Article written by Jannie Rossouw, Head: Sanlam Business Market
Everyone who has been in business for some time has a “recipe” for the formulation of a business strategy. In this article I share the primary building blocks of the business strategy framework I use when I assist small to medium-sized businesses with planning. These building blocks will be explained further in future articles.
1. Who is your target market and target client?
In order to achieve success in business you need an in-depth knowledge of the target market for your product or service. You should be able to at least answer the following questions:
- Do I have a written definition of the target market and target client?
- Do I understand the unique needs of my target market and client for which I will be offering a solution(s)?
- Do I know who my competitors are and what their value proposition is?
- Do I understand the market trends that will have an impact on my industry?
- Am I following a niche market strategy?
2. How competitive are you really?
Knowing who your competitors are and what their value proposition is, is not enough. Also note the following elements:
- pricing strategy (special offers, discounts offered)
- marketing elements
- distribution (method of distribution and place/locality)
Armed with this information you are now able to make meaningful comparisons and adjustments where necessary.
3. Who is in your team of experts?
In a small business, the owner usually has to take responsibility for the entire value chain. However, it is possible to involve certain skills from outside your business when determining the strategy of your business. People like your accountant, lawyer, a very good friend who is successful in business, and even your financial planner could provide valuable input and insight.
4. What other business elements require further analysis?
- Analyse the business output for the past 12 months
Your best learning experiences result from previous successes and disappointments in business.
- Know the nature of your business
The value system adhered to by you and your staff will make or break the trust between your clients and the business.
- Do a proper role assessment
Sometimes we fulfil roles in and through our business that we should rather leave alone or outsource. Other roles are not up to standard and should be addressed and improved.
- Identify and formulate the strategic objectives of the business
Formulating and recording objectives are extremely important. There are simple techniques that can be applied to create clearly defined objectives. Longer-term (>12 months), medium-term (6 to 12 months) and short-term (<6 months) objectives can be formulated.
- Plan for success
There are certain mechanisms to ensure the best chance of a successful outcome, i.e. achieving an objective. Dedicated action, whereby all resources are used optimally, supports success.
5. What in-flight adjustments need to be done?
A business strategy is not a static, once-off process, but rather a dynamic process in which regular adjustments are made as we learn from practice.
6. What tools you can use immediately?
Sanlam offers you two free tools that can be downloaded from our website to assist you with the planning process.
- The Business Plan Book in English and Zulu
Web link: www.sanlambusinessplanbook.co.za
- The Business Turnaround Book in English
Web link: www.sanlambusinessturnaroundbook.co.za