PART 5 – GUIDE TO A BETTER BUSINESS

STRATEGISE:
How are you going to achieve your vision?

THE BIG PICTURE

WHY

VISION

PRINCIPLES

A
C
T
I
O
N

STRATEGISE

EXECUTE

Success, Pupose, Freedom, Fulfilment, Peace

How you are going to successfully attain the vision you’ve defined within your Big Picture?

By strategising, you start to anchor the second cornerstone of business success: ACTION.

Here, you’ll design the high-level methods you’ll use to:

1. Gain and maintain an advantage in your market

Depending on your business type, you might be trying to:

  • Capture a portion of an existing, stable market (e.g. painting residential homes); or
  • Expand an existing market (e.g. attracting new customers to your market with a new type of offering like foam surfboards did for the sport of surfing); or
  • Grow an entirely new market (e.g. Cirque Du Soleil created a completely new form of entertainment by combining circus and theatre).

Whichever applies to your business, if you’re going to achieve your goals, you’ll need to ensure that you’re consistently seen as the most attractive option to enough customers.

2. Ensure your business model is scalable, profitable and viable into the future

For a business model to be scalable and profitable, it needs to:

  • Operate in a market or industry with enough customers willing to pay for your product/service.
  • Operate in a market or industry with enough customers willing to pay for your product/service.
  • Hire employees to be trained to perform ANY role within the business.
  • Be able to afford your expenses until you become profitable OR be able to obtain the necessary funding at the right time.
  • Have the means to grow your capacity to make sales.
  • Be aware of any negative trends in your industry, such as low-cost competitors, and have enough advantages and opportunities to be able to overcome them.

The traditional approaches to business strategy

If you’ve read the business books and attended the courses, you’ll be aware that there are two traditional approaches to business strategy.

To us, neither is tremendously relevant to the modern small business operator.

Here’s why…

Approach 1: Differentiating yourself from your competitors (i.e., standing out from the rest)

This is still perhaps the ‘holy grail’ of business strategy. But to be truly different today means offering something that cannot be found anywhere else on the planet!

The likes of Apple or Uber may be able to achieve true innovation but how can small businesses achieve that?

It’s almost impossible to differentiate yourself in any other way than via innovation. You may think you’re better than the rest (better service, better quality, better value, more caring, better relationships, more reliable, etc.) but your competitors believe and say the same thing!

So what is a customer left to think?

They may even be turned off by constant proclamations of being “the best”.

Approach 2: Being able to produce or sell your products at a lower price

A number of large online businesses (such as Amazon, eBay and many others) are now able to achieve cost savings that are unparalleled.

With ever-improving technology developing at such a rapid pace, even if you could find an area to save costs today, your competitors would likely find it tomorrow.

The traditional approaches to business strategy

If you’ve read the business books and attended the courses, you’ll be aware that there are two traditional approaches to business strategy.

To us, neither is tremendously relevant to the modern small business operator.

Here’s why…

Approach 1: Differentiating yourself from your competitors (i.e., standing out from the rest)

This is still perhaps the ‘holy grail’ of business strategy. But to be truly different today means offering something that cannot be found anywhere else on the planet!

The likes of Apple or Uber may be able to achieve true innovation but how can small businesses achieve that?

It’s almost impossible to differentiate yourself in any other way than via innovation. You may think you’re better than the rest (better service, better quality, better value, more caring, better relationships, more reliable, etc.) but your competitors believe and say the same thing!

So what is a customer left to think?

They may even be turned off by constant proclamations of being “the best”.

Approach 2: Being able to produce or sell your products at a lower price

A number of large online businesses (such as Amazon, eBay and many others) are now able to achieve cost savings that are unparalleled.

With ever-improving technology developing at such a rapid pace, even if you could find an area to save costs today, your competitors would likely find it tomorrow.

Our small business strategy philosophy

Small businesses do have options to set themselves apart.

