a competitive advantage.
Steve identified and diagnosed the challenges and then it was time to come up with a game plan. His strategic approach to overcome the challenges included scaling back, cutting down on products, cancelling contracts, and sat back and waited. He also approached Bill Gates and convinced him to invest $150 million into Apple. After all of that, he simply sat back and waited for the next big thing, which happened to be when Apple released the iPod.
Small businesses do not sit back and wait for anything. They often try to make something work (Facebook ads, growing a YouTube channel, etc.) and give up before anything comes of it. Successful businesses are patient and consistent. They make strategic choices and they focus on things they want to say yes to and ignore what they do not want to do.
3. Put actions in place
The final step is to put actions in place to navigate your business towards your destination. This is the stage where goals can be discussed and planned in more detail. Clarify your goals, which are things that you want to achieve. Then, figure out what actions you need to take to attain those goals. You can also add deadlines if you like, just make sure that they fit within the overall strategic framework you have put down for your business.
Phew, we’re finally at the end but don’t worry, we don’t have to part ways just yet. As you may know, I’m on a mission to grow a successful YouTube channel and use that journey as a case study for growing a business. So, if you want to visit my YouTube channel (and subscribe if you’re feeling generous), I would really appreciate that.