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If you’re an entrepreneur, you probably understand all too well why many businesses fail to create a company strategy in the early days of their business. In that period, every day can feel like chaos. With hardly enough time to complete the bare minimum, how can business owners justify taking the time to kick around strategy ideas? Others fail to set a strategy out of fear, believing they might choose the wrong one or somehow box themselves in for years to come.
After leading a business for 20+ years and working with countless entrepreneurs, I can empathize with the reasoning in both scenarios. But, if you’re nodding your head to either, it’s time we talk. Your delay in developing a strategic direction is already costing you and will cost you more as time goes by.
Related: Why Combining Company Culture with Strategy is Necessary for Lasting Business Success
You need a company strategy — now
Your company strategy defines how you focus your resources to create a competitive advantage and win in the market. It’s never too early to set your strategy, and as we just covered, many — if not most — entrepreneurs wait way too long to form this crucial foundation of the business.
Here’s the good news: when your company is young, your strategy can be rough and flexible. In fact, it should be. Everything is fluid in the first few years of business, and if you’re too rigid, you’ll struggle to adapt when things change. By defining your strategy and then adjusting it as the market and other elements demand it, you’ll begin narrowing in on your niche.
Getting to your niche is essential to your success, and many entrepreneurs are surprised to learn it often takes around three years to nail it down. The best way to do so is by setting, revising and updating your strategy. It’s also critical to share that strategy (and perhaps co-create it) with your team so they can understand and execute your vision.
Related: The 5 Essentials for Aligning Your Budget With Your Business Strategy
Say no with clarity
Another part of getting to your niche as quickly as possible is saying no to the business you used to say yes to. Put another way, you need to be clear about who your ideal customers are and why you’re serving them. Anyone who doesn’t fit this criteria shouldn’t become a customer.
I understand the need to keep the lights on and meet payroll, so it’s not lost on me why entrepreneurs often take any and every client they can get. But this ultimately does your business a disservice. Not only does it detract from your mission, but it also likely means you’re working outside your area of expertise, so you won’t do your best work, which means you won’t get as many referrals… and on and on. The opportunity cost that comes with serving the wrong customer is high.
In my experience, working with a target client is ten times more valuable than working with somebody else. So, if you agree to take business that doesn’t fit your ideal clientele, recognize you’ll get a dime for every dollar you could get.
Related: How to Establish a Sustainable Corporate Strategy That’s Good for Business
Who and why
If you’re unsure who your target customer is and are feeling a bit wrong-footed as you read this, you especially need a company strategy. Creating it will help you align internally and determine who you serve best. Even more importantly? It will help you hone in on why you’re serving that customer.
You should take your time and be thoughtful about setting your strategy. Here are three main steps I recommend as you begin the process.
Step 1 – Establish the foundation of the company by articulating your company vision, which includes your:
- Purpose. A 5-15 word statement of why the company exists.
- Values. Comprise 3-7 prized characteristics that govern how your employees work.
- Mission. What the company will accomplish over the next three years — You can state this as “we will achieve 95% customer retention within three years,” followed by the quantitative success criteria you expect within the same timeframe.
Step 2 – Establish your Company Strategy by articulating your:
- Target Market, Positioning and Brand Promise — who you’re for and what you deliver.
- Competitive differentiation. The top three things that make you different and desirable.
- Core Competencies. The top 3-5 strengths you will focus on and leverage.
- Critical Issues. The top 3-5 issues you must solve to accomplish your mission.
- Goals. 3-year and annual goals, which you break down into quarters and months)
Step 3 – Establish your daily, weekly, monthly, quarterly, and annual operating rhythm in terms of meetings to help you execute the strategy and avoid wandering off course. This might include a cadence like this:
- Daily. Quick team check-in to remove obstacles and maintain momentum.
- Weekly. Team meeting to cover one or two big topics and check in on goal progress.
- Monthly. Half-day team meeting, cover big topics, check progress, course correct.
- Quarterly. One-day offsite, check annual progress, set quarterly goals and priorities.
- Annual. Two days offsite, check Mission progress, set yearly goals, and align everyone.
If you put off creating your company strategy, you’ll lack cohesion internally, say yes to the wrong customers, fail to give your team members a compass to guide them and, ultimately, fail. The repercussions of operating without a strategy are that drastic. So, even if you think you can’t carve out the time to lay this foundation, you must. It’s one of the most important things you can do for your business, team and yourself.
Related: The Strategy You Need to Make Sure Your Company Can Keep Up in Today’s Business World