Tuesday, May 22nd, 2018
Copia Wealth & Tax Limited based in Wolverhampton are not just Chartered Accountants, we also act as Business Advisors to many of our clients. One of our aims is to help our clients ensure their business reaches its full potential by helping them develop and implement an effective business strategy.
When thinking about developing a business strategy, academics and expensive business consultants tend to spring to mind. The good news is that creating a great business strategy doesn’t have to be a complex and expensive exercise. Going back to basics, a business strategy is what you need to get your business from where it is today to where you want it to be in, say, 5 years’ time. With that in mind, our approach involves four simple steps to creating an effective strategy for your business.
Some business risks can be mitigated, and some cannot. In the case of the latter, the business opportunity must always outweigh any potential downside. Following this, we recommend taking the time to create a risk register by listing all the major risks to your business and then, line by line, describing what the business is doing to mitigate each risk; e.g. for “Cyber Security Risk” you might note that you have put a firewall and internet security software in place on your systems. Creating and maintaining a risk register will ensure that, wherever possible you minimise business risk going forward.
To develop a successful strategy, you need to thoroughly understand the market in which your business operates; another area often neglected by business owners. Breaking that down, ask pertinent questions such as “How big is the market sector that you are targeting?”, “Is it growing and, if so, how fast?” and “Who are your competitors and how do you intend to compete with them for market share?”. Understanding key drivers in your market means you will be able to spot new opportunities, harness the forces that are driving change and create new products or services that are competitive.
Also, a thorough understanding of your market will enable you to create the right balance of supply and demand through better calibration of pricing and, ultimately, customer service levels.
Every business has strengths and weaknesses and a business strategy should take this into account. Take time to analyse your main competitors and identify their weaknesses to determine how your product or service offerings could gain competitive advantage. For example, if competitors are expensive, perhaps offer a lower price alternative. Conversely, maybe focus on a niche to create a differentiated offer. Either way, long lasting competitive advantage may result.
Using various tools, we help our clients develop a picture of what the business is going to look like in, say, 5 years’ time and what actions would need to be implemented to deliver that outcome. We then determine what needs to be done over the next 12 months to ensure the business stays on track to hit its five-year target. Furthermore, we identify concise key performance indicators that can be monitored to track progress which will then identify areas that need may to be addressed. This helps to ensure the five-year target is not just a piece of paper, but a living, growing business tool.
Developing a great business strategy does not need to be complicated or expensive and the team at Copia Wealth & Tax are here to support you throughout the process – call now on 01902 783172 to book a free, no obligation initial consultation or alternatively just click HERE to email us.