What Is The Point Of Strategy Anyway?
Jun 25, 2018
“How does having a business plan and a strategy help you run your business anyway? Isn’t that just for city slickers or bigger businesses? This is the real world here - I am way too busy for that shit.”
This is a very common view of strategy and planning from the average business owner. And it is heartbreaking.
Here are some interesting questions that every business owner needs to consider…
- What is your break even point in dollars every month?
- How many jobs do you need to do to make enough profit to cover all your expenses and break even?
- What money will you have available next month to promote your business?
- What about every month through the winter?
- What exactly about your business are you promoting?
- What is your compelling offer - your reason why your customers will choose you over everybody else in your town?
- How will you achieve the maximum competitive advantage in your local market?
- What resources do you have to utilize to help you get there, and how will you organise them and yourself to deliver an efficient and profitable service that pays you well?
- What funding may you need to buy the resources you need to just be in business, and where will that injection of money come from? Will that be a one off or a regular monthly cost?
- Why are you even doing all this in the first place?
Every day, millions of business owners are getting up and going to work in their business based purely on gut instinct. They are learning through experience, trial and error, with little or no attention to strategy or business planning. Many spend more time planning and budgeting for a vacation than they do thinking about their business sustainability.
Few business owners have been trained in strategic / business planning. So as a consequence, many business owners struggle to achieve their ambitions for profit, growth, sustainability and ultimately the lifestyle and freedom they wanted when they first started.
There is no mystery to strategic business planning at all. It is largely a creative process, generating and accommodating new ideas, and seeing existing situations from new perspectives, but always ensuring the roots are planted firmly in reality.
Producing a strong strategic business plan will in itself maximise the chances of business success by focusing your attention on supplying what customers really want and by providing a clear route map to show the way.
Over-simplified - there are five main things to consider when drawing up a basic strategy or business plan.
- Your Vision - this is so very basic - it is what you actually want for your business - do you want a lifestyle business from day one, do you want to grow to become a multi million dollar business over time? Who do you want to serve? This is designing your lifestyle, and then designing and building your business around that lifestyle.
- Value Creation - simply put - there is nothing you sell that I can’t get off any street corner in your local area. Nothing. Everything is a quick Google search away. So why would anyone give you their money - what makes you so special? If you don’t have this thought through then you are destined to a life of mediocrity. Be sure of your value.
- Claiming Your Market - once you have your simple compelling offer, then you need to take it to your local market. How will you do this? What routes to market do you currently have? What other options are there? What about branding? Marketing? What is the cost of acquiring a new customer? How will you convert every new customer inquiry into a sale? The name of the game here to find repeatable systems to attract, catch and keep new customers on a predictable basis.
- Repeatable proven systems - for any business to survive let alone grow, identifying what works efficiently and then ensuring you build a process around that is not just beneficial - but critical. It will also allow you to drive further efficiencies as you constantly review and improve what you are doing. Do you have a proven sales process? What about a follow up process? Most business owners don’t have a proven well thought through strategy for answering the phone.
- Consistent Implementation of profit generating activity - this means setting some targets - what will you measure? What will you actually need to do each day to achieve your goals? Is everything you are doing cost effective and profitable - have you considered the complexity of delivery against the profitability of each job? Does everything you do actually add value or dollars to your bottom line profit? What you actually do must be outcome driven - not activity focused.
Simply Put - if you don’t know your numbers, your customers, your market or your processes then you are flying blind. You need to have an Action Plan so that you can put your plan into action.
Otherwise you are on a plane with no destination, no steering or landing mechanism and no real hope of ever getting anywhere apart from eventually crashing and burning.
Not taking time out to think this through properly will be the reason you are not where you want to be.
Stop working 16 hour days - take just one day off to work on your business - so that you can build something that will provide the lifestyle you want.