How to Build a Business Strategy
- Identify your business’ aspirations and set goals to measure your progress toward achieving that aspiration.
- Pinpoint which segments of your market you want to capture.
- Determine how you’ll beat your competition.
- Figure out which competencies are needed to beat your competition and sustain your business’ success.
- Decide which management systems are needed to hone these competencies.
1. Identify your business’ aspirations and set goals to measure your progress toward achieving those aspirations.
In business, traditional goal setting lets you measure what you do, but it doesn’t lend itself to gauging how you do it or why. And if you only focus on the results, it can sometimes incentivize you to take a course of action that prioritizes your organization’s needs over your customers’ needs.
To help you focus more on your purpose and process instead of just your results, consider setting and anchoring to an aspiration, or your vision for your business in the future, when building your business strategy -- it’ll inspire you to do work that better serves your customers. Once you set and anchor to an aspiration, you can add your goal to the equation, which will help you simultaneously produce customer-centric work and hit your numbers.
2. Pinpoint which segments of your market you want to capture.
Your product or service most likely isn’t the best fit for your entire market, so it’s crucial to pinpoint the segment or segments of your market that benefit the most from your product or service.
Customers who genuinely need and want your product or service are also the customers who retain the longest and are least likely to churn, boosting your customer lifetime value and lowering your customer acquisition costs.
3. Determine how you’ll beat your competition.
Ricky Bobby’s legendary saying that “If you ain’t first, you’re last” doesn’t necessarily apply to the business world, but it does have some bearing on it. Your customers won’t buy two of the same products or services, so if you want to capture as much of your segment of the market as possible, you need to place first in the majority of your target customers’ minds.
Some of the best ways to stay top-of-mind are crafting a creatively refreshing brand, differentiating your product or service from the rest of the crowd, and pricing your product relative to its perceived value.
4. Figure out which competencies are needed to beat your competition and sustain your business’ success.
Unfortunately, passion isn’t enough to beat your competition and rocket to the top of your industry. Talent and skill are just as crucial. Depending on your aspirations, goals, and market, you need to figure out which types of teams and employees you need to develop and recruit to not only beat your competition, but to also sustain your success.
5. Decide which management systems are needed to hone these competencies.
If your business is a team, then your managers are the coaches. They’re responsible for developing, supporting, and inspiring your employees to do their best work possible. Because no matter how much raw talent your employees have, they'll never reach their potential and, in turn, help the business reach its potential if they don’t refine the skills and discipline necessary to compete and succeed.
Principles Over Tactics
We live in a day and age where the internet is overloaded with advice. You have access to countless amounts of tips and tricks that could potentially help you build a successful business. But without the ability to think critically about whether these tips and tricks actually apply to your specific situation, you’ll never reach long-term success.
That’s why strategy is so important nowadays. It grounds your business in principles that can apply to almost situation and, in turn, help your business achieve both its short-term and long-term goals.
Originally published May 8, 2019 7:15:51 AM, updated May 08 2019