The main reason as to why you need to devise your own business strategy is for avoiding business failure. You have to clearly state your business mission and vision within this process. The first stages of a business are very challenging and without a well outlined strategy, failure is likely to occur.
Some of the reasons as to why business fail include:
- Underestimating business start-up costs
- Misjudging the growth or size of the general market
- Lacking the necessary industrial experience
- Failure to offer profitability at the required price
- Insufficient investment in equipment and many others
The above factors can be divided into operations, offerings, sales or markets and finance. That is where your marketing strategy has to emphasize on.
Your business strategy needs to know the characteristics of businesses that are successful. The following characteristics need to be exhibited by businesses which need to be successful. Some of them are:
- One that develops a brand or franchise which is strong
- One that targets market segments which are expanding and attractive
- One that aims at rapid growths in terms of revenues
- One whose financing is sensible with prudent mix of debt and equity
- One whose cash position is strong with access to contingency funds or follow-on funds
- Should offer profitability which is above average in regards to return on the invested capital
You have also to clarify some of the business strategies which may be existent. In devising your own business strategy, it is vital to define the current (explicit or implicit) business strategies. This should be fully focused on its major functional areas such as operations, management, sales, marketing, finance, etc. This should be done by coming up with a number of short strategic statements. Some of them can be as follows:
- Your management team should be exclusively be comprised of family members
- Your implicit sales strategy should invest highly on promotion or offer a broad range of commodities at premium prices
- Retained profits are entirely going to finance the business without seeking for external equity or debt.
When the above are fully taken into consideration, you will definitely have come up with a reliable business strategy.