Any real business should have a business strategy documented no matter how basic. You may roll your eyes and say – “Just what I need, another document that won’t be looked at!”.
I agree that some strategies can be so complex and hard to navigate that they are not referenced at all. This is an issue in more ways than one.
Even a small business (I’m talking one person operation or consultancy) needs a point of reference. When you first decided to go into business for yourself the motivation probably stemmed from an idea. An idea and four dollars will buy you a cup of coffee…
What you need to implement the idea is a strategy, followed by action.
A business strategy does, amongst other things, the following:
- Links your business idea and your assets
- It provides focus
- It allows testing of assumptions
It Links Your Business Idea And Your Assets
To create your business you will need to identify and list all of the resources and assets necessary to bring the services/products to life.
There will be capital required in the form of money and human resources to perform the roles envisioned. You may need signage, premises, advertising, suppliers and distributors.
How will you deliver your services cost effectively? What competitor weaknesses will you exploit? Who will your alliance partnerships be with?
It Provides Focus
Once you have a documented statement of your business idea and what assets are required, you have a representation of your “business model”. This allows you to extend, crop or in general play with the basic components.
Capture all these thoughts whirling inside your head in one document enables you to reference the one single repository of your strategy. Having a documented strategy means you can share it easily with others.
It Allows Testing Of Assumptions
Once all the assets of you business are marshalled into your business strategy you can then test assumption such as:
- What impact will adjustments to service fees have on forecast revenue & profit?
- Let’s see what happens if we change how the services are delivered (utilising say the internet to deliver certain components of the service)
- What if we used another channel for our customer support?
Business strategies can be as simple as a one page document for a small business. It is not so much about how big the strategy is – it is about the learning process you go through when developing it and becoming aware of your businesses strengths and weaknesses.