Why you should revise your business strategy
With current economic difficulties, it is crucial to ensure that you have a detailed business plan. As inflation rises, you should consider how to modify your business.
What is a business strategy?
A business strategy is a plan for your company created by management, which details how you intend to achieve your financial and growth goals.
The strategy should include your ambitions, how you are going to attain them and the time frame in which you intend to do so. Often, there will be both short-term and long-term goals set in order to work towards the end goal.
To maximise the performance of your business, you should consider regularly reviewing your business strategy and making changes where necessary.
To do this you will need to create a clear set of KPIs and monitor them through regular management accounts so you can see how your action affects your business’s performance.
A business strategy will focus primarily on principles as a way to understand the goals of the company.
Once these are clearly defined, these principles are used to inform the tactics, which will be used to achieve your goals.
A good way to set your goals is to use the SMART principle, which stands for:
- Specific – for a goal to be effective, it needs to be specific, not vague.
- Measurable – Clearly quantifying goals makes it easier to monitor progress and lets you know when they are achieved, or guides what needs to be done to achieve them.
- Achievable – Make sure your goals are realistic. There is no point in setting yourself up for a fall. Once one goal is achieved you can look to aim higher.
- Relevant – Take a look at the bigger picture, how does your strategy tie in with reality?
- Time-Bound – Set deadlines and try to stick to them. If you don’t you can easily lose track of where you are supposed to be.
How to adapt your business strategy
You should review procedures regularly and analyse the effectiveness of the current systems in place within your company.
A useful way to do so would be to conduct a self-assessment of your business so that you can target specific areas.
You should ensure your company has clearly defined your business aspirations. When creating these, you must consider if they are realistic – think back to SMART.
You need to compare the current position of your business with your goals to conclude how reasonable your aspirations are.
It is important to update your processes regularly. You should consider if your current procedures are efficient or whether they can be updated to allow an effective and smooth course of action.
You should consider how to maximise performance within your business. Ways in which you can do this include utilising opportunities, strengthening your workforce, evaluating your business, and prioritising your core values as a company.
To do this you should also ensure your business has accurate records. This can be aided by ensuring that other members of staff can update these if you as the business owner are unexpectedly unable to, or if you have large responsibilities in other areas of the company.
Again, having the latest financial and performance data, including an accurate balance sheet, management reports and access to business intelligence via cloud accounting software is key.
Need advice on improving your business strategy? Contact our team today.