Wednesday-October 18, 2017
Kheir Consulting
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Do I Need a Strategic Plan?
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Do I Need a Strategic Plan?
By: Andy Kheir
Kheir Consulting
http://www.kheirconsulting.com/

Many small business owners have asked this question. Being small does not mean that you should not have a big picture understanding of why you do business the way that you do. That is all that a strategy is - an answer to why. A plan answers how. A proper strategy is a long-term, big-picture, approach to success. Having a well thought out business model that allows a company to not only earn sustainable revenues but sustainable profits is a requirement in today's marketplace. Knowing why you are selling what you do and why you want the customers you do is crucial to a well thought out business model.

Often, businesses start with a product or service and then try to sell that product or service to anyone that will buy. This can lead to very inefficient marketing efforts and general business problems by trying to be everything to everyone. Knowing why you selling that product or service and why you are selling to that chosen marketing can significantly focus efforts and improve results.

  • Know why your customers buy from you.
  • Know why your customers SHOULD buy from you.
  • Increase profits.
  • Increase efficiency.
  • Have a smarter business.

A proper marketing strategy will have customer loyalty and customer satisfaction as an objective. Knowing how to obtain the objective can be elusive. As such, many other parts of the business should be in place to back up and fit with the marketing strategy. You should never develop a strategy without considering how you will implement it. This means that in order to develop an effective strategy, you need to also develop a basic plan. The fit between the two allows you to evaluate the realistic effectiveness.

When you develop a plan, you answer how you will address and act upon business needs. Evaluating the why aspect is often more important. You can develop a 'perfect' radio advertisement for your company. It can have a great price and the perfect time-slot. Before you do this, ask yourself - why is a radio advertisement needed? Why will it help my customers buy from me? Why is the radio better than other avenues of reach? Why am I trying to sell to the people that the radio will reach? If you are selling something like doors or computers or a service like maid services, it is likely suitable, maybe not. Many of these sales do not rely on a personal relationship. If you are selling something that is heavily reliant on personal relationships or trust like architectural services or general contracting services, it is likely not a good choice. Then again, if you are large and trying to increase brand awareness, you may wish to reinforce other efforts. The key is to know why you are doing it. If you can answer that, you will avoid the majority of the mistakes that businesses make.

This goes for marketing efforts, but also applies to operational concerns (why are you manufacturing here rather than in China, why are you using that machine, why are you using that process?), human resources (why do you want someone in that position, why do you need the background that is stated?) and financial considerations (why buy a new building, why invest in X rather than Y, why expand at that rate, why do you have a large cash war-chest?). In business, people spend 99% of management asking how and 1% why. Smart businesses see a partnership between how and why. They will spend a near equal amount of time challenging the assumptions and constantly asking why, as they do developing a plan for how they will accomplish it.

You always start a strategy with a goal. Once you have a goal, ask yourself why that is your goal! Without a well defined goal (often started with a vision and mission statement, but leading to more specific targets and objectives), you cannot tell if you are achieving the results you want and need. Many people and businesses do things without even basic goal. This is usually why the rest of the strategy is very difficult to establish. If you do not know where you are going, determining if the reason why you the route and method you did is impossible. Think of a trip. Even if your goal is to tour an area and not a specific destination, that is still a goal. If you simply start a trip, not knowing what you want and why you want it, you will never get there without pure luck. If your goal is to go to the Bahamas, you always know when you have reached it. If your reason why to go to the Bahamas is business, your trip will be different than someone who is going to relax. Without knowing that your goal is the Bahamas, you would not know that you need to fly or take a boat (it is an island after all). If you reason why is business, you will likely fly for time consideration, while if your reason for going is to relax, you take a boat cruise. The how can be answered many ways (boat or plane), but how should always to tied to why so that you can evaluate if your goal is met.

When you answer the question of why, you need to know certain things: your competition, your environment, your customer and yourself! This means that you need to find out about other players in your market, the market itself, items that have an impact on the market and the players (such as politics, regulations, economic development and technological development), how they interact and what you do well. This comes out in market research, SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, PEST (Political, Economical, Social and Technological) analysis, a competitor analysis, and likely a Porter's 5 forces analysis are a few core items. Most of the items listed should be know to business owners. Some of the terminology will be foreign, but someone in business should know what their competitors do, the market, and themselves. The rest is an explanation of influences. Why do we need to know this? GOOD QUESTION! Without knowing these items, businesses cannot give clear rationale for why they are doing something. Why spend money developing brand awareness for a product that will be illegal in 1 year? Why undercut the competition when the customer's main concern is quality? Why offer a product that a competitor can offer with greater quality and at a lesser price? Why develop a product that your business does not have the capabilities of producing or delivering?

If this sounds basic, it is - but almost all of the major business mistakes we see, come from not asking why. This means, that if you want to avoid wasted efforts and decrease failures, you need to ask why. When you answer the question of why, you need to have knowledge and information that would not be uncovered if you had not. When you answer the question of why in one area, that knowledge, information and rationale can be used when you try to answer the question of why in other area, making the entire decision making process smarter and more efficient. This makes the entire business smarter and more efficient. The smarter and more efficient a business is, the more money it makes. So the question 'Do I Need a Strategy?' is actually 'Do I want to make more money?'. If your answer is yes, ask yourself why.


Kheir Consulting assists small businesses in the areas of marketing and strategy, helping them plan, promote and profit. Through a strategic approach, we help create smarter businesses that can make faster and better decisions.

www.kheirconsulting.com


 



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Description
Do I Need a Strategic Plan?-Articles-Strategy,Kheir Consulting provides small and medium sized businesses with consulting in the areas of marketing and strategy.