Developing a strategy for your business: what to do (and what not to do!)
Develop a commercial strategy is essential when starting an activity. It does not matter whether you sell products or services, whether your company operates internationally or whether you are a self-employed artisan: you are concerned. Strategy is the basis of a business model value creator. Thanks to it, you can clearly identify which are your Goals, then decide what actions to take to achieve them. Simple and refined, development strategies can also be very sophisticated and impact all aspects of your business: marketing, pricing, customer relationship, distribution and even the product or service. It doesn't matter as long as they adapt to your business and its needs. The ultimate goal of all entrepreneurship strategy is indeed the sustainability and development of your activity. So you have to think about it before everything else!
Why is it necessary to have a commercial strategy?
Would you agree to embark on a trek through the Amazon without a map and without a guide?
I suppose not ! It's a bit the same thing with entrepreneurship and it is not for nothing that we talk about strategic roadmap or flight plan when you create or manage a business, very small or large company. The commercial strategy, also known as development, is of invaluable help at all stages of the life of a company.
To start a business
At the project stage, designing a strategy helps you to clarify and structure your thinking, to welcome new ideas, to make adjustments. You assess the market, you better understand the risks, you plan the resources to minimize them and face future difficulties. By defining your goals, you can immediately choose the material, human and financial means that will allow you to reach them. Business strategy is a guide for the future. Note also that a good business strategy is an effective communication tool to develop a business plan and discussing with partners, in particular investors such as banks and establishments from which you may be required to apply for aid and loans.
To perpetuate your business
Then? Then, the company does not become an aircraft piloted automatically, which is perpetuated thanks to its achievements. This utopian model is not (or no longer?) Viable, because everything now fluctuates very quickly. Theimpact of competition on the company can be important if you are not careful. Indeed, with the great information tool that is the Internet, your customers can get information very quickly and compare you with other merchants and service providers in just a few clicks. Consumers are generally less loyal than before to a brand or even to a craftsman. You must do everything to retain your customers but you should never take them for granted. As consumers have become fickle, we must continually ask ourselves how to attract new customers. And that goes, of course, through a concrete development strategy!
Developing a development strategy has many other advantages. It gives you height and distance and allows you to see your business as a whole. You better understand the opportunities that arise. You better distinguish the problems that seize the machine. Finally, thanks to it, you have a reassuring tool that you can refer to at any time - you, but also your partners, collaborators and employees. This road map structures and brings together all the elements of the company.
In short, your company's business strategy lets you know where you are and where you are going!
Entrepreneurship strategy: where to start?
First two questions: who are you and who are you talking to?
Building a strategy is important, but it is still necessary to have thought about thecorporate identity. Developing a strategy for an ill-defined business is both complicated and dangerous. It is a bit like administering medical treatment without having made a diagnosis. As such, identifying yourself as a business and then identifying your typical customer profile can be considered an essential first step in designing a business strategy.
Create a corporate identity
Thebrand image just like the values of a company proceed from the corporate identity. There is something a little bit philosophical about this part of the business strategy. You can (and you should) express your aspirations and your personality during this step. This will allow you to weave a strong, original and differentiated corporate identity. This is what enables the success of businesses and entrepreneurs. Standing out, specializing, innovating while remaining authentic is more than ever the key to success. Don't ask yourself how to beat the competition : you are more than the competitor of another company. Identify your major asset. Thanks to it, you will be able to develop your unique selling point, an essential element of your communication but also of your corporate identity. It's the argument that explains why you are special, differ from your competition, and why customers should appeal to you and no one else.
Once you have defined this, you can identify your products and your services as well as the price range in which you fall. Warning ! Above all, don't base your corporate identity on a low price. Sell at low prices to attract customers is not viable when starting a business. Why ?
- firstly because it is then very complicated to increase these prices: customers generally do not understand it and will look elsewhere;
- secondly, because it is difficult to offer lower prices than those already charged on the market;
- finally, because the “low price” label is very pejorative in terms of image, because it is almost always associated with the idea of poor quality.
