Did you know that, according to a recent study, most small businesses do not use strategic planning when marketing their businesses? Or that, according to a study by Ron Robinson, that businesses using strategic planning and management benefit fashion coats online from better decision making, objective assessments, and, ultimately, more progress?
In general, business owners want their success to come simply from their superior products or services. However, offering your consumers or clients best-in-class features and benefits is only half the battle. How do people discover your business exists? How do you retain customers? How do you plan on expanding?
It is easy to want your product or service to work for you. A new entrepreneur in town opening a small Italian restaurant may be relying too heavily on an up-and-coming chef he has discovered.
From there, he may take the advice of others in the industry and hope for the best - that people will discover the great food and the business will flourish. It's no accident that 60 percent of restaurants fail in the first three years of business.
To prevent against such failures, and to get the best results, it is vital to develop both a business plan and a marketing plan. These two documents will clearly delineate your strategies and tactics - your plan for future success and the actions that you will implement to create that success.
Instead of blindly trying marketing campaigns or adding features to your product, marketing and business plans will not only help you keep track of what works and what doesn't, but will also help you to make sure you are in the black financially as you begin new projects and try new plans.
What is the difference between a tactic and a strategy? A strategy is an overarching long-term plan.
This plan should consist of big ideas. If we return to our new Italian restaurant, the owner's business strategy could include a grassroots marketing campaign on the internet, sponsoring a local sports team, and finding a unique selling proposition that separates the restaurant from the crowd.
The strategy could also involve more abstract ideas, such as researching other restaurants in the area and famous Italian restaurants, or such as resolving to integrate innovation into your business at every step - from how you run your delivery service to how you keep your books.
Tactics, on the other hand, are smaller actions that work toward your larger strategy. For example, if you were working on your strategy of developing a grassroots marketing campaign on the internet, tactics might include advertising on popular local internet sites, posting in local forums, and creating a MySpace page.
If you were working on your strategy of developing a unique selling proposition, your tactics might include experimenting with a family dining model, serving fusion food, or creating a dinner theater.
Tactics are more elastic than strategies - while your main strategies will usually stay the same, tactics can be molded, stretched, altered, expanded, or abandoned altogether depending on their success.
If your grassroots marketing internet campaign is bringing in a significant number of new customers, you can put more time and money into that specific tactic - perhaps with online coupons or an expanded website that allows customers to make delivery orders online.
On the other hand, if your local sports team sponsorship has not garnered results, don't sign up next season and use your resources elsewhere.
Many business owners make the mistake of developing strategies but not implementing complementary tactics or trying out tactics without a larger strategy in mind. Neither works.
Imagine going on a vacation without planning your stops or packing anything. Transversely, imagine going on vacation without having a clear idea of why you picked the spot, what you want out of the vacation, or what you want to bring home.
The ancient military strategist Sun Tzu wrote in his timeless guide, The Art of War, "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."
Put more simply, having a plan but no call to action won't get you anywhere, while acting without a plan won't lead to any kind of result.
Here are a few more reasons it is vital for your small business to implement both strategies and tactics:
- Both strategies and tactics will make you more aware of your resources. Do you remember how easy it was to spend too much money in your personal life before you outlined a family budget? Your business is the same way.
If you spend money without a very clear purpose that leads to very clear fiscal results, you will run out of money. Outlining strategies is the perfect way to align your budget. Keeping track of how much your separate tactics cost and how much they bring in will give you a crystal clear picture of what works and what doesn't.
- Sitting down and formulating a plan can stimulate creativity. It's easy to get caught up in your business and follow the same trajectories as your competitors. Taking the time to think about strategy and to formulate new and interesting tactics will foster innovation, fresh ideas, and new angles.
Getting your employees involved in developing new tactics will also excite your workers and make them personally involved in your business' success.
- Having a hardcopy of your plan can lead to more money. Drawing up a clear, well researched, thorough business plan can act as proof that your business is viable and that those running the business are thoughtful, careful owners.
These business plans can lead to bank loans and investors, which can lead to opportunities for growth and expansion.
- Business strategies can solidify your mission and philosophy. The best businesses in the world are those with greater goals than simply making money. They are dedicated to innovation, to environmental concerns, to humanitarian purposes, to forwarding science.
Even though your small or local business may not be trying to save the world or cure cancer, you can have larger purposes in mind. These purposes, which will begin to shine through as soon as you begin developing your strategy, can motivate employees, catch the eye of clients, and make you feel great about what you do.
Especially for small business owners, you may not feel like you have the time or energy to formulate a strategy and the tactics to back that strategy up - you are flying by the seat of your pants and often things are moving too fast to think.
However, you will find that developing plans and plans of action will ground you and give you a much needed chance to take a deep breath and take a close look at what you are doing and why.
No comments:
Post a Comment