A business strategy is a fundamental tactic or combination of tactics to hit goals such as growing the business, gaining a competitive edge or turning around an ailing business. Your business strategy is brought to life by creating a business plan. Business strategies are essential for your long-term direction and success.
What are the different types of business strategies?
There are many different business strategies for a small business and some of the common ones are:
- Cost advantage strategy: This is where you focus on offering the lowest cost in the market.
- Volume strategy: This is where you focus on getting high volumes of sale at a smaller profit margin.
- Niche strategy: Your business focuses on a narrow but in-depth area instead of a wide range of product, service or customer.
- Bespoke strategy: You tailor your product or service to your customers, commanding a higher price.
How to develop the best business strategy ideas?
In order to develop the best business strategy ideas, you must do a comprehensive market research, study your competitors, utilise new technologies and take inspiration from big brands or small businesses from other industries. If in doubt, hire business advisors and coaches to refine your business strategies.
How to write a business plan?
A typical business plan projects between 3 to 5 years ahead and is constantly being updated, refined and reviewed to reflect the current position, direction and goals. There are several common elements in a business plan.
- Executive summary:Like an introduction or overview, your executive summary is usually a 1-page snapshot of the overall business plan. A good executive summary should be detailed enough to give an investor a solid understanding of the business but brief enough to be reviewed within minutes.
- Business description:The description is a breakdown of what you do, where and how you operate, the target audience and branding.
- Market analysis:This consists of research into external factors of the marketplace, the industry and the competitors.
- Organisational objectives:This section sets out the business goals for short, mid and long term. They must be specific and measurable.
- Organisation and management structure:This touches on the hierarchy of the organisation, the function of various roles and the workflow throughout the organisation.
- Product/services:A detailed overview of your product and service including pricing, manufacturing, specifications, distribution and other relevant information.
- Marketing and sales strategy:This crucial component follows through from the market analysis section. The marketing and sales strategy determines how a business will get from their current market position to the new position detailed in the organisational objectives.
- Financial information:Projections, forecasts and budgets are important information to present in a business plan. Banks and investors use this essential part to approve funding.
- Appendix:Supporting information which is relevant or interesting should be attached to the business plan as appendices.
