Your business strategy is an important tool in your ongoing job of seeking success for your business – but creating and maintaining a strategy document is a big investment of time and potentially money too. Finding the resources to prioritise this job is easier when you have the right motivation – when you know why you need a strategy, so today that’s what we’re looking at!
What a Strategy Is
First of all we need to define what a strategy is. It’s easiest to do this by first of all taking away some of the things it isn’t. Your strategy isn’t the same as your goals, and your first step ought to be putting in place some goals you want to achieve for your business. Take the long view here – this isn’t about where you want to be next week, it’s where you want to be in a year, five years or ten.
Your strategy emerges from those goals: it’s not what you want to achieve but it is how you intend to achieve it.
With a strategy you can set out red lines your business won’t cross – be they financial or ideological – you can tie your decision making to your brand identity, and more to avoid a lot of the risks that growth and big decisions can bring.
Let’s take a look at some of those risks to underline how important that strategy is.
Risks
Financial risk is one of the biggest threats to your business, and it can come at you from many angles: overstretching yourself in an expansion effort, the arrival of a new competitor, increased costs and many others. Putting a strain on your revenue could mean you need to look for more cash, and each option comes with different implications for your business: banks are convervative about offering loans and a successful one puts you in reasonably inflexible debt. You can take money from your business’ own reserves, your own savings or even remortgage your home, but this leaves you more vulnerable to other financial shocks – worryingly so the more personal the money gets.
You can also look for more investment, but in most cases investors will also want a piece of the business in return – you diminish your independence and decision making power by inviting them in.
A strategy allows you to take a clear look at your options and decide what works best for your goals and needs.
Brand Damage
Another major threat to your business is brand damage – every choice you make contributes to your customers’ sense of what your business is like and this intuition is a closer definition of what a brand is than a logo and a slogan.
Use your strategy development process to define what you want your brand to be and to grow into, so your decisions, big and small, can all be used to reinforce that brand rather than undermine it. Decisions that are too obviously aimed at cutting costs rather than providing the service you’re known for can undermine your brand as can, conversely, decisions that play to a pricier, more luxury end audience than your customers are accustomed to.
If this all sounds intimidating, it might be worth looking for a strategy consultancy – these experts can help with every aspect of the process and help you create a strategy that will keep your business running successfully for years to come. If you’re interested in strategy consulting firms London has plenty to offer to suit many business’ different needs.