A Business Strategy is a Guide to Business Success

Posted by Philip Wong on

But what is a Business Strategy?

 The Oxford Reference (Dictionary of Business and Management) defines a business strategy as

 An overall longer-term policy for a firm that:
  • Coordinates the separate functional areas of a business, like sales, marketing, finance and accounting, customer service, human resources, research, purchasing and distribution
  • Defines business objectives
  • Analyses the internal and external environments, and
  • Determines the direction of the firm [1]

 

    In short, and in simple terms: it is deciding where you currently are, where you want to go, and how you are going to get there.

    How Do you get to where you want to go?

    You must FOCUS ON YOUR GOALS

    "A goal is a dream with a deadline" – Napoleon Hill (1883-1970) 

     

    Think about it.

    If you were preparing to climb Mount Everest, you would need to start by writing a plan for the training required – for example, (a) practice with uphill hiking, (b) walking and (c) stair-climbing.  A plan is like a safety net.

    For as many small businesses that believe they can fly without a plan - a parachute or safety net, it is no wonder that there are so many that fail.

    Answer:  You need a map or guide so you don’t lose your way.  You need FOCUS.

    Small businesses fail for 11 reasons 

    Moya K. Mason lists 11 common causes of failure.  These include:

    1. Choosing a business that isn’t very profitable, because even though there is a lot of activity, the profits never materialize to the extent necessary to sustain an on-going company
    2. Inadequate cash reserves, known as undercapitalisation
    3. Failure to define and understand your market, your customers, and your customers’ buying habits
    4. Failure to price your product or service correctly.
    5. Failure to adequately anticipate cash flow
    6. Failure to anticipate or react to competition, technology or other changes in the marketplace
    7. Overgeneralisation
    8. Overdependence on a single customer
    9. Uncontrolled growth
    10. Believing that you can do everything yourself
    11. Putting up with inadequate management. 

      Other reasons why businesses fail in their early years include - poor business location, poor customer service, unqualified or untrained employees, fraud, lack of a proper business plan, and failure to seek outside professional advice.

    Discussion

    I think that facts speak for themselves, Jonathan Goldhill, a small-business consultant and former director of an economic development centre in California's San Fernando Valley, USA said. "I would say that the primary reason for the failure of start-ups within three years is usually...
    ”management's failure to act, or management's failure to react, or management's failure to plan."

    Conclusion

    These notes aren’t meant to scare you – but to prepare you for the rocky path ahead in business, whether you are starting out or if you already have started your business and wondering why it isn't doing what you thought it would do. 

    Underestimating the difficulty of operating a business on a day-to-day basis without the results you expected, is one of the biggest obstacles that entrepreneurs face.

    However, success is definitely achievable with – patience, hard work, objectivity, the willingness to bring in needed help, and to share the power – which are all crucial to success. 

     The source for this advice comes from 

    Moya K. Mason [2] freelance researcher, consultant, fact checker, writer, editor, proof reader, information scientist, project manager and search engine optimization adviser. 

    Moya passed away on July 7, 2012 .  Notice on moyak.com

     

     READING LIST

    1. Business Strategy, A Dictionary of Business and Management (6 ed.). A Dictionary of Business and Management (6 ed.). 2016, Online: Oxford University Press.
    2. Mason, M.K. (2019). What Causes Small Businesses to Fail? Moyak.com. [Retrieved 2018, Jan 29]; Available from: http://www.moyak.com/papers/small-business-failure.html.

     

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