No matter what stage you’re at as an entrepreneur, creating a great strategy will help you focus your efforts and grow your business. Here are 5 things your 2021 business strategy should have.
The first step to creating an effective strategy is to outline your business objectives. Think of your objectives as “results” you’d like to see in your business. Naming your objectives will help you track and measure your progress throughout the year, and it’ll help you focus your efforts in the right places. Click here to read a few examples of objectives for small businesses. When writing down your objectives, remember that they should be “SMART”- specific, measurable, attainable, realistic and time-bound. To learn more about the “SMART” model, read this article.
Your “SWOT” analysis
Once you’ve got your objectives down, the next step is to take an honest look at your business’s “strengths, weaknesses, opportunities, and threats” with a “SWOT” analysis. Even if you’ve done one of these before, it’s important to re-do it periodically and note any changes that’ve happened in the last year. Here’s a guide on how to do your “SWOT” analysis.
Your “plan of attack”
The world of business can be brutal at times, which is why a good strategy should motivate you to get out there and win. The first two steps of outlining objectives and your SWOT analysis are the foundation for the strategy itself. There are different ways to approach your strategy, and these depend on your leadership style, the industry you’re in and other key factors.
Two of the most common “plan of attack” types are differentiation and cost leadership. Differentiation is about providing uniquely desirable products and services in different and creative ways. Cost leadership is about minimising your production and selling costs. You can choose either one, or a combination of these two strategies- depending on what you feel your business will benefit the most from.
A strategy test
While you might not be able to predict the future, there are some ways you can “test” your strategy and predict how it’s likely to impact your business. Remember that a strategy could look good on paper, but not necessarily work out when you try to put it into action. Some businesses hire consulting firms to help them out with this step, but if this isn’t an option for you, here are some steps you can follow to put your strategy to the test yourself. You can also use an “A/B testing“ model, where you put two different strategies against each other to see which one is a better fit.
A strategic framework
The final step is to lay out your business strategy into the framework that represents it best. There are many frameworks you can use in this step, so get to know them and select the one which makes the most sense for your business. The aim of using a framework is to give clarity- think of it as the blueprint for your strategy, and a document you can refer to throughout the year to make sure you’re on the right track.
Despite the challenges that lie ahead for small businesses, a good strategy will give you a fighting chance in 2021. Remember that these ideas are just the start- you can go much further with your strategy, and the more effort you put into it the better. Good luck!