Archives#strategicplanning Archives — C. Lynn Northrup, CPA, CPIM
Planning for Success
Planning for success will create success. The pandemic has challenged existing small businesses in addition to the startup of new businesses as a means of economic survival. Creating a business plan will help you:
- Think through your entire business strategy.
- Understand your financial requirements.
- Secure funding.
- Develop your marketing message.
- Identify key customers and how to provide them value.
- Recognize operational challenges.
The process of developing and documenting your business plan gives you a chance to make your mistakes on paper so you can avoid making them. This saves time, money, and costly mistakes.
Some things to consider in your planning process:
- Understand your customers and their needs to help position you to create value for them.
- Develop solutions that fit customer needs and solves their problems.
- Describe how your business works and how you deliver value to customers.
- Identify and analyze your main competitors so you can create a competitive advantage.
- Assess your target market to make sure it’s big enough to make you profitable.
- Analyze your financial projections and develop scenarios of what could happen.
- Make sure your value proposition is sustainable and scalable.
Creating a careful and complete business plan is a blue print for success.
Many new entrepreneurs will start out and not know where they can get help with information they need to get started. Here is information on some resources for small businesses that might be helpful.
- https://digital.com/how-to-take-your-small-business-online/
- https://digital.com/business-loans/
- https://digital.com/business-credit-cards/
Get started on planning for success today!
What is Strategic Planning?
Everyone talks about doing strategic planning, but how many really understand it. I think it is simple and can be in three steps:
- Where are we?
- Where do we want to be?
- How do we get there?
How many businesses really take the time to stop and address these questions? Many organizations just go from day to day and never dig into the real issues raised by these three questions.
Strategic planning isn’t easy, but the payoff can be huge. It can alert organizations to opportunities in addition to challenges that lie ahead. We operate in a complex and rapidly changing world and gaining insight into the future can make the difference between success or failure. It can help avoid trouble or help to maintain control during a period of rapid change.
Assessing where we are involves looking at financial history, marketing, competition, problems, and opportunities. Pulling all this information together is hard work to create a foundation for planning.
Where do we want to be provides the results for visioning, innovation, and looking beyond right now. I think visons are the result of dreams of where we want to be. We then need to convert them into measurable goals and objectives. This can include profit and sales targets, market share, and ideas for new products and businesses.
We create strategies into how we get where we want to go. This is the nitty gritty of how we accomplish goals and setting new directions to take us into the future. Strategies can include some old established ideas in addition to new concepts that are completely out of the box. The planning process will detail the costs, resources, projected results, and a timeline for meeting our objectives.
The result of our planning boils down to what we need to do today to make the future be what we want it to be.
Strategy – The Competitive Edge
Having a strategy is essential to success. It gives you the competitive edge in business, politics, and everyday life. Strategy represents the steps and actions that need to be implemented to fulfill your vision and achieve your mission. Success in strategic planning doesn’t come easily and in many instances fails to contribute to strategic thinking.
How do we develop a strategy that will create a competitive edge? First, utilize an approach called the strategic thinking process outlined in a previous blog post. Thinking strategically and focusing on simple processes to apply concepts like Blue Ocean Strategy will improve you chances for success. Crafting a successful strategy requires an understanding of Blue Ocean Strategy.
Blue Ocean Strategy is focused on providing value propositions to customers in ways that have a positive impact on the company’s cost structure. Finding directions or features your competition hasn’t offered is the key to success. Implementing these new concepts combined with eliminating factors others take for granted is a big piece of the puzzle. This creates cost savings from generating higher sales volume as a result of the superior customer value created from new concepts never before offered.
Blue Ocean Strategy essentially reconstructs market boundaries. This is achieved by going beyond looking at just the numbers and focusing on a bigger picture. Getting past what is being done and developing a new source of customer value is critical to successful strategies. This requires development of the proper sequence or steps to allow a strategy to be successful.
Strategic sequence includes having exceptional customer buy in to the new business idea. Your selling prices need to be easily accessible to the target market of buyers. Once you know what customers want and are willing to pay for, you need to be capable of attaining costs which will allow achievement of targeted profit margins. Finally, you need to be organizationally capable of putting the new strategy in place and making it work. All of these steps may sound simple, but in reality will likely involve considerable effort.
Blue Ocean Strategy success depends on the success of the following three propositions:
- Value for customers.
- Profit from revenues less the cost to produce and deliver value.
- People that are motivated by the incentives created by the strategy and effort needed to support and implement it.
When these three propositions achieve a combination of differentiation and low cost a Blue Ocean scenario is created that builds sustainability and formidable barriers to imitation.
Red Oceans result from failure of the three strategy propositions to create differentiation or low cost. Competing in Red Oceans opens the door for extensive competition and lower profits or losses. Many different factors can allow other companies to imitate your strategy and undermine success. Creating barriers to imitation through proper strategic alignment, effective organizational structure, branding, and effective economic and legal steps is essential to preventing Red Ocean environments.
Blue Ocean Strategies can create a competitive edge, but it takes work. Hopefully, you have a clearer understanding of what is involved in crafting a successful strategy. Thinking strategically to identify and create Blue Oceans is going to take you out of your comfort zone. But isn’t it better to achieve new success in contrast to failure resulting from swimming in Red Oceans?
