Plan for success
A business strategy is a plan to help you make the best decisions for the future of your business. Your strategy will guide your business to achieve its objectives and connect your people and activities to clear goals.
A good business strategy means understanding the external factors that can affect your business. It includes understanding how your market works, and what can affect your business or its point of difference, so that you can keep ahead.
A strategy creates a shared sense of your mission, helping everyone in the business understand what you’re working towards.
With a clear business strategy, you can make sure that everything you do fits the overall plan.
Strategy is good for business
Having a clearly defined strategy to meet your business goals can help you:
- prioritise work
- make the right decisions
- plan activities to meet your goals
- expand into innovative products or services
- say ‘no’ to distractions
- make the most of your position in the market.
A business strategy can also help you explain your business to your employees, networks, mentors, advisors, accountants, borrowers and investors. If you’re facing competition, creating a strategy helps identify your advantage and your ideal position in the market.
Without a clear business strategy, you could make decisions that conflict with each other or negatively affect your finances.
Other strategic activities that are important
Your business strategy considers everything that might affect your business. You’ll also need good governance and a clear vision and mission.
Governance
Governance provides checks and balances for your business, and expert advice to keep you on track. Good governance can help you implement your business strategy by ensuring you’re following your plan and checking if anything important has changed since you set it.
Vision
Your vision involves describing what it will look and feel like to achieve what you want with your business. Vision statements focus on tomorrow and can be a starting point when you start working on a strategy, to help you stay true to your motivations.
Mission
Your mission defines what you want to achieve, in a way that you can break down and measure. Your mission focuses on today and what you do to head towards your vision.
Look inwards, outwards or both
Some strategic models look at your market and competitiors, while others look at finding the value in your business. After looking both ways, you may find you can create your own space in the market.
An outwards, competition-based strategy is about looking out and figuring out where you fit in the market and where you want to be.
An inwards, business-centred strategy is about looking inwards at your business to identify your strategic advantage. This type of strategic focus is based on your assets, capabilities, strengths and weaknesses.
As things change, you might need to switch between a strategic focus that looks inwards and one that looks outward – or use a mix of the two.
Create your own space in the market
As a small business, instead of trying to compete with bigger businesses, think about how you could create your own space.
Find out what your customers appreciate about you and your product or service. How could you make the most of this uniqueness to attract new customers? Bigger business can take a longer time to adapt to a changing market.
Make the most of your ability to change course quickly and capture any new demand.
What's next
Business planning
Choosing the right business structure
Business and financial advice
Governance
Marketing strategy
Strategic finance
Innovate and collaborate
Building a brand
Doing business online
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