#1 Way for a Small Business to Succeed (Part 1)
Updated: Dec 19, 2018
As an entrepreneur, and wife of an entrepreneur, I understand the challenges of strategic planning while being under the pressure of sustaining a business, firsthand. Start-ups, non-profits, small and medium sized businesses often find themselves putting strategy on the back burner, or worse, keeping it in the steel trap. This is especially true when designing a strategy isn’t something you do often, or when your business has scaled to a place where you no longer have capacity to do it yourself.
When you have bills to pay, a business to run, and employees to look out for, strategic planning can seem academic or unnecessary. Most small business owners I know find growth and marketing tactics to be more exciting and tangible than strategy formulation. Of course! They generate ROI and results more quickly than following a strategic plan. Right? Sometimes they get you “there” faster, until you find out you’ve arrived at the wrong place.
Recently, a client came to me for help because he had made the mistake I described above. He went into rapid growth mode without a clear strategy. He launched marketing tactics, taking all potential customers, for the sake of rapid growth. It worked, until he realized he had unintentionally acquired too many commercial deals, which limited his capacity to serve his more profitable customer: the direct to consumer market. Terminating his commercial engagements was too big of a legal and brand risk. He had to forego growth in his ideal segment, simply for the sake of damage control. Worst of all, he was disappointed and lost some of his mojo due to the setback. Although we’re a resilient group, losing mojo is one of the worst possible outcomes for an entrepreneur!
Starting with a clear strategy would have allowed him to:
Identify the best target marketSave marketing dollarsCreate an ideal balance for the best profit marginStaff up for the right skills
Growth and early marketing tactics are exciting and shiny. They appear to generate ROI and tangible results more quickly. On the other hand, the benefits of strategy may not be visible or quantifiable right away. (Oh - but they are, when you know where to look!) When you put strategy first, you are putting your bottom line first. You are putting your employees first. With a well articulated strategy you’re not only setting your business and employees up for success, you’re saving more time and money than you think - more quickly than you think. That is, if you’re doing it right.
If you have a strategy, or your old business plan, it’s a great time of year to dust it off and update your assumptions. If you don’t have a solid strategy, or it needs work, call a pro to help. Fortunately, I’ve had the advantage of learning from successful companies. I’ve seen what works, and how to make strategic planning manageable for businesses like yours and mine, which is why I founded Strategy Rocket. (More to come about small business strategy done well in Part 2 of this series.)