For many business owners, business success is brought about by hard work, determination and understanding what you are good at and, just as importantly, what you’re not good at.
Business plans, budgets, cash flows and risk reviews are just some of the many components of running a business, and it’s important to understand how these tools work within conjunction with your overall business strategy.
Let’s start with defining the business plan vs. the business strategy. A simple way to differentiate between the two is that the business plan is what your business does and how, while the business strategy is the why.
There are many great books, academic research articles and tools available to help business owners understand their core business competencies and derive a business strategy.
The subject of business strategy has many experts, but most ask the business owner some common questions, including:
- What is your customer value proposition or unique selling proposition?
- Why should your customers use your firm, products and services versus those of your competitors?
- What is your business model – where is the value for stakeholders such as owners, customers, the community and your staff?
Many elements of business strategy are organically created. However, through sound advice and guidance, you may be able to shape or frame your strategic advantage or test the strategy that you have in place.
The importance of having a business strategy cannot be overstated, it is a critical part in your planning process for your business success. It’s worth taking the time to work out where you are going and look forward for the business further than the immediate horizon.
Seek professional advice from your accountant, lawyer, banker or business mentor to test your answers to some of these questions. Use your links to professional industry bodies, business networks (such as Business Matters events), local Chamber of Commerce, your customers, your staff (are they engaged to your strategy?).
Like any plan or strategy – it serves no purpose gathering dust in your bottom drawer. It must be a living and breathing document, so visit it often and make it work for you. After all – why are you doing what you do?