Have you ever read the phrase: “Why do you need a business strategy?” If so, then you have probably been confused by what it really means. To put it simply, a business plan is an outline of how you plan to make money in your business. It does not mean that business plan will give you a crystal ball for predicting where your business is going to be in a year from now. What the business plan does is give you a road map for how you plan to get there.
So, why is it important to have a business strategy? A business plan helps you answer questions like: Do I plan on selling my business? Will people want to buy my products or services?
The reality is most small businesses are not successful because they do not have any plan whatsoever. In fact, most successful companies do not even have business strategies. Their strategies are either based on past experience, on the strengths of their company, or on what worked in the past. They ignore the critical and in some cases, seemingly trivial, elements of strategic planning.
Why do you need a business strategy if you already have a product or service that people want to buy? You also include the cash flow of the business and its taxes in your strategy. It does not matter if you do not have a competitive advantage. A good business plan can help you create a competitive advantage. Otherwise, you may as well be playing catch up. Having a competitive advantage is more than just being able to produce a better product or service than your competitors. It also means that you have figured out how you will make money in the future, what you will sell, how much, and who will you sell to.
In order to have strategic planning, you first need to decide what strategic goal you want to achieve. Once you have decided what your strategic goal is, you have two choices. You can either create a business strategy map, or you can figure it out on your own. If you decide to create a map on your own, then you will probably spend a lot of time trying to figure out what your target market is, what problems they are trying to solve, and how you can solve those problems.
Most professionals, however, do not like to spend that much time on figuring out the structure of their map. So, they hire other people to do it like hiring a financial advisor. You can hire a map consultant, or you can make a map yourself. You can use Microsoft Office software, or you can write a custom map using excel. Of course, you want to make sure that the map is comprehensive.
The next question you have to ask yourself when thinking about strategic planning is whether or not you are strategically aligned with the customers that you serve. Some companies don’t think of customer loyalty and engagement in the same way as they do their business strategy. They make assumptions about who their customers are and what they want. As a result, they are constantly looking at their competitor’s strategies to determine whether or not they are on the right track.
In conclusion, if you are asking yourself “Why do you need a business strategy?” you need to make sure that you have aligned your interests with your company’s goals. You also need to make sure that you understand what your business strategy is and what it is trying to accomplish. It doesn’t matter whether your business strategy is a map or a handwritten list of what you would like your customers to buy.