The primary thing you need when starting or running a small business is a strategy. You’re going to need an idea of what you want to do with your business and your goals for your business as you get started and as it starts to grow.

You’re also going to need to know whether you want to remain a small business or if you want to expand to become a bigger player. Not having a clear vision for your business could lead to its ultimate demise. Similarly, not being willing to adjust your strategy when it’s required can result in issues for your business down the road.

This article outlines whether a small business needs a strategy, how to develop a strategy for a small business, and what examples of a small business strategy look like.

What Is the Main Purpose of a Small Business Strategy?

A small business strategy is a plan of action to help you determine the overall life of your company. If you’re looking to start a business or have started a business, there’s a good chance you already have a product or service.

However, you should still have a business strategy because the product or service and running a business are two different entities. Your business strategy helps you define your goals and track your success and failures. This also helps you know whether you need to try new things with your business that can help it grow, such as hiring new employees, acquiring a loan, or developing new products.

Branding
Source: Pexels

Even if you have a small business, the overall goal is growth. Having a strategy can help you determine if you want to remain a small business indefinitely with you at the forefront or growing your business to have a full-fledged staff. You might think that’s not something you’d have to consider as a small business owner in the earlier stages of your organization, but it’s all a part of the strategy.

What Is the Small Business Strategy Process?

When looking to develop your small business strategy it’s important to know what stage of growth your business is currently under. Are you just starting out? Do you have an excess of cash and resources at your disposal? Two companies can be at completely different phases and still fall under the umbrella of a small business.

Still, you can benefit from having a business strategy and having plans and goals to get your business to new levels. Use the guide below to determine what stage your business currently falls under.

Stages of Small Business Growth

  • Stage 1, Existence: You’ve started your business. Your biggest concern is getting enough customers, delivering your product or service, and meeting demand enough to be a viable business.
  • Stage 2, Survival: You’ve proven that your business is viable. However, this stage can be very fragile, depending on the type of business. It relies heavily on the business owner being the front-runner of the company and overall staff might remain small. There are many opportunities for a business to fail at this point. Businesses that survive this stage are often mom-and-pop stores that don’t see much excess revenue or product development.
  • Stage 3, Success: You’ve made it to a point where your business has hit sufficient financial, marketing, and production benchmarks to ensure economic success. This can potentially allow you to step away from the day-to-day operations of the company with trusted managers and other staff in place. Depending on your goals you might be deciding whether you want to expand your small business and how much you’re willing to risk.
  • Stage 4, Take-off: You must look at the Take-off stage as Survival stage part two. This time, you’ve got a lot more money at your disposal, a lot more help, and a lot more to lose if things go awry. Many businesses can lose enough resources to end up back at Stage 3 or Stage 2 or end up going out of business due to mismanagement of funds and strategies. While you, as the business owner, have the final say on most major decisions, everyday tasks largely are delegated to managers and their staff.
  • Stage 5, Resource maturity: Your business is in a solid place financially and your primary goal is to ensure it stays that way. Your second initiative is remembering despite all your growth your company is still a small business and you want to maintain an entrepreneurial spirit as best as you can.
Growth Phases
Source: Harvard Business Review

 

What Are Examples of Small Business Strategy?

When considering your business strategy, you can now see why it’s important to know what stage you’re in, how much cash you have at your disposal, and how many people you have on your team. All these aspects come into play when considering what kind of business strategy you want to adopt. These are just a few examples:

Small Business Strategy
Source: SendPulse

 

  • Market penetration: Sell more of your current product to your current customers.
  • Market development: Offer your product or service in neighboring markets, such as another city or state. Offering your product in other countries is also an option if you can swing it financially.
  • Alternative channels: Offering methods to purchase your product or service that are much different than your original method. Start selling your products online if you have a brick-and-mortar shop. Develop an app if you already have an online storefront.
  • Product development: Develop new products to sell to your existing customers in addition to your current products.
  • Product development for new customers: Develop new products that are similar to your original product that would appeal to a whole new market.

What Do You Want to Achieve With Your Business Strategy?

Again, your overall goals will depend on what stage of business you’re currently in and how far you feel you can expand. Goals can change over time, but it can be safer for newer businesses to check off their goals before taking on new endeavors. More established businesses might have the experience and collateral to take more risks.

Metrics to keep in mind are revenue, expenses, and customer retention. In addition to expanding your distribution and product library, you must ensure your business and product marketing is top-notch and your customer service is stellar as well.

This becomes even more important if you find your company is growing and you’re moving further away from the day-to-day operation. It’s all a part of maintaining the entrepreneurial spirit that makes employees feel that they’re involved in the making of the business and that every role matters. That expands out to customer satisfaction and better sales and a profitable business.

Conclusion

Regardless of where you’re in your small business journey, you need some sort of strategy to maintain or grow your position. Your strategy becomes attached to your goals and, as you achieve goals, you can develop new strategies or update your old strategies to be more ambitious. They keep you honest and accountable. Most of all, they keep you inspired.

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