We believe that a strong business strategy has the following three key components:

1 

Positioning

Trying to demonstrate that you’re better than your competition is almost impossible but there is an alternative: positioning.

This essentially involves taking a unique marketing position by narrowing your focus to a specific industry, client type, demographic or service offering.

Instead of trying to be all things to all people, you aim to provide exceptional value to a very specific type of customer.

Positioning helps your business because:

  • You’ll be able to clearly identify who you want to work with and tailor your message to resonate with them.
  • The deeper you go, the more knowledge you’ll have of who your customers are, how they think and how you can help them get what they need.
  • You won’t need to make statements like “we’re the best” to claim you’re different. Instead you’ll just be different. And this will help you stand out in a crowded marketplace.

Think about a specialist doctor. If you have a scary health condition, you’ll no doubt pay significantly more to see an expert on that exact problem rather than a regular GP. A specialist treats only a narrow range of patients but is extremely valuable to those people.

Our small business strategy philosophy

Just like a specialist doctor selects an area of expertise, you need to identify the characteristics of customers who you’ll be able to provide most value to.

This is often a niche market, based on:

  • Demographic factors e.g. a particular age group, gender, income level, religion, belief, culture or family size.
  • Geographic factors e.g. people living in a particular suburb or city.
  • Industry factors e.g. businesses or employees working in a particular industry.

This strategy works equally well for products and services.

For products, it’s important that the positioning decision is made prior to developing the product. It’s very hard to take a generic and non-specific product and convince a particular niche market that it meets their specific needs.

Example: Pana Chocolate

Pana Chocolate have successfully positioned their product. They developed it based on the needs and desires of health-conscious consumers, i.e. only healthy ingredients.

Because of this, they achieved significant penetration throughout health food stores in their local area. This led to word-of-mouth marketing within their niche market and further growth, to the point that they now have national distribution through Woolworths.

Nerd Fitness?

There are different degrees to which you might promote your product or service to your niche market.

In the most extreme case, you would name your brand to directly appeal to the chosen niche. Everything you do and all your messaging would be about that particular niche.

For example, a business known as Nerd Fitness caters to, you guessed it, nerds who want to get fit and have their own way of thinking about it, talking about it, and pursuing it.

Alternatively, you could have a slightly broader scope by targeting multiple niche markets. This might result in a less-specific brand name and would probably make other marketing efforts (such as SEO or social media) more difficult to optimise.

For instance, how about a meal delivery service that focuses on city office workers at lunchtime and busy families in the evening?

2 

Alignment and capacity

Your business will never grow if it always revolves around you.

At some stage, you’ll need to attract and retain quality staff to grow your capacity to deliver. These people become the most valuable resource in your business – and, indeed, any successful business.

So, how are you going to build this resource?

In the modern workplace, you can no longer hope for employees to stay loyal and give you the best years of their lives unless you really give them clear reasons to.

It’s fundamental to any business strategy to determine how you will attract and retain the best people.

There’s a lot to consider here but the two most important areas are:

Remuneration

Money is, and always will be, an important consideration for any employee. The higher the remuneration the longer you’ll hold onto good people.

However, it’s not always as easy as just paying more. Can you afford it?

It’s more about being smart with your remuneration structure and aligning the interests of your people with the business.

At a minimum, every business should have an incentive component to their remuneration packages for key employees.

Any incentive needs to be thought through to ensure that it doesn’t lead to adverse outcomes, be gamed in a negative way or contribute to an erosion of culture.

The incentive needs to be clearly defined, attainable, and achieve a win/win. The best packages have a long-term focus, where the longer the employee performs well, the better their rewards. This makes it more difficult for them to walk away but it’s still a win/win.

Personal development & purpose

Being in business allows you abundant opportunities to seek purpose and achieve fulfillment. However, you need to recognise that your people also want this in their own lives.

