5 Factors of Business Strategy that Matter the Most for Your Start-up
By Bells Zhai
Business Strategy is the soul of every successful business, no matter SME or large enterprises. Since the pandemic, so many businesses are facing major challenges. It is time to take a serious look at your current business strategy to figure out a better survival plan. Or if you are brave enough to start your own business at this difficult time, you should have an even more cautious business strategy.
Here are the 5 most crucial factors of business strategy for your start-up
1. Clear Direction & Focus
To begin with, an organization should always be clear about the general direction that it strives toward. “Which industry sector is our organization aiming at?” should be the first question that every business owner should ask him/herself. To understand this question, one must learn about the market situation. Porter’s Five Forces Framework is one of the most commonly accepted and used tools to help understand the competition of business, and thus to make a reasonable business strategy.
This model is very general, thus it is more suitable for small, less complex firms. It is a great basis analysis for your start-up. However, the model does show weakness when it comes to quantitative aspects. Therefore, for a more detailed strategy, one must turn to other frameworks for help.
After being clear about the corporate mission and vision, the next step would be to determine what is the goal your organization should achieve. The major goal of a business is of course to maximize profits for its owners and/or stakeholders while maintaining corporate social responsibility. But clearly, knowing this is not enough to maintain a successful business in today’s fast-changing business world. You need to be SMART about your goal setting. Your goals need to be Specific, Measurable, Attainable, Relevant, and Time-Based. Make sure that you define both long-term and short-term goals separately.
2. Originality & Creativity
Originality and creativity is the vitamin for your start-up business. They keep your business energetic and give your business an attractive glow. But how could a start-up compete with existing firms who survived decades or even centuries in the market? The key is to be original and creative. Do not always copy what the other companies already did, even if they are in hip and in trend. At least, be more innovative on the basis of a trendy idea. Or even better, find the unique characteristics of your business and work on creating your own trend. One of the advantages of start-ups or SMEs is that there’s more space for exploring and experimenting.
You might ask, how to keep that creative juice flowing? Actually, it is not even that complicated. Firstly, start with regular brainstorming sessions, write your ideas and inspiration down like collecting stamps. And then, find people who are interesting and talk to them. Learn about their stories and talk about your ideas with them. In that way, they may give you valuable feedback about your ideas. Do not worry about others might steal your wonderful ideas and take them away. There’s a gap between ideas and actual business success. And last but not least, always be prepared to be wrong. It is only natural to make mistakes and learn valuable lessons from your mistake.
3. Sustainable Funding
Let’s be honest, even you have the best business ideas in hand, it is not enough if you don’t have stable and sufficient fundings to help you pull it off. Above all, you need funding to pay for the day-to-day expense for your business, such as salaries and insurance for your employees, utility bills, amongst other things must be paid. For a start-up, you need that seed money to turn your ideas into reality. Surely you can also hire interns without paying them, but then it is very difficult to motivate them and keep the morale high. Besides, the skillsets of professional talents who have years of working experience are definitely worth the money you pay them.
And once your start-up runs smoothly on the right track, you also need more funding to expand your business. Make sure you plan your funding quest pitch well, no matter which source you are using. Whether you have an angel investor or you crowdfund your business, it is smart to have a backup plan for funding. It is tough to keep your business running in this strange time of the pandemic. So make sure to have sustainable funding should definitely have a place on your priority list.
4. Flexible to Changes
It is obvious that the economy is taking a great hit since COVID-19. Although the pandemic caused a great recession for most of the industries, a few lucky industries have flourished due to the lockdown. For example, the digital technology industry, the pharmaceutical industry and the health care industry have all experienced a straight-up surge in profit. For these industries, the emergence of the virus is almost like a blessing in disguise. But it is undeniable that the world has changed because of Coronavirus and only the businesses who are ready to bend to the change can win the survival game in the end.
Apparently, not only the virus is ever-changing, mutating. Our planet is also changing rapidly. The Climate change issue has made human beings realized that changes need to happen immediately. It is now or never. Companies must develop a strategy that is sustainable not only for the firm itself but also for our mother planet.
Besides, with the technology developing exponentially, the structure of human society is updating faster than we thought. So many new tech-related jobs have replaced traditional labor-intensive jobs. Roughly estimated, the next technology singularity will appear in 25 years. Some unimaginable technology will appear and mature, and ultimately, changes the world, just like the internet/ information revolution has changed people’s life permanently.
So be ready to change and be flexible to change. Once you embrace the change, you will see unlimited chances.
The current economic crisis has shaken the confidence of even the best entrepreneurs. It is so easy for employees to doubt if they should stay put or develop a new career. A leader who can soothe the fear and anxiety of the team is the magnet for talents. Above all, be the confident, steady leader who inspires and empowers your employees. Furthermore, be a considerate team leader by checking in regularly with your employees. Listen to their concerns and share your wisdom. Encourage them to take responsibility and coach them through difficult tasks. And finally, build a strong relationship with your team. There’s no better bond than the trust you share with each other.
Moreover, acknowledge their contribution. Let them know that they are valuable assets for the organization and it wouldn’t be the same without them. Be personal and sincere with your appreciation. A charismatic leader should gather the team and get through the difficult time as a whole entity.
LSBC sincerely hopes that you can find useful takeaways from this article. Good luck with creating the best business strategy for your start-up. If you have any questions or suggestions, or if you want to see more articles like this, make sure to contact us!
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