What's Your Strategy

There are some things you make time for no matter what. And at the beginning of the year big business or ___prenuer, you need to put together your strategy for the year. I like the army's definition of strategy - "Strategy is the guiding principle you use to help you make decisions that link your desired ends with the resources you have available (the means) and the process you want to follow to get there (the ways)." Here are some areas to look at particularly for SME's.

Trends and technology: What does your research indicate is the trend in your field? Will it stay the way you are currently offering supplies and services or will it change? This item covers the developments you expect for the next few years. Even a 'perfect' business can become obsolete overnight due to future developments. Specify a 5 year forecast of your field in your area.

Sales revenue forecast: Have you developed these targets? This section shows your estimates of future sales revenue for your business. Your strategic plan, needs to spell out the specific actions you will take to achieve your forecast sales revenues. 

Differentiation from competition: How does your business differ from the competition's strong and weak points. If your competition is strong, don't minimize that fact, but figure out ways you will adjust to weaken or use that strength. Remember to carefully look at your business from the customer's perspective. If you anticipate no direct competition, your business probably involves selling a new product or service, or one that is new to your area. How will you manage your cash-flow trying to develop a market? 

Getting to the customer - once you describe your target customer, it's easier to create a list of possible ways to reach that person. Decide which of all the possible methods of communication will give you the most exposure for the least cost in money or time. 

Managing the business cycle: Many businesses have cycles of growth and decline often based on outside factors such as taste, trends or technology. What is your forecast of the cycles and trends in your business? For example, if your forecast tells you that the new product you plan to manufacture may decline in three years when the market is saturated, can you earn enough money in the meantime to make the venture worthwhile? Every business experiences ups and downs. Is your business small and simple enough, or capitalized adequately enough, to ride out slow times? Or do you have some other strategy, such as staying open long hours in the busy season and closing during times of the year when business is slower? 

Write your risk analysis by first thinking of the main dangers your business faces. This shouldn't be hard, as you have probably been concerned about them for some time. Some of these may be on the list set out above; others will be unique to your business. Once you have identified the principal risks facing your business, write out a plan to counter each. But don't bog yourself down worrying about all sorts of unlikely disasters.