A small business needs strategy. It is a myth that only large business need strategy. Strategy is a big word but hides a simplicity. It is just a plan to reach your goals with actions.
Let us take an example
- Goal is to be profitable by let us say in three years.
- Strategy is a plan to get there.
- Tactics are the action that needs to be taken
Thus, Strategy is plan of action ( tactics) to achieve your goals
It is that simple , it really is. All these three things are important to develop a long term business.
Why should a small business have a plan ? It is often repeated that
If you fail to plan , you plan to fail
But what exactly is planning. How do create a plan? Plan is not just how would things happen over a period of time. It is not only about how would you get from a point X in time to point Y in time. It is also about what would you do in journey so as to give you maximum benefits in future.
I am sure we have all been strategizing all the time whether for our marriage, career or business. We often take goals for strategy but in our head we plan . That is strategy.
Let me explain how can we do some planning ? If we wish to start a business, we need a goal . Now to start a business we need to understand what are the important components we need to plan about.
Let us take examples of customer
Customers can be
Thus now you have goals acquire customers, retain them and delight them. Create plan to do that. For e.g. if your goal is to acquire 1000 customers by the end of year, write how you are going to acquire them.
- Geographical distribution Target market : your state, region or country?
- What makes them tick?
- What makes them buy
- Income ranges
- Purchasing capacity
- Channels they use such as Internet, TV or newspaper
- Anything else that comes to your mind
Once you have written these factors you know what you need to do next. You can acquire customers
- Advertising on Newspaper
- Acquire them on Social media
- Personal meetings
We are at the bottom of strategy pyramid, where we are not reaching the actual actions but strategy is slowly transforming to actions. Now we have decided to that advertising on newspaper is our primary strategy let us see how we can break it down
- Our target market reads business newspaper
- They notice large ads vs classifieds
- They read business newspaper at leisure ( time for change of strategy)
We are thus at the final stage of strategy. Now we have to work physically to make things happen( that is right no more sitting in office). Here are some of the actions that would result from our strategy.
- Find right newspaper as per the plan
- Create ad or have them created professionally
- Find either the cheapest or the primary ad placement
- Buy the placement and run the ad
At this point the strategy-tactics scenario comes to an end. But this is not really the end of it as tactics will generate some result. These results have to be monitored and fed back into strategy.
For e.g. one of the ways to increase blog readership is to network with other bloggers and comment on their blogs. We all know it but we cannot differentiate that it is just the same strategy-tactics in action.
Once we do this , we see an uptick in our traffic and we find that our strategy of getting more readers by commenting is really working. This is called as “winning strategy” :). Once we have winning strategy we can actually create more tactics to improve our strategy or to fine tune existing strategy.
I hope I was able to explain the concept in simplicity.
What is your Goal- strategy – tactic matrix? Can you share some of your insights? How much important it is to have such a matrix?