Your Strategic Objective
The first step in a Business Development Programme is to define “What do you want from your life?”
The second step in a Business Development Programme is to define what your Business has to do for you to achieve your personal goals. Michael Gerber calls this your Strategic Objective. This is a description of what your business is going to look like when it is finished.
“Oh no, not more Goals!”
In a way, yes. But not in the manner you might expect. This is a thoughtful, intellectual and difficult decision-making exercise.
Yes, you should define such things as the ultimate size and profitability you are aiming at in say 5 to 10 years.
But, there are some fundamental, and interesting, questions you need to ask yourself before you can even begin the process of Business Development. These are questions that small business owners rarely ever address. If you can do this, you will set your business apart and end up way ahead of the competition. For example:
Are you competing on quality or price?
You need razor sharp clarity on this point, as it will determine the shape or your business.
Many small businesses exist in the awful zone of promising the highest quality at the lowest price – which is of course impossible to sustain unless you are happy with virtually zero profit for working 7 days a week.
This is a topic I’ll return to in a later Blog about Marketing Strategy, but for now here’s an example to ponder on.
Consider the business of car valeting.
Competing on price: The guys in the supermarket car park can clean your car for £20 or less.
Competing on quality: Gurcharn Sahota takes up to 250 hours to clean a vehicle with a selection of 100 cleaning fluids and wax that costs £8,200 per tub. His premier service includes polishing and buffing every inch of the car inside and out five times. He charges £7,200 for the valet which takes a month. (20 Jul 2010)
Both these car valeting businesses are viable. They are not competing with each other.
You need to be clear about your competition strategy and price accordingly.
What are your customers’ key frustrations?
List them. How will your company ensure that this never happens?
What is your commodity and what is your product?
The customer rarely buys what the business thinks it is selling.
People buy feelings.
Your Commodity is the thing/service your customer walks away with.
Your Product is what your customer feels as he walks away.
You don’t really have a business until you have defined your Product.
For example: “In the factory Revlon manufactures cosmetics, but in the store Revlon sells hope”
You can’t begin put together your Marketing Strategy, draft your website and business brochure, instruct your graphic designer, brief your employees etc until you have defined your product.
We have a template for defining your Product in our Business Development Manual.
Who is your customer?
Age, sex, education, profession, location etc etc.
Who buys and why do they buy? (Demographics and Psychographics)
And loads more – other standards to aim at
When will your business be completed?
Geographic location / coverage?
Retail. Wholesale. Combination?
Colour standards (What will it look like?)
List the key benchmarks you will need to hit in say
Now write your Strategic Objective
Distil all the notes you have made into a statement of 3 or 4 paragraphs. Congratulations, you now have your Strategic Objective
At this point it is worth reflecting on just how much is going to have to change in your business. Are you up for it? (You could do worse than read “Who Moved My Cheese” by Dr Spencer Johnson)
Is you Strategic Objective credible? You have to recognise that there is a difference between believing that something can happen and wishing that it will. Only you will know whether you believe in it.
If you believe in your Strategic Objective you will naturally start working towards your goal.
If you wish for your Strategic Objective, without believing it is possible, then you won’t take any action. Wishes generally don’t come true.
Our Business Development Manual is, in effect, a workbook which forces you to make decisions on the steps alluded to above so that you end up with a credible plan.
To sum up, the first 2 steps in a Business Development Programme are all about getting a clear view of the business you are going to build up and eventually sell, and the things you want to do with your life once your business has provided you with the funds you need to do those things.
Please get in touch if you need some help with your Business Development.