Solopreneurs and owners of small businesses can benefit from what can be called a basic recipe consisting of time-tested business practices that will put you on the path to building a profitable enterprise that will make you proud.
Every business needs a strategy and a business plan is a very helpful tool that supports you as you implement your strategy to develop and launch your venture. A complex strategy or business plan aren’t necessary to achieve success. A one-page business strategy and a five-page business plan may do the job, as long as both are well thought out and executed.
A good business strategy (and plan) defines and drives the activities and behaviors of the entire organization. Without it, the business becomes a rudderless ship, lost at sea. A well-conceived business strategy and properly written business plan reflect and support the business model and always address marketing, operations, finance, staffing and customer service, at a minimum.
The business model is the plan for how your company will generate revenues and make a profit. The business model answers the questions “Who is the customer and what does that customer value?” As a result, your business model must also spell out the company’s value proposition and what differentiates your products and services from those of competitors.
The business model will keep company leaders focused on the core markets and measuring success as defined by the business strategy. Here you’ll detail a step-by-step action plan to operate profitably within your marketplace.
In order to develop a realistic and potentially effective marketing strategy, it is essential to thoroughly research the most likely target customers for the venture. What problem or goal will be solved with your products or services—what is the customer motive for doing business with you? How much will potential customers pay to obtain the solutions that your venture will offer?
Finding out which competitive products target customers use to get their needs met is another essential marketing research function. As well, you must learn the type of marketing and information gathering outreach that potential customers will find and respond to. An effective marketing strategy addresses how you will:
- Identify target customers
- Identify the products or services now used (competitive products)
- Describe how you will promote your products and services to those customers
- Explain the positioning strategy for products and services
- Discuss the branding strategy
- Describe the sales strategy
- Address the pricing strategy
- Identify advertising and social media marketing activities
The sales strategy that you adopt will depend on your target customers, your access to those customers and the competitive landscape. You may be able to build referral arrangements and strategic alliances that allow you to generate enough sales to be profitable. On the other hand, cold calling may be the most effective way to generate sales for your organization. The preferred selling approach a company uses is defined in its marketing plan.
Predictable, practical and streamlined business operations processes are a must. The customer experience is closely linked to what happens in the behind-the-scenes delivery systems of products and services. Think of it this way—when you go to your favorite breakfast place to get a muffin and coffee, you expect to receive what you’ve ordered with a minimum of fuss. That is how you start your day because it’s convenient and it makes you feel good. You, business owner and leader, must create a similar experience for your customers if you intend to retain them. Smooth business operations also play a role in building good word-of-mouth for your business. Fail to develop a good operations plan and things could blow up in your face as disappointed customers spread the word about your shortcomings.
Unfortunately, many businesses give short shrift to the operations section of their business plan. The purpose of thinking through operations processes is to increase business productivity and reduce costs as you offer the same (or better) outcomes to each customer, time and again. There may be some trial and error along the way, but most of all it takes thought and planning.
Successful businesses understand the need to continually improve business processes, to become more efficient and productive and even to respond to market changes faster, all the while providing excellent service to customers.
While technology is important, it needn’t be complex or costly to be effective. Up-to-date technology products enable upgrades within any number of segments of your company: product manufacture, delivery of services, inventory management, payment systems, sales and distribution, marketing functions, quality control and customer service.
A realistic financial plan is the cornerstone of building a profitable enterprise. Every business requires a financial roadmap and budget, along with the discipline to follow it. You must anticipate and plan for business start-up or expansion costs, projected sales and with a break-even analysis, project at what point in the future the business can be positioned to make a profit.
The financial plan ensures that the business owner understands the sources of business launch or expansion funding (will a bank loan or a partner be necessary?). A financial plan reminds owners where and how to spend money and it provides ways to measure progress, promote healthy cash-flow and warn of impending shortfalls.
Smart business leaders treat customers well, because they are aware that there can be no business without customers who make purchases that create revenue and lead to profits. Integrate customer service into your business practices and review those practices frequently to ensure that they are having the intended effect of facilitating customer satisfaction, repeat business and referrals.
Thanks for reading,
Image: Fragment of mural located in the Templo Mayor Museum in Mexico City, where thousands of artifacts excavated from the ruins of Tenochtitlan, capital of the Aztec Empire (and now known as Mexico City) are displayed.