​The Importance Of Strategy For Small Business

Last Updated: 

March 6, 2024

​The Importance Of Strategy For Small Business

The small business, like businesses of any size, wants to consolidate its business and grow. The question to ask is: what strategy is being followed to achieve this goal? Is there this strategy?

The reality experienced by the small business involves a lot of dynamism and few resources, which is why a guiding plan is necessary to achieve the goals. Unfortunately, many small businesses neglect this activity and become purely operational, allowing unplanned actions to take them somewhere, rather than pre-planning to guide actions to get them to a particular place.

We'll explore in this article the importance of business strategy for small businesses, and how it can start or enhance your strategy. For more information you can refer at Zoe Talent Solutions.com

Key Takeaways on Strategy for Small Businesses:

  • Dynamism and Limited Resources: Small businesses experience a dynamic environment with limited resources, making a strategic plan essential for achieving goals. Without a strategy, businesses risk becoming purely operational, leading to unplanned actions.
  • Lack of Direction: Many small businesses operate without a common direction, focusing only on the present moment without considering the future impact of their actions. This can lead to decisions that may be harmful in the long run.
  • Importance of Strategy: Business strategy serves as the foundation for growth. It not only aligns with good management practices but also benefits the company by expanding market knowledge and ensuring coherent decisions.
  • Coherent Growth: A business strategy ensures that the entire company moves in the same direction, providing a clear path to achieve specific goals.
  • Developing a Strategy: Creating a business strategy involves extensive research, analysis, and decision-making. It requires considering various factors, including the company's business, products, competitors, customers, marketing actions, financial planning, risks, and opportunities.
  • Starting Point: The initial step in developing a strategy is recognising the need and importance of strategic planning. Without this awareness, even a well-crafted strategy might not be executed.
  • Business Consultancy: Many businesses, including small ones, seek the expertise of business consulting firms to develop a strategy. Consulting firms specialise in offering strategy development services tailored to the unique needs of businesses.
  • Taking Control: Business owners should proactively dictate the direction of their business rather than letting external factors control their trajectory. A well-defined business strategy provides the roadmap to achieve this.

Understanding the importance of strategy and implementing it effectively can make a significant difference in the success and growth trajectory of a small business.

Discover Real-World Success Stories

The various situations experienced by small business

If we look closely, we will find that in the day-to-day life of a small business a series of activities are carried out and decisions are made and often without having a common direction where everything points. In other words, many situations are experienced with only the present, the present moment, not the future and how that action can positively or negatively impact the company's business.

This is observed both in the internal environment, in everything that must be managed and executed, as well as in the external performance, in the way the company relates to its customers, competitors and the market in general. The lack of a guiding plan generates actions that are detached and sometimes harmful to the future of the company, and that will only be realised over time.

A larger purchase may be interesting at the moment but negatively impact the future of the business. A marketing action can be very attractive today, but it risks leading the company in a direction it would not like and will only realise in the future (due to the absence of the strategy). Hiring or firing employees may be a measure of solving one-off problems, but it can create even greater problems in the future. And so we could run across all departments of the company.

Amid the many changes that the market and small businesses undergo in a short time, having a plan developed with the help of strategy consultants like Johnny Grow using data-driven insights that can dictate your goals and means of achieving them can make all the difference to the success and security of the business.

Why is a strategy important?

The business strategy then emerges as the tool, the foundation, the foundation for small business growth. The strategy is not only important for complying with good management practices, but it is indeed good for the company: during strategy development, the company expands its knowledge of the market and makes more coherent decisions, and during execution, The company knows that it will be stepping on firm ground and the entire company can walk in the same direction.

If your dream is to go to Disney, then you need to plan how and when it will happen and work to make the dream come true.

Similarly, if your business plans to grow 50% over the next 3 years, you need to plan how this will happen. And this planning should not be superficial; but, on the contrary, it must collect and analyse information so that the path is taken and the decisions made are realistic and indeed the best choice.

Having a business strategy is not a luxury only for large companies, but it must be a priority for all companies.

How to start developing a strategy?

In the section discussing the development of a business strategy, it's important to consider tools that can aid in this process. One such tool is the Balanced Scorecard, which provides a comprehensive framework for strategic planning and management. Investing in software offering a Balanced Scorecard: Key to Effective Business Strategy can be a game-changer for small businesses aiming to align their activities with their vision and strategy.

The first question to be analysed and answered is whether your company is in a position to elaborate on this strategy with the resources it already has (people, experiences, knowledge, time, etc.). For help, see this article: Hire a consultancy or do the work internally?

Developing a strategy is sometimes a dense process that involves a lot of research, analysis and decision making. It is not something that takes place in a few days and should not be superficial. It is not enough to have a strategy just to say you have, but it is important to have a strategy that contributes to business development.

In a strategy several factors must be considered:

  • The business of the company and its composition.
  • The products and services offered.
  • Direct and indirect competitors.
  • Customers, potential customers, and non-customers.
  • Suppliers and partners.
  • Marketing and commercial actions.
  • The people involved.
  • Financial and fundraising planning.
  • The risks and opportunities involved in the business.
  • The deployment schedule.

The main starting point for starting a strategy is for the company's partners, managers and managers to convince themselves of the need and importance of this work. Otherwise, even if a strategy is developed, then it will be in the drawer because the company's awareness and culture do not favor the presence and execution of the strategy.

The help of a business consultancy

Knowing the importance of having a well-crafted business strategy, many businesses (including small businesses) turn to a business consulting firm. Consulting firms are specialising in small businesses that offer a strategy development service. One such company is Intelliplan Business Consulting, through its Business Strategy area.

The important thing is that the small business owner does not let his business be carried by the wind, but that he takes control of the business and dictates the way it should go. And this path and the way it is taken is determined and taught through business strategy.

Zoe Talent Solutions

[Header photo by Startup Stock Photos from Pexels]

Related Articles: