The importance of a business strategy

A well-thought-out business strategy can help project growth, navigate through economic constructs and enables you to think objectively about key elements in your business that assists with your decision-making. The business strategy is your road map to help you navigate where you are now and where you want the business to go.  And a key aspect to you business strategy is to know your numbers.

Here are some important questions to ask to help stimulate thinking when developing your business strategy. First is, what infrastructure does your business have to implement to support the strategy? It is important to ensure you have the right people in the right positions to help achieve the results you have forecasted. Your team is essential in ensuring you have the team that supports your business strategy. What are your economics of the business? The importance of defining all your revenue streams, pricing, margins and costs to enable a clear picture of all incomings and outgoings. This helps you ascertain your break-even point. What sales volumes do you require to turn a profit? Budgeting is extremely important and measuring actual performance against budgeted numbers is key to understanding your numbers. Make sure you have projections in place to determine what sales are required to breakeven after you’ve covered expenses, make sure to include monthly breakdowns as well as yearly. How do you plan to grow your business? What revenue opportunities do you need to create for growth and do you have the capital required for expansion. 

It takes discipline to ensure you are reviewing, resetting and pivoting your strategy when necessary. Market trends and economic impact can be unpredictable, so, how will your business be set up to navigate through these times?