Starting a business is hard, and if you do not have a right business strategy, you could face some significant problems. Poor business strategies could lead to difficulty in finding funding and will make it harder to run your business once it is going. Fortunately, there are crucial elements to a sound business strategy that you can learn and incorporate into your plan.
Clearly Defined Goals and Outcomes
A good business plan will not be complete if you do not have your goals and predicted outcomes. Of course, these goals will need to be defined and realistic. You cannot expect to be the market leader in 6 months, but you can look at having a percentage of the market share by the end of the first year. If you do not have defined goals and outcomes in your business plan, no-one is going to take you seriously.
When you create your goals and outcomes, you need to consider five factors. You need to have an action which the business will complete such as expanding or selling. You also need to include details of what the action is related to; such as expanding local presence or selling units. Metrics will need to be considered, and this will be the measurable number you are working toward such as selling 50,000 units.
You should also have a unit which is going to be who the actions relate to such as expanding to new markets or selling to business customers. You also have to put a deadline on the goals and outcomes. A business strategy that does not have deadlines will not be taken seriously, and you will have nothing to work toward.
Accountability is a small detail that a lot of people overlook when they create a business strategy. However, if there is no accountability, you will not know who is meant to be working toward specific goals and outcomes. A lack of accountability will also destroy any hope that you have of executing your strategy successfully.
When you are determining accountability, you will need to include those responsible for the creation of the strategy. There is no point in stating that the sales department is accountable for selling x number of products if you do not know if this is achievable. When the responsible parties are not included in the creation of the goals and strategy, you might be setting outcomes that are unrealistic. Additionally, when you include them, and they are unable to reach the goals or outcomes, they cannot blame you and will have to be held accountable.
Set Your KPIs
KPIs or Key Performance Indicators are essential as they will help you track your progress and determine if your business strategy is working. If you do not set KPIs, you might realize too late that you are not on target and you will not be able to reach your goals and outcomes. It is important to note that KPIs are different to the metrics that you set when you define your goals and outcome. The metric you set will be the final amount that you want to achieve while the KPI will have measurements of how to get to this metric.
KPIs can also be used for the more general values that your company has. If one of your company values is to reduce environmental harm, the KPI you set could be to lower your carbon footprint to 0. You can also set KPIs that have deadlines which lead up to the final idea of being carbon neutral to help you reach your goal.