Business Management Strategy Gives You Control

Most small businesses start out without any clearly thought out business strategy. While a large number of such businesses fail, a few might succeed because they happened to adopt the right success and growth strategy. Usually, this is a process of learning through doing, with plenty of mistakes, an approach that can prove wasteful.

Small businesspersons adopt the above approach because they do not have the know-how for business strategy development. Though a big-sounding word, strategy is actually a commonsense way of going about something. In this article, we look at the significance and elements of business strategy.

Business Strategy Elements

Strategy development involves looking at ground realities and formulating an approach that can achieve desired results in the context of these realities. It follows that strategy will differ from context to context. Readymade strategies rarely work and this is the main problem with strategy development; you have to take pains to observe, think and plan.

All businesses need:

• Marketing Strategy to ensure that they can get a profitable volume of orders for what they offer, at a profitable price
• Technology Strategy to select the most appropriate technology, obtain the requisite know-how and implement it in their business
• Operational Strategy to carry out operations at low enough costs while ensuring that they can deliver a quality product or service to their customers
• Human Resource Strategy to hire, train, develop and retain people who are equipped to handle the varied tasks involved in running the business with the required degree of competence

Significance of Business Strategy

As mentioned at the beginning, when you jump into a business without formulating clear strategies in advance, you have to learn through trial and error. This is a wasteful process that often leads to failure of the business before the businessperson has learnt how to run it successfully. On the other hand, developing your marketing, technology, operational and people strategies in advance can help you avoid fundamental errors.

Such a desirable outcome is possible only if your business strategy development is an objective exercise. If the strategy is based on subjective feelings and pre-conceived notions, that resulting business plan can turn out to be unsound and even impractical. Sound strategy is based on an understanding of realities and workable ideas on how to achieve results in the context of these realities.

Development of a sound business strategy typically starts with a business model that spells out in specific terms how you will make, deliver, bill and collect your cash. The implications of each of these critical activities are reviewed and the feasibility of coping with these with the resources available to you is objectively examined. The business model should tell you whether you are getting into something you can realistically hope to succeed with.

If the model indicates that you can hope to work it, the exercise of developing detailed business strategies begin. We will look at this process in a separate article.