Note that people who buy products at low prices often do so because they have no choice. When they have it, they prefer to go upmarket. It is impossible to retain a customer on a low price. It will always go to the cheapest product or service, and who says it will be yours again?
Identify your customers and the competition
Any entrepreneurial strategy obviously targets clients. However, the old adage says that “the customer is king”. Jay Abraham took up this principle by conceptualizing his " strategy of preeminence ". You have to put the needs of the customer before anything else.
So while building your corporate identity, you need to think about it. Who are you talking to? What are your personas, who is the target audience for your products or services? You have to convince the people who really need you, not the onlookers. It is therefore important to know them well. Must also identify customer needs.
Note that investigating your customers and their needs can influence your product and service proposition, and vice versa. If you realize that the customer segment you are targeting wants a product that you hadn't thought of, you can adjust your catalog. You may also find that one of your services interests an unexpected client profile. This is why you must know both your products and services and your target customers intimately!
A market research is therefore a step essential to do before any strategy development. It also allows you toidentify the competition. It is important to know it before any business creation in order to know if the sector is not too competitive. This allows you to position yourself and refine your analysis in terms of customer segments, prices, marketing methods, etc.
Following this, you can define your distribution channels (physical, commercial, e-commerce points of sale, etc.) and your communication policy (posters, flyers, press…) and digital communication (social networks, blog, mailing, advertising on search engines…).
The three stages of business strategy
Have defined a corporate identity and know your customer segment are essential prerequisites in the development of any entrepreneurship strategy. These foundations will then allow you to build a development strategy perfectly suited to your business. The construction is done in three stages:
- goals definition ;
- identification of actions and means;
- implementation of measurement indicators.
In fact, there are only three ways to increase your business:
- increase the number of customers;
- increase the average value of the sale per customer;
- increase the number of times the customer comes back to you.
These three growth biases can however be broken down into multiple objectives:
- quantitative (increase in turnover, market share, etc.);
- qualitative (developing a new product or a new service, targeting a new customer segment, etc.).
So it's up to you to define your goals according to your corporate identity, your current situation and what you want to strive for. Several goals can emerge and this is where you need to prioritize. In this regard, don't forget to set deadlines for each of your goals!
Identify actions and means
Each objective should be divided into actions, or even sub-actions if necessary. This is the “small steps” technique. It is very effective in achieving its goal because you are always in the action.
For each action, you must assign means. These means can be human (as many people responsible for such action). It can also be about communicating for the company, etc. For example, if you want to reach the number of X customers from the month you launch your activity, you can decide to offer a promotional offer for a product (by practicing a one-off price reduction) and to carry out an advertising campaign ( from flyers to Google ads).
Each of the actions must be budgeted and associated with a (reasonable) deadline. This allows you to motivate people / teams / yourself in carrying out these actions. It also helps you prioritize. Indeed, it may be relevant to deal first with actions that have a lower cost and that promise faster results: you have more visibility on your entrepreneurship strategy more quickly.
Set up measurement indicators
At each step you need measure commercial actions and analyze the results obtained. For this purpose, you need to set up indicators from the start. These can be of different types. Of course, you have to compare the financial cost of the action with its added value. This surplus value can be purely monetary, but it can also be qualitative. For example, an action may have improved your reputation and your brand image with your customers and prospects. It is also possible that you have increased your customer base or that you have reached a new customer segment. You may also have improved the working environment of your employees, which has led to better productivity. Etc. You must therefore establish performance indicators in this sense (these are the famous KPI, in English Key Performance Indicators).
The evaluation of your actions thanks to the indicators allow you to define the effectiveness of these, if they can be repeated or if they need to be improved.
You now have the keys to a quality development strategy. Warning ! It is not enough to theorize on the subject or to throw a few lines on a piece of paper to know where you are going. It is essential to formalize in writing all the steps, from your corporate identity (is it really clear to you?) To the implementation of KPIs. This will give your business a clear roadmap that will be valuable to you, your people and your entire team. Your business strategy file will provide you with traceability on all the actions undertaken and the keys to facing obstacles and moving forward.
Need to be supported in this essential step in the creation of your business? Contact me !