Your Business Plan Part 2: Business Strategy
Your Business Plan Part 2: Business Strategy
The process of completing a business plan empowers you to articulate all key aspects of the business you’re looking to purchase, and an essential part of this document is your Business Strategy.
A straightforward Business Strategy is the 2nd section within your business plan, it will acknowledge the areas of the business that need improvement, and detail exactly how you will implement steps to make these changes and succeed.
Think of your Business Strategy as a working plan to reach your business goals – you’ll want to cast a critical eye over the business, and get down to the ‘nuts and bolts’ of what makes it profitable and viable for you as a potential purchase, and from there, lay out exactly how you will leverage its strengths moving forward.
Your Tactical Approach
Start by setting out your tactical approach – what are the steps and resources (these may be an increased marketing budget or new team members) required to make the improvements to the business that you see as essential? Plan these out, plotting a timeline of when you will action each step and give a reason for why and how each step will lead to benefits for the business.
If you’re unsure where to begin, take a look at the past performance of the business and where it stands today, identifying what worked well and any gaps for potential improvements. Your Business Strategy will allow you to anticipate and avoid potential problems before they occur.
The Strategic Impact
Next within this section, you will explain the strategic impact of your defined strategy. What are the opportunities or external threats that may occur as a result of following your business strategy step by step?
Consider this impact up to five years in the future – for example: if you reduce the retail cost of a product your business produces, you will sell more units, but will your supplier be able to keep up with the increased demand?
You may find it helpful to write your strategic impact once you’ve completed your SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, which is the 4th section in your overall Business Plan, and we will be sharing more about writing your SWOT analysis in coming weeks.
E-commerce and technology play a key role in the processes of almost every business, whether it’s upfront or behind the scenes, and they also form an important part of your Business Strategy. Look at how your business is utilising e-commerce and technology currently and where you could be doing more to improve your business – will an increased focus on technology boost your online sales capacity, or reduce manpower requirements for a leaner operation?
Earlier in your business plan, you outlined your Executive Summary, and now you’ll have an opportunity to go deeper into your business values. These will be guiding factors as your business grows, so ensure that each value is meaningful and critical to your long-term success.
Consider: How do your values benefit your customers, and how do they keep your team on track to achieve your business goals?
The set of values that you settle on will define your business in a series of words or phrases, for example: “a commitment to customer satisfaction” or “accessible”, and these will extend out into your mission statement, which may be one or two sentences long.
Your mission statement should be clear and easy to interpret, and you are likely to also utilise this mission statement when you create your marketing strategy, so take your time working on a set of values and a statement that resonates with you and your customers.
Building Credibility and Risk Reduction
The final section of your Business Strategy focuses on your credibility and risk reduction. Start by asking yourself: how will I improve and increase the credibility of the business, and how will I reduce the risk for our customers when they do business with us?
For example, an e-commerce business may plan to improve and increase their credibility within the market by implementing customer evaluation forms at the conclusion of a transaction, or a business may offer a 30-day money-back guarantee, giving the customer peace of mind and reducing the barriers to entry.
You’ve now completed the Business Strategy portion of your business plan, and you can explain exactly how and where you’ll allocate your focus in order to maximise improvements to the business over time.