A business strategy is a framework you develop for a start-up. It typically outlines what you want to achieve within a set period , and determines both the day-to-day running of a business, and its mid to longterm activities.
Unfortunately, too often, people get into entreprenuership without a strategy in place because they think it only applies to big businesses or multinational corporations.
Yet, having a strategy for your business, no matter how small it is, is very crucial.
Keep in mind, though, that given its importance, drafting a business strategy will take plenty of time, introspection, research and consultation.
But it’s worth the effort for your future success as business owner. And it will save you time and resource down the line.
Here are five reasons creating business strategy will give your start-up a competitive edge.
1. Allocation of resources
When going into business, deciding where to allocate the resources you have can be a major challanges.
A strategy, however, takes the guesswork out of the decision. Knowing where you want will help you identify which resources must be spent and which ones are frivolous.
More importantly, it ensures that you don’t put your capital in areas that won’t contribute to achieving the business’ vision.
It could also help you secure funding since you can use it to draw in investors who share your vision.
2. Prioritisation of activities
Starting a business can be overwhelming because there’s so much that needs to get done to get it on ita feet.
A strategy will provide charity, making it easier to know what you should prioritise given the resources you having at your disposal.
This way, you can focus your time and energy on what will get you closer to success, and keep the momentum going once you finally take off.
3. Planning and decision making
A good business strategy will help you plan your daily activitiea and set goals that you work towards.
It’ll also be the basis of many important decisions, including staffing needs, choice of suppliers, funding, expansion and financing options.
Since the plans and decisions you make can mean the difference between succesd and failure, you want to make sure they’re based in a solid foundation.
All founders know what they want to accomplish when they set out on their entreprenuerial journey. Creating a business strategy will ensure that this vision isn’t just in your head, but is communicated to everyone involved.
Essentially, a strategy will ensure that you, your partners and employees are all working towards the same goal.
5. Vision, mission and values
Two competing firms in the same industry could have vastly different methods of operation and see vastly different results. This is because their business strategies- the basis for their mission, vision and values— are different.
A strategy will enable you to define what you consider to be success, and what values your business relies on to achieve it.