By providing staff with ample opportunities to grow as people and as experts within their chosen profession/trade, a smart business can grow with its people.

Try not to put limits on what your staff can do. Think big and take them on a journey. Business should be fun and putting limits on what you or your staff can achieve is restrictive.

3 

Execution

Business is imperfect. A lot of your competitors really are bad, regardless of how good they think they are. They provide a poor product or service and they aren’t reliable. Why?

Because knowing what you should do is easy; it’s the execution that’s hard.

The overweight smoker knows they should go on a diet, quit smoking and exercise more, but knowing isn’t enough.

Most of your competitors won’t:

  • Invest in their business adequately
  • Do the hard things well
  • Execute relentlessly

This is your opportunity to get ahead.

It’s taking action that separates the successful business owner from the failed one or the one that simply hangs in there year after year without any real progress.

You and your team first need to be clear about what you should be doing; and then adopt a relentless, unyielding focus on incremental progress.

It’s all about the consistency of working ON your business and doing the right things rather than more of the wrong things.

We’ll help you systemise how to approach this, to ensure you stay true to your strategy and are consistently executing.

3 

Execution

Business is imperfect. A lot of your competitors really are bad, regardless of how good they think they are. They provide a poor product or service and they aren’t reliable. Why?

Because knowing what you should do is easy; it’s the execution that’s hard.

The overweight smoker knows they should go on a diet, quit smoking and exercise more, but knowing isn’t enough.

Most of your competitors won’t:

  • Invest in their business adequately
  • Do the hard things well
  • Execute relentlessly

This is your opportunity to get ahead.

It’s taking action that separates the successful business owner from the failed one or the one that simply hangs in there year after year without any real progress.

You and your team first need to be clear about what you should be doing; and then adopt a relentless, unyielding focus on incremental progress.

It’s all about the consistency of working ON your business and doing the right things rather than more of the wrong things.

We’ll help you systemise how to approach this, to ensure you stay true to your strategy and are consistently executing.

Examples of good strategy

  • A fashion expert sets up an online clothing business (a hugely competitive market) but positions themselves to focus on only maternity occupation-specific clothing: a much less competitive market, allowing the business to really help customers with a specific need.
  • A public relations firm focuses only on plastic surgeons. If pharmaceutical companies want to reach plastic surgeons effectively, they’ll need to use this publicist. They will know all the journals and conferences and most of the doctors. If your job depended on hiring the best person in the world to publicise your new product to plastic surgeons, who would you hire? (Example taken from Purple Cow, Seth Godin)
  • A restaurant in Sydney called Bistecca specialises in offering only T-bone steaks. Its business is built around the idea that their chef cooks the best T-bone steaks and their website, advertising, branding and restaurant’s interior design all support this idea.
  • Another restaurant in Sydney called Saint Peter is based around interesting and innovative ways to prepare seafood, particularly the cuts (like offal) that are often valued the least. Such targeted positioning has resulted in the chef becoming known as an expert in the field of cooking seafood, leading to a successful side business selling specific seafood-cooking utensils, tickets to cooking classes and seafood cookbooks.

Restaurants like the two mentioned are great examples of businesses that have nailed their positioning.

If you were taking a friend out to dinner for a good steak or seafood, maybe one of these would be at the top of your list? And budding chefs who are passionate about meat or seafood would probably be doing everything they can to get a job at either of these restaurants.

Perhaps it’s worth recalling your dining experiences at places that have no clear strategy. These are the cafes and restaurants that try to cater to the masses: a huge menu with no particular focus – a little bit for everyone.

Are they consistently booked-out like the ones targeting a niche market? Do you think the staff are as passionate about the food they are serving? And how about their marketing – how would they attract new customers?

GUIDE TO A BETTER BUSINESS (PART 1-7)
< Intro 1 2 3 4 5 6 7 >
By |2021-05-23T03:18:44+00:00April 10th, 2021|0 Comments

Leave A Comment