Business Growth Planning Starts with Effective Business Strategy

As any successful business owner can tell you, business growth starts with a plan. Businesses can grow by accident, but the likelihood is small. However, any old plan will not necessarily produce the desired growth results. You must start with a strong strategy.

Strategies are most effective when they have two things: a goal of where the business wants to go and an awareness of a business’s strengths and weaknesses. In essence, you have where you want to go and where you are; the strategy is the GPS.

Strengths that a business has can fit into three categories. Superfluous strengths are those strengths that a company is good at, but does not directly affect its industry. For example, company parties that are wildly-good times, but do not measurably affect turnover nor productivity. Comparative advantages are those strengths that a company has, but can be easily copied by a competitor, such as business hours.

Lastly, competitive advantages are those strengths that are not easily copied, such as a culture where teamwork is not only expected, but is a way of life. In addition to strengths, weaknesses must also be expanded and categorized in two ways: those that affect the business in a competitive atmosphere and those that do not.

Next, the goal of the business is identified. In this case, the goal is business growth, but put a measurable number on that goal. Do you want to increase revenues by 10% in the next 12 months or increase your number of orders by 5%? By making it measurable, you will be able to check the effectiveness of your strategy upon implementation.

Now, it is time to plan your route or strategy. Do you strengthen your weaknesses that are affecting your business in the competitive environment or leverage your strengths? The two traditional strategies are a cost leadership strategy or a differentiation strategy. However, these two categories are not necessarily the only options these days and the best strategy will be unique to individual business’s strengths, weaknesses, and goals.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more topics on successfully managing the challenges of growing your business profitably, please search our blog at our website www.portalcfo.com.

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