Management Strategies for Small Businesses
A small business has two goals to choose from: Increase profits but stay small, or grow into a larger business. You can spend time and effort creating a strategic plan to help you reach the goal you want, but how you implement it is what makes the strategy work. The small business owner is pulled in so many directions that simply creating the plan is a time-consuming responsibility for the business, much less its implementation. The solution could be to manage your business using the elements of strategic planning in a long-term, day-to-day effort.
Take a week or two to examine your industry, the competition and the general state of business in the local economy. Think about how trends have changed in recent years, and where you might be headed, as you go about your daily business. Take notes as ideas arise. After that, take some time to consider your target customer, what they value, and how you can meet their needs. Finally, take time to examine each sector of your business: how it works, whether it is efficient, and how it meets the needs of your customers. You will immediately see problems that can be solved with little effort. And you'll already have some ideas about how to adapt to the competitive environment and satisfy your target customer.
You May Also Want to Read... Basics of Marketing and 10 Marketing Strategies for the Growth of Your Organization
Positioning is just another way of asking yourself what you want to achieve in your business. The most important aspect of positioning is that it sets a specific direction for your business. For example, if a bakery owner positions his business to increase profits but it is still a small local establishment, his operations, inventory, marketing and customer service will be aligned with creating more varieties of baked goods in a more profitable way, and perhaps opening a coffee shop by expanding into the space next door. If your position is to grow into a much larger regional or national company, then your operations, inventory and marketing will be aligned with the development of statewide and eventually nationwide distribution channels. If you know the direction you want your company to take, align the various elements of your business with that directional objective. This avoids wasting time and effort on activities that do not add to your bottom line. With the alignment of your entire company in mind, delay the implementation of any changes until you have positioned your company and established a direction.
It is important to write down your plan, even if it is only a few pages based on the notes you made. Start with your positioning statement, detailing your directional goal. Then, list the benchmarks toward that goal, such as renting the space next door, hiring additional staff and buying new equipment. Include cost estimates. The rest of your strategic plan is an action plan for your operations, inventory, marketing and customer service, designed to meet those benchmarks. The value of a written strategic plan is that it serves as a touchstone. You can review your initial ideas when the pressure of running your business causes them to fade. It is also a good reference document that can be consulted in future years when looking for new ideas or reviewing ideas that worked well or did not work at all. Update your written strategic plan to serve as a business management journal. This way it can be a useful resource for you and your managers.
Ensure the success of your strategic plan by taking steps to implement it properly. While examining your industry and your own business, hold brainstorming sessions with your key employees. Including suppliers and customers in your sessions can also be beneficial. The cooperation of your managers, staff and suppliers is vital to the success of your plan. Keep your plan on target by holding regular meetings with managers and employees to discuss how the business is progressing and how to address problems. Communication with your employees is the best way to ensure the successful implementation and execution of your strategic plan. It is also a good way to get useful ideas for improving your effectiveness. No plan should be set in stone. If a better way is seen during implementation, change the plan accordingly.