WHEN YOU ARE STARTING A NEW BUSINESS BY - NIKET PATEL
Characteristics of Successful Businesses A successful emerging growth business is likely to display many of the following characteristics: Sensibly financed (with prudent mix of equity and debt). Strong cash position (with access to follow-on or contingency funds). Offers above-average profitability (in terms of return on capital invested). Aims for rapid growth in revenues (with profits lagging but in prospect). Targets expanding, or otherwise attractive, market segments. Develops a strong franchise or brand. Devotes substantial resources to innovation (R&D, offerings or market). Competes on non-price issues (e.g. quality, service, functionality). Very close to customers and responsive to their needs. Seeks specialist/leadership image with superior offerings. Well managed with high-grade staff & good people-management.
AVOID BUSINESS FAILURE Use market research to confirm demand and assess suitability of proposed offerings. Create a management team to offset any gaps in experience or expertise. Raise equity to reduce exposure to interest rate changes, reduce gearing etc.
Clarify Existing Business Strategies The business has been financed entirely from retained profits and without recourse to debt or external equity. The implicit sales strategy has been to offer a very broad range of products at premium prices and to invest heavily in promotion. The senior management team has been drawn exclusively from family members. Instead of doing R&D, the business copies competing products and sells them at a discount
Look into Future SWOTs for Strategies An effective SWOT (strengths, weaknesses, threats & opportunities) analysis is a key component of strategic development. It can prompt actions and responses: Have a look at the discussion on SWOTs and related matters in Developing a Strategic Business Plan Survey about Strengths & Weaknesses of Businesses Survey about Writing a Business Plan
Basic Strategic Planning Approaches Grow fast (and ahead of most competitors) Grow in line with industry Defend existing status (assumes a moderately strong starting position) Catch up (with leaders & then grow with or ahead of them) Turn around (from being an underperformer) Hang in (go with the flow but don't expend much effort) Harvest (milk the opportunity with a view to withdrawal)
Creating Strategic Combinations This Section presents several different combinations of strategies which could be used to help develop a range of strategic options EXAMPLE- Any Inc's central objective is to become a full-line supplier. It will reduce its cost base through introducing new processes as result of licensing-in technology in parallel with broadening its distribution activities financed byretained profits and external debt.
Compiling Strategic Statements Limit the number of strategic statements to what can be realistically achieved within a realistic time frame and, if necessary, prioritize them. It is possible that just one strategy is needed for each of the main functional areas It might help to summarize and sequence the key elements in a color-coded Gantt chart or table functional areas
Next Steps towards a Strategic Business Plan Software for writing business and marketing plans - Plan Write Business Planner, Marketing Planner and Expert Business Planner. Software for appraising business proposals and marketing strategies - Quick Insight (smaller businesses) and Business Insight (larger businesses). Financial planning software - Exl-Plan. Template for a business plan - Free-Plan. Online Strategic Planner for creating a 3-page plan.
Introducing PlanWare Papers on cashflow, financial, strategic and business planning topics. Advice on getting new business ideas, managing working capital, devising business strategies and much more. Pages devoted to famous business quotations and examples of bad business advice and mistakes.