The past few weeks we have been gathering information to arrive at a SWOT analysis for the business. Internal weaknesses and strengths as well as external opportunities and threats need to be identified and addressed in order to improve the effectiveness of the company and for the business owner to be able to take strategic decisions for the future. What strategic options are available? In the first place it is important to realise that deciding on a strategy is above all deciding on what is practical and possible. An appropriate strategy will be different for each business and change over time as internal and external factors change. The following options are available:
Do nothing. This is only an option if you are convinced that you will continue to be successful, doing exactly what you are doing now.
Improve what you are doing now. For example improving your quality or customer care.
Expand the business. By taking your products and services to new customers or by developing new services to your existing customers.
Diversify or innovate. This means developing new services for new customers.
Whatever decision you make, it will be an appropriate decision only if it will help you gain ground on your competitors, while taking into account the environment in which the business operates and the resources that you have available.
Once you have decided what the strategy will be, it is essential that you communicate this to everybody in the business, as a first step in putting your strategy into action. Next you will need to capture the strategy into a business plan for the coming year. The business plan can be used for instance to find additional financial resources but also to monitor progress in achieving results. A business plan could look like this:
Introduction to the business.
1.1. Details of the business.
1.2. Principle activities of the
1.3. Organization of the business.
2.1.The overall market for the
2.2. Target market segments.
2.3. The competition.
2.4. Your Unique Selling Point (USP).
3.1. Analysis of costs.
3.2. Cash flow forecast.
3.3. Projected profit and loss account
for the current and next year.
3.4. Break even calculations.
The business plan is a route map for the immediate future and a working document, which indicates the core objectives and activities. It is the first step into the next stage of growth of your business.
Below now follows a summary of the main issues we discussed over the past 5 weeks in respect of strategic planning:
Focus. Step back and take time out. While continuing addressing the short-term administrative and operational issues, you ignore the big issues in your business.
Objectives. Make your business objectives explicit and communicate them to all your workers.
Market. Identify your core business activities and key markets.
Customers. Know your customers and provide services that they want. It is easier to keep existing customers than to find new ones.
Finances. Determine and monitor the key financial statistics for your business.
Quality. Only the best is good enough. As owner of the business, be a role model to your workers and demonstrate commitment to delivering high quality services and products.
Workers. Be aware that if you don’t know where the business is going, neither will your workers. Consider personal development and training needs and be aware of the benefits of a simple performance appraisal system.
Communicate. Be approachable and break down communication barriers. Communication is essential for the workers to do what you expect them to do.
Be flexible. Look for new opportunities always. Recognise workers who suggest useful ideas.
Finally, we saw, that to arrive at a strategic business plan, information needs to be gathered and considered in a SWOT analysis. This will take time and energy and may reveal unexpected outcomes. You may be confronted with some real challenges. Don’t let this discourage you. Look at it as an investment. There are long term benefits in working through and resolving what could otherwise be long term and unresolved challenges for you and your business.