“If you really look closely, most overnight successes took a long time.” – Steve Jobs.
Going to business is like going to war. You don’t know which strategy will work, but you need to have one. Because if you don’t have a business strategy, you will be overwhelmed and more likely to quit.
However, if you have a plan, you can respond properly to unexpected situations. And you can avoid unnecessary bad situations.
It would be best if you planned all the way to the end. This guide will help you make a business strategy (from start to end) to survive over the decades.
What is a business strategy?
A business strategy refers to the actions and decisions a business makes to achieve the business goal.
Why do you need a business strategy?
Business strategy will make your business more efficient. You will know your company’s strengths and weaknesses- this will help you make the best use of your strength. Having a business strategy will guide you to make future decisions, like hiring people who fit your business properly.
So, let’s get into, how to make a business strategy:
Set Your Business Vision
“If you don’t know where you are going, you will probably end up somewhere else.” –Lawrence J. Peter.
In June 2006, Yahoo made an offer worth $1 billion to buy Facebook.
At that time, Facebook was not even two years old and had made $20 million in revenue. But Mark rejected the offer.
Because he had a bigger vision, I cannot judge if his vision is good or bad. But I can tell you; your vision can guide you to make brave decisions.
“What is the vision of your business?” When I ask this to business owners, most of them can not answer. However, some of them jokingly said, “I want to make money.”
While I agree that money is one of the most important business factors, I would argue you should have a bigger vision than just making money.
Money is supposed to be the by-product of your business, not the main motivating factor.
So let me ask you the same question, “Do you know your business vision?”
If your answer is Yes, then great, you have an advantage. If No, then no problem, you can find one now.
Your vision doesn’t have to be fancy; it can be as simple as serving tasty food in your local area.
To find your vision, you should ask yourself these questions:
- Why does your business exist?
- How can your business bring value to the world?
- How does your business make people’s life easier?
- What problem does your business solve?
The point is to understand why your business exists clearly. What would happen if it doesn’t exist?
Now it’s time to think about where you want to see your business in 10 years. Set your standard and write down your goal. This will keep you motivated and will set a clear path toward you.
It’s worth it to take the time to think and figure things out for your business. It may seem like procrastination, but it will benefit you in the long run.
When you find your business vision, please write it down.
Then, let your vision guide and influence your decision.
Research Market
Does the market need your product or service?
Before you make money or time investment in your business project, first you need to know if your product or service has any demand in the market.
If nobody wants your product then, unfortunately, it has no market demand!
Sometimes people don’t know what they want. So if you think a product or service can be beneficial, you can give it a try.
Before social media existed, nobody thought they would need it, but now everyone uses it, right?
To enter a market, first, you need to find out if you have any competition and who they are.
If you already have a competition, then congratulations! You have a market, and people want your product.
While many think that competition is bad, it’s not always the case. Sometimes it’s good. You can add a unique perspective and do great in a competitive market. The bigger the market, the better the chances you have.
For example, think of Facebook. When Facebook launched, it had huge competition. At that time, Myspace was the largest social networking site. But now, Facebook is the dominant social media platform.
Google is not the first or only search engine. In the beginning, Google had to compete with Ask, Yahoo, etc to survive. But now Google outplayed everyone, and it’s the most used search engine.
You are getting the idea, right? It’s not that if the market is competitive, then you can’t do well. If you can do better than others, then you can do great.
There are some advantages to being late:
If you are late in the market, you can learn from your competitor’s mistakes. You can analyze what they are doing, what is working for them.
Then you can do things differently and focus on the things that are working for your competition.
But you need to keep in mind, these things are relevant. You need to think clearly to make a better decision.
If there is no competition yet, your work can be a bit harder, but you have the biggest opportunity.
If you are the only one in the market, then you can create a monopoly. But you can also fail measurably because you will need to invent everything and learn by doing.
So take the time to do market research thoroughly and make decisions consciously.
Plan Backward
Now that you have a clear vision and you know your market opportunity. It’s time to make a plan.
The strategy I follow is that I set an end goal and plan backward from it.
At the start, I totally believed in my goal. I don’t let any negative thoughts take control of my mind just yet.
As I practice it myself, I am suggesting you give it a try. Think of your business after 10 years, what it might look like.
What you may think now can be completely different from reality. But the goal is to have a clear path about how you can reach your vision.
Now plan backward from your end goal. Believe you can do it. Then make a step-by-step plan.
- How do you plan to serve the people?
- How do you want to reach them?
- How can you let them know about your product?
- How do you want your customer to feel when they use your product?
- How are you going to manage your business?
