For your business to be successful, you must look to the future and think deeply about the opportunities presented by evolving trends. That is the key to identifying strategic advantage.
While this must be part of your business plan, execution strategies, and presentation to funding sources, it is easier said than done. Many business owners just get stuck in trying to spot what is the strategic advantage that is the best to pursue for their business.
So what is the answer to discovering the best growth path for your business?
How to Identify your Best Opportunities
When Wayne Gretzky was asked how he became the National Hockey League leading scorer, he said the trick was "skating to where the puck’s going to be, not where it is." By anticipating the players’ moves, he dynamically positioned himself to take the shot.
This is exactly what your business needs to do—dynamically position yourself to anticipate the market’s direction and competitors’ responses. That is one way strategic planning gives you an edge by focusing on where you need to be in the next year, three years, and up to five years in the future.
This requires effective research to maximize your potential for success.
Effective Research Equals Strategic Advantage
Many small businesses are intimidated by the strategic planning process, and therefore, do not try to implement it. In fact, strategic planning is a simple process that really focuses on three major issues:
- What do we do?
- For whom do we do it?
- How do we excel?
Strategic planning is important to the success of your business because it enables you to service your customers more effectively and gives you a leg up on the competition. And that provides you with the strategic advantage to grow more aggressively and become more profitable.
As part of your strategic planning process you need to be able to succinctly state your best opportunities in:
- Growing your current market segments
- Developing new market segments that are more profitable
- Expanding cross-selling, up-selling, and bundling of products/services
- Creating new products and services
- Increasing capacity and scaling
Strategic Advantage Facilitates Business Financing
If you expect to obtain a business loan or investment to help grow your business, it is essential to have a comprehensive strategic plan in place that includes a clear understanding of your strategic advantage in the current marketplace as well as forecasting that advantage in the next three to five years.
Remember that financing sources review scores of business plans and financial requests each day. They are very educated as to the trends in the industries they work with.
Don’t be surprised if lenders and investors ask you questions regarding trends, threats, and opportunities. They will be testing you to see if you are on top of what is happening in your market and, even more importantly, are you taking innovative steps to profit from the options available.
It is important that you base your company’s opportunities on accurate research. Funding sources want forecasts based on reasonable assumptions, including actual historical performance and future growth potential with your products and services, given the trends in the market.
Implementing an effective strategic planning process will put you in the driver’s seat and enable you to be an ideal client for a lender or investor.
Diane Weklar, the Authority on Accelerating Business Growth, is the CEO of the Weklar Business Institute. She is the author of the award winning book, Mastering the Money Maze: 10 Secrets to Winning Business Financing,which is also an Amazon #1 Best Seller. This book provides practical insight to build a successful business and the practical steps to raise capital to help your firm grow. She can be reached at Diane@Weklar.com.