There is a common misconception among small business owners that the smaller your team is, the less your company needs a strategic plan. Despite the fact that this belief sounds logical to some entrepreneurs, it is also one of the biggest business myths. Of course, when you run a small business, you can easily focus on the day-to-day tasks and it really may seem like your business doesn’t need a strategic plan at all. However, when you don’t have a big picture view of your business, you can’t understand whether your day-to-day actions are driving your company forward.
Yes, sometimes the business success of small companies can happen by accident. But way more often, such success comes as a result of careful strategic planning. That's why the development of a business strategy is an essential task not only for billion-dollar corporations but for companies of any business size that want to work smarter.
If you are a small business owner who wonders whether your company needs a strategy, this piece is for you. What is a small business strategy? Why do small businesses need a strategy? Let’s get to it!
Definition of a strategy
To make things clear, a strategy is a detailed plan with step-by-step actions that have to lead your company to your main business objective. Such a plan shouldn’t be too long (a few pages is enough), and it is definitely not a gospel-truth document that you can’t change when necessary. In simple terms, your strategy has to represent where your business wants to be in three to five years. It has to include the key purpose of your business, the desired final results, and how those results can be measured.
1. To adapt to market changes
Developing a small business strategy helps you to be more agile. Whatever changes are occurring in your business field, a well-thought-out strategy gives you a birds-eye view on your business objectives and evaluate how you can use new opportunities and avoid possible threats. You may want to start using a goal-oriented planning platform, present your strategy in the form of a roadmap via an app, track market changes, and introduce innovations to your strategy if necessary.
2. To manage your financial resources
Since strategic planning for small businesses also includes financial planning and pricing products or services, it lets you easily understand your margins. Thanks to a small business strategy, you will always be up to date on how much money you have and how to distribute it properly.
3. To increase marketing ROI
One more key benefit of a strategy for your small business is that it helps you answer the following questions:
- Why should your potential customers buy your products?
- Who are your competitors?
- What activities can give you the best possible ROI?
- What marketing should your company engage in?
4. To optimize workforce allocation
Having a big-picture view of your business strategy also helps you allocate your workforce right. To achieve business success, you should be able to control your employees’ workload and keep in mind your business priorities. Some tools allow you to monitor the key indicators of your strategy, analyze them, and decide what tasks particular team members should do next in real-time.
5. To improve team collaboration
It’s really important to ensure that all your teammates have a clear understanding of what business objective you want to achieve. When your workers keep your business strategy in mind, they understand why they are doing particular tasks and how the successful execution of these tasks help you hit the main business objective.
All in all, a strategy is a must for businesses of any size. It helps you visualize your goals and control the proper execution of your plans. A strategy informs you of a higher purpose — the mission of your business. So, if my argument has been convincing and now you see why small businesses need a strategy, it’s high time you created your own!