The word 'strategy' is probably one of the most overused terms in business. Even though it's a term that we all know (and probably all use), there is still a bit of confusion about how you apply it and how to use it as a tool to grow your business effectively. This article will help you think more strategically and make it a tool for decision-making.
One of the things you can be virtually certain of in life is that you don't get something you don't aim at. Ironically, more often than not, entrepreneurs will keep their goals and objectives fuzzy. The issue with specifying goals is that you simultaneously specify your failures. If your goal is vague, you don't know when you fail. Being in the dark can be comforting, but it is a horrible long-term state for any startup. To step into the light, you'll need to specify clear goals and make a plan to reach them – that is a business strategy 💡
What Does it Mean to Make a Business Strategy?
A strategy basically means 'choice.' It's a decision to pursue one thing over another. "We choose to do A and not to do B and C." When we choose to have hyper-focus on one thing (in this situation, A), it becomes more evident how to make that goal a reality because we can break it down into incremental steps that outline a map that we can follow.
In the sixties, USA and NASA had a vision; to have a man walking on the moon. Setting the main goal is the first step of a strategy because when you know what you want to achieve, you can imagine what other elements you need. In that case, they needed a man capable (and willing) to go out in space and a rocket to take him. A Business strategy outlines the plan of action to achieve a company's vision and long-term growth. It will define the objectives and guide decision-making.
A strategy is crucial because the resources available (especially in early-stage startups) are usually limited. You can do anything – but not everything. You'll need to figure out precisely what you are striving after and make a plan on how to get it – because that is what provides you with the thrust you need 🚀
Are You Planning to Plan?
Have you heard the expression "If you fail to plan, you plan to fail"? While It speaks to all facets of life, it most definitely rings true in entrepreneurship and business. So much that planning is one of the four primary pillars of business management.
A founder/manager will use three plans to pursue and obtain company goals: operational, tactical, and strategic.If you consider these three plans as stepping stones, you can see how their relationship is interconnected to achieve the company's overall strategy and long-term growth. Operational plans are essential to attain tactical plans, and tactical plans are crucial to attaining strategic plans. Let's start at the top to best understand the relationship between the different types of plans:
1. Strategic Level:
Strategic plans are developed with the entire startup in mind and begin with a company's vision and mission Statements. Startup founders will develop and execute strategic plans to paint a picture of the company's desired future and long-term goals. Essentially, strategic plans look into the future where the startup wants to be in one, three, or even five/ten years. The founders (or top-level managers) provide strategic plans as a catalyst for lower-level planning - the tactical plans.
E.g., "We want to be the main e-commerce site for fishing equipment in Scandinavia."
2. Tactical Level:
The next level of planning is called tactical planning. Tactical plans are the strategic plans translated into specific strategies relevant to a particular organizational area. Tactical plans are involved with the responsibility and functionality of different departments (sales, marketing, customer service, etc.) to fulfils their parts of the strategic plan.
E.g., "We want to improve our online presence with great content marketing and better SEO so that we can rank higher on Google and get more organic traffic."
3. Operational Level:
Operational plans are the last level of planning; they are the concrete tasks executed in the front line. All operational plans are focused on the concrete practices and processes that occur in the day-to-day operation. This comes down to what each department and employee needs to work on.When employees achieve operational goals, the departments achieve tactical goals, and the company is achieving strategic goals. When these three levels of analysis are aligned, the company has a better chance of succeeding over time.
E.g.,"1. We need to publish five articles every month on our website about fishing equipment and establish credibility as an industry expert."
How Can Business Strategy Make Your Life Easier?
- Planning: A business strategy helps you create the key steps to achieve your goals.
- Strengths and Weaknesses: The process of developing a business strategy allows you to identify and evaluate your startup's strengths and weaknesses so you can create a strategy that optimizes your strengths and counterbalances your weaknesses.
- Efficiency: A business strategy allows you to prioritize the allocation of resources for your business activities, which will make you more efficient and effective. It also helps you plan for deadlines to stay on track with your goals.
- Control: Developing a business strategy gives you more control over which activities will directly help you reach your goals and allows you to quickly assess whether your actions are moving you closer to those goals.
- Competitive advantage: By identifying a plan for reaching your goals, you can focus on capitalizing on your strengths and using them as a competitive advantage –– that makes your company unique and stand out in the marketplace.
The Business Plan
You have probably heard about a business plan before. A business plan is a tool for making a coherent business strategy on all levels of analysis – from the strategic down to the operational. A great business plan represents the backbone of your company and is the overarching game plan that will take you to the place you want to be.Many investors and stakeholders want to see a business plan because it's a testament that you have spent time thinking about your business holistically and from all angles, which says a lot about you as a founder. It's rarely enough to have a great idea. You must also communicate it effectively; after all, it's another person who usually stands between you and the next step on your entrepreneurial journey. Being convincing is an alpha-omega for a founder, and a business plan will help help you with that.
If you are doubtful about writing a professional business plan, you can use our business planning software. It will guide you through the entire process. It's free to give it a try with our 'free plan' – we hope that it can help you progress with your startup dream ✨