A small business has a choice of two goals: Increase profits but stay small (niche market) or grow into a larger business. How? By managing your company using the elements of strategic planning.
Take a week or two to scrutinize your industry, competition and the general state of business in local economy. Think about how trends have changed over the last couple of years and where they might be headed as you go through your daily tasks. Take note as ideas rise. After that, take time to consider your target customer, what she values, how you can meet her needs. Last, spend time looking at each sector of your enterprise: how it operates, whether it is efficient and how it fulfills the needs of your customers. You will immediately see problems that can be fixed with little effort. And you will already have some ideas about adapting to the competitive environment and satisfying your target customer.
The most important aspect in positioning is that it sets a specific direction for your business. For example, if a bakery owner positions her business to increase profits but remain a small local establishment, her operations, inventory, marketing and customer service will align with creating more varieties of baked goods more cost-efficiently, and perhaps opening a coffee shop by expanding into the space next door. If her positioning is to grow into a much bigger regional or national company, then her operations, inventory and marketing will align with developing distribution channels throughout the state and, eventually, the entire nation. If you know the direction you want your company to take, align the various elements of your enterprise with that directional goal. This avoids wasting time and effort on activities that don't add to your bottom line. With alignment of your total enterprise in mind, delay making any changes until you have positioned your company and set a direction.
Write it Down
It is important to write down your plan, even if it's no more than a few pages based on the notes you made. Start with your positioning statement, detailing your directional goal. Then list benchmarks toward that goal, such as leasing the space next door, hiring additional staff and buying new equipment. Include estimates of the cost. The rest of your strategic plan is an action plan for your operations, inventory, marketing and customer service, designed to meet those benchmarks. The value of a written strategic plan is that it serves as a touchstone. You can review your initial ideas when the pressure of running your business causes them to get foggy. It is also a good reference document that can be consulted in future years when searching for new ideas or reviewing ideas that worked well or didn't work at all. Update your written strategic plan so it serves as a business management diary. This way it can be a useful resource for you and your managers.
Ensure the success of your strategic plan by taking steps to properly implement it. While you are scrutinizing your industry and your own enterprise, hold brainstorming sessions with your key employees. Including suppliers and customers in your sessions may also be beneficial. The cooperation of your managers, staff and suppliers is vital to the success of your plan. Keep your plan on target by holding regular meetings with managers and employees to discuss how business is progressing and how to deal with problems. Communication with your employees is the best way to ensure the successful implementation and execution of your strategic plan. It's also a good way to elicit helpful ideas for improving its effectiveness. No plan should be set in stone. If during implementation you see a better way, change the plan accordingly.
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