6 Steps to build an effective business strategy for your business

There are a lot of companies out there that are successful and stand out from their competitors. While taking them as an inspiration, do we ever wonder how they made it to where they are today? Consider Amazon and Facebook who started from scratch and made it big over the years. How did they do it?

Ideas to start or expand a business are many. But strategies are the essence to put the idea into practice and reach the future state that you envision. Following are six simple yet imperative steps that will help you build an effective and appropriate business strategy for your business.

Step #1: Define your vision

True to the words of Simon Sink, a British-born American author, “People don’t buy WHAT you do; they buy WHY you do it.” The first and foremost step in building your business strategy is to define your vision. Think about companies like Google, WhatsApp, or Apple. These companies articulate their WHY, their vision, and their values before creating an action plan. This is what makes them exceptional in their space.

To give you context, consider Apple – which industry does the company fit in?

• Smartphone company?
• Consumer electronics company?
• Computer company?

Every one of us is aware of Apple’s reputation across all the above. So how did Apple achieve it? The answer is very simple. Apple knew what it wanted to do – be an innovator and challenge the status quo (START WITH WHY).

Hence, describe your vision to pivot your business in the right direction.

Step #2: Gather and analyze facts

Once you determine the destination, the next step is to figure out the means to get you there. Similarly, in business, once you determine your goal, the next step is to gather and analyze facts, that will help you sketch the road map to reach your goal. Perform analysis like SWOT (Strength, Weakness, Opportunity, and Threat) and PESTLE (Political, Economic, Social, Technological, Legal, and Environmental). This will help you understand the internal and external factors that will aid your progress and success of your strategy. Most importantly, indulge the right people for this process to ensure that the right and relevant information is obtained.

Step #3: Set long-term objectives

Almost 4.5% of strategy potential is lost due to poor planning (execute strategy). Formulate a clear and strategic long-term plan that is realistic. Conduct market research to know your focus markets and the customer needs. Leverage insights from the SWOT and PESTLE analysis to streamline resource and budget allocation. Then translate the long-term objectives into short-term plans. Cross-check the plans with your future goals. Finally, set up metrics to track and measure the results.

Step #4: Identify strategic obstacles

Make sure your objectives are SMART (Specific, Measurable, Achievable, Realistic, and Time-related). Once objectives are set, brainstorm on the risk factors that may lead to failure. Optimise factors that can affect the ‘time to market’ for your products/services. Identifying strategic obstacles will help you foresee the likelihood of your business’s success and future competition.

Step #5: Keep Stakeholders on the same page

Once you have penned down your objectives, potential risks, and a strategic plan that befits your goals and vision, explain it to your internal and external stakeholders. Educate them on what you are trying to achieve, why you are doing it, most of all, how your plan relates to the firm’s objective and impacts shareholder’s value.

Step #6: Analyze your performance

Only 20% of organizations review strategy execution on a monthly basis (myogsm). Reviewing the performance of your strategy is as important as building your strategy. Analyzing the performance of your action plan is what will help in identifying the areas that witnessed desired and undesired results. Using these insights, you can remodel your strategies for future projects. Remember, “Experience is the best teacher”. So, make it a habit to learn from your previous performances by reviewing them.

Strategies play a crucial role in defining a business’s success and establishing a competitive-edge. Hope, this article helps you build a solid one that will breathe life into your vision as well as generate revenue.