Eyes on the prize: the art of business strategy

In military-speak, the word strategy relates to the tactics used by a general to defeat an army. Although this might seem worlds away from your business, you should not underestimate the impact of good strategy on your company's success.

War tactics aside, business strategy is simply the implementation of a business plan to achieve a company's objectives. However, this seemingly straightforward concept often spells the demise of SMEs. In fact, a recent Dun & Bradstreet (USA) survey revealed that the lack of a clear business plan was the number one reason for business failure. In addition, a recent report by the Australian Institute of Company Directors confirmed that nine out of ten companies that have strategies in place do not execute on them properly.

But, when it boils down to it, business strategy is simply thinking before acting -deciding what you want to achieve as a company and working out the steps you need to get there. The following concepts should be kept in mind when developing and executing your business strategy:

Don't plan to fail

As the saying goes, a failure to plan is a plan to fail. A survey by RSM Bird Cameron found that a general lack of planning was an issue faced by the majority of Australian SMEs, with 74 per cent of respondents unable to produce a current business plan and a further 88 per cent without a succession plan.

As a business, it is crucial to take stock of where you are as a company and where you want to be in the future. A good plan should be realistic and achievable and clearly highlight the sort of revenue goals and profit margins you want to achieve within given time periods. Your strategy should account for current resources and consider the issues that your business faces, including the economic climate and seasonal pressures.

A plan that thoroughly documents your business strategy and revenue goals can be easily transformed into a solid financial proposal in line with the requirements of most financiers. Business strategies are by no means fixed and should be regularly reviewed as the focus of your company evolves.

Find out more about developing a business plan >>Find out more about developing a business plan >>

Get your priorities straight

It's easy to get caught up on the daily treadmill of running your company without understanding how your everyday tasks fit into the bigger picture. This is why it is vital to identify your priorities and values and determine whether these values are reflected in your current strategy. This is particularly important for new SMEs who are often unsure of where they fit in and struggle to stay afloat.

However, these early crises are essential to working out what you want your business to be. You will benefit from a period of soul searching and questioning. Does your business pride itself on providing a high level of customer service? Maybe efficiency is your guiding principle, or you aspire to be an innovator operating on the cutting edge of your field and setting the stage for new industry trends. Once you establish your value proposition, priorities become clear and the foundations for business strategy fall into place.

Get to your destination

A business strategy is essentially a road map - its main purpose is to get you to your destination. This is where your vision becomes the driving force of your business. Staying true to your vision makes difficult decisions clearer and helps establish the most effective strategies for your business. There are many things in the commercial world that may compromise this vision, but the most successful companies use business strategy to tackle these challenges head-on. A map can't always identify the potholes and dead ends but, it will always help you get back on the road.

Business strategy is at the core of a strong, successful company. It equips you with a game plan and sets the direction for the future. Business owners should not shy away from strategy, but consider it vital to the health of a company. The worst kind of strategy is to have no strategy at all.

Find out more about developing a business plan >>

 

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