Writing a business strategy requires a lot of preparation before you write a single word.
You’ll need to think about realistic targets for your business, then work out what can help you get there. Research, creative thinking and number-crunching will be required. It takes time but, done well, can pave the way to a profitable future.
We’ve broken it down into easy-to-follow steps below and – just in case you’re still skeptical – we’ve listed all the benefits of writing a business strategy too.
STEP 1 : What is a business strategy?
A business strategy is a document that provides objectives and direction for a company. At the heart of any business strategy is the aim of achieving financial security, competitive advantage, and often growth too.
If you have staff or stakeholders, your business strategy helps everyone understand the direction of travel and pull together for a common goal.
But don’t think strategy is just for bigger businesses. Even if you’re the only person who works in your company, having a business strategy can give you a competitive advantage.
Usually written by the managers of a business, a business strategy:
- describes your business and its purpose
- explores the environment you operate in
- defines your goals for the next three- to five-years
- outlines what you’ll do to achieve them
- allocates and prioritises the necessary resources
- explains what success will look like and how it will be measured
Like anything, by breaking things down into easy-to-manage chunks, it seems much more manageable.
Strategy is for small businesses too!
Strategy isn’t just for bigger businesses. Even if you’re the only person who works in your company, having a business strategy can give you a competitive advantage.
STEP 2 : What are the benefits of writing a strategy for a small business?
If there’s one thing that’s guaranteed to increase your chances of business success, it’s writing an effective business strategy.
As a small business owner, you’ve got plenty on your plate, so finding the time for business planning and admin can be difficult.
But think of writing your business strategy as short-term pain for long-term gain. Investing the time to research and write an effective business strategy now can save you time in the future.
More likely to succeed
It’s obvious really, but if you know where you’re going, it is much easier to get there. Writing a business strategy is like planning a road trip. You need to understand where you’re going and why, the terrain you’ll have to navigate, what you’ll use to make the trip, and how you’ll know when you’ve arrived. Without that prior preparation, you could easily get lost or stuck somewhere unexpected.
Improved focus and clarity
Without a business strategy, there’s a risk that you’ll flip-flop between different ideas, investing time and money on activities you hope will help your business. You can end up feeling overwhelmed and overstretched but seeing little return on investment. A business strategy puts an end to this unproductive back-and-forth by providing focus and clarity about what you need to do.
Simplify decision making
A business strategy can make decision-making much easier by providing a framework to assess the benefits of different options. If something doesn’t fit into the strategy, you can jettison it and move on, saving you time and mental energy.
Understanding your strengths and confronting your weaknesses head-on can be beneficial. No business succeeds by burying their head in the sand. A business strategy gives you the opportunity to surface areas for improvement that can benefit the long-term future of your business.
Forms the basis of work plans
Whilst a business strategy is a long-term document, the contents break down into smaller steps towards success. From your three- or five-year plan, you’ll derive an annual plan, then break it down into quarters, and even monthly work plans.
STEP 3 : What is the difference between a business plan and a business strategy?
Although business plan and business strategy sound like they could be interchangeable, they are actually two different documents, with very different roles.
A business plan
If you’ve started your own business, you’ll probably have already written a business plan. This is a document that outlines your business and plans activity for the first year.
It is written mostly for your benefit, to explore the feasibility of your proposed business and put some goals in place. If you are going to look for funding, you’ll share your business plan with the lender to demonstrate your suitability.
A business strategy
A business strategy, on the other hand, is for more established businesses. It explores the objectives and opportunities available to businesses. It provides strategic direction to your business activities and, if you have them, your staff. It will help you grow and succeed.
(Not sure whether you’re ready for growth? Ask yourself these questions to discover whether your business is ready to grow…)
|Business plan||Business strategy|
|Starting a business||Steering a business|
|Written when planning to start a business; explores feasibility and viability||Written to provide direction to an established business; plans for growth and sustainability|
|Used to secure resources – eg a loan||Used to deploy resources – eg budget and staff|
|Covers a shorter amount of time, usually a year||Longer-term, often 3 to 5 years|
|Usually only for reference by business founder and funders||Shared with staff and other stakeholders|
What’s the difference?
Put simply, a business plan is about starting a business; a business strategy is about steering it.
STEP 4 : How do you write a business strategy for a small business?
There are four stages to researching and writing a business strategy. Actually writing the strategy is a small part of the overall process. Before you get to that point, you need to put in a lot of brain work: brainstorming, considering about your options and deciding which to pursue.
1. Establish where you are now
A business strategy starts with an understanding of what your company does and why. This will help you write your mission and vision, which is a summary of your purpose and proposed future direction. Think about why you started the business, who you serve, what you offer, and the value you add to your customers.
It is also helpful to take a snapshot of your current performance and structure. This will help you plan the resources you need to achieve your objectives. It also provides a way to measure your progress towards those goals.
If you have trading / financial information, include it here. Check out this guide on how to get your accounting house in order.
Write yourself a road map
A business strategy is a road map from where you are now to where you want to be in the next three to five years.
2. Think about where you want to be
A business strategy is your plan for the next three to five years. So this is your opportunity to look ahead and think what you’d like to achieve. It’s an exciting and energising prospect. But where do you start?
- Think about your personal aspirations – Do you want to maintain or grow your business? Do you enjoy working in a microbusiness or do you want to start an empire? Are you excited about taking on staff and becoming a manager? Or do you want to stay in your current role?
- Look at how the competition has developed over the years – Do you want to follow in their footsteps or forge a new path?
- Think specifically about your business goals – Do you want to increase sales? Win more customers? Develop more products? Make more profit? Gain market share? Improve customer satisfaction?
- Think about what’s realistic in the timeframe – There’s nothing wrong with dreaming big but a strategy should be achievable
- Take a look at our guide – How To Start Your Own Business and consider how much of this you still need to do
This is where the magic happens
Nothing worthwhile is ever easy. Picture your business a few years from now and think how pleased you’ll be that you wrote this strategy.
3. Identify opportunities, barriers and tactics
This is where the real thinking happens. It’s ok to feel stretched and challenged by this part of the process. The saying ‘nothing worthwhile is easy’ definitely applies to writing a business strategy. Luckily, there are lots of tools you can use to help you tackle this stage.