You can consider these questions, but you can make your own question based on your business.
What negative can happen?
In life or business, you can’t expect everything to go according to plan. Things will go wrong, and as a business owner, you need to prepare for them.
COVID-19, 2020 pandemic can be a perfect example. Nobody predicted that. The future is uncertain, and you can’t always predict the future right.
So it’s time to note down the negative things that might happen then plan. This way, you can prepare yourself and will not be overwhelmed when things go wrong.
Now is the time to become the person who can face any problem and overcome it. Because as a business owner, if things go wrong, you will need to lead your business.
So based on your industry, what might go wrong? What unpredictable things can happen? When things will go wrong, how do you plan to overcome them?
Plan all the way to the end. Hard times can be overwhelming, and if you have a plan, you can handle it better.
P.S. Don’t let negative thoughts paralyze you.
Break Your Goal into Small Part and Time Frame
You are supposed to have a clear plan and vision right now. It’s time to break down your plan into small parts.
It will make you more motivated and laser-focused.
While having a long term goal is great. You need to break your goal into small parts. For each small goal, you should have a time frame.
As a result, you will easily be able to track your progress.
For example, suppose you want to make $100000 in 2021. Your product price is $200.
To make $100000, you will need 500 customers in 12 months, 41 customers per month, and 10 customers a week.
If your product price is $100, you will need to serve 1000 customers in 12 months, 83 customers per month, and 20 customers each week.
So do the simple math for your business.
Then focus on getting 20 clients (whatever number for your business) in the first week. Reward yourself when you achieve your small goals.
This will keep you motivated.
(Setting mini-goals is the secret of many successful people)
Prioritize your work
When you make a business plan, your to-do list can be huge.
Therefore, it’s crucial to prioritize your work and focus on the most important work.
You will need to ruthlessly element things that are not helping your business. Consequently, you will have free time to think about your business.
It’s better to work on things that will bring profit to your business, right?
When you prioritize, you can use The Pareto Principle. The Pareto rule is also known as the 80/20 rule.
The Pareto Principle states that 80% of consequences come from 20% of the causes.
So, use your energy properly to get the most out of your effort.
Take action
By now, I hope you have a clear framework of what needs to be done.
It’s time to take action and start to do your work.
Very often, the next big things that could change the world don’t exist because we don’t take action.
It’s time to break out the beliefs that are holding you back and start doing.
Think of getting your first client and get started.
Identify the KPIs to Track your business success
When you have a business, you need to measure your progress. To do that, you need to find a key performance indicator (KPI).
KPIs are a set of performance measurements that define how effectively a business achieves its key objectives.
What are the Key Performance Indicators for your business?
Find key performance indicators for your business.
For example, your key performance indicator can be getting 100 sales per month or getting 30 clients per month.
Marketing
Marketing is vital for a business to grow and grow faster. Because if your customers do not know your product exists, they will most likely never buy from you.
Your customers will consider buying your product when they will know about the product.
Your marketing plan can be both traditional and digital.
The main goal of marketing to let your potential customers know your product or service exists. The most effective way to reach your customer is to find out where they hang out.
When you know where your customers are, you can find the best marketing model for your business.
So what do you think is the best business model for your business? Even if you understand, I would suggest you experiment with both marketing models.
The result will show you which one is the most effective for you.
Digital platforms can be a great solution because everyone is online now. So if your business fits for online marketing, give it a try.
Digital marketing is very cost-effective and highly targetable. On the other hand, traditional marketing can be very costly and too much targetable.
Financial Analysis
A business plan without planning money is incomplete. If you don’t have clear information about your financial condition, you can go out of business after a few months.
You should analyze your financial condition to make the right budget for your business.
- What is the making cost of the product?
- Is there any other extra cost?
- What about taxes?
- How much money do you need to get a customer?
- What is your customer’s lifetime value?
- How much money can you budget for marketing?
You need to calculate these things.
Suppose you have a product. You want to sell it for $79.
The making cost of the product is $40.
You have a profit margin of $39.
You need to calculate these things for your business and budget in a realistic way.
Conclusion:
Every business is different, and it is tough to predict the future. While making a business strategy, you need to put your emotions aside and think consciously. Your vision will inspire you; market research will help you to understand the market condition. Negative visualization so that you don’t become overconfident and make silly mistakes and prepare for bad situations.
Small goals will keep you away from unnecessary procrastination. And prioritization will make you more productive. Choosing a time frame will help you to measure your progress more effectively. Then comes the marketing part of deciding how you want to reach your audience. Make a plan for money management so that you don’t go out of business after a few months.
Now it’s time to make your business strategy.