One of the first decisions you will make as a new small business owner is to determine your business strategy. Your business strategy will spell out your choices of inventory, your approach towards your business, and how you will steer the business. The success or failure of your start-up business will greatly depend on the strategy that you have decided on.
It should be noted, though, that the choice of your business strategy would depend on a number of factors. First, the characteristics of your particular industry will shape your strategy. One strategy may be acceptable (and even prove to be a winner) in one industry while it may not work in another industry. Second, your strategy will depend upon your own organization’s competencies (or if you are a solo entrepreneur, then your own), and how aligned they can be to a particular strategy.
Below are few strategies you can employ for your small business:
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Pioneer or Follower
You can choose to create your own products or simply offer products that are already available in the market.
As a pioneer, your strategy will be based on innovation. Innovation, however, can take on different meanings. It may mean adding more useful features to existing products, or coming out with first time products, or continually improving existing processes. Whatever your definition of innovation may be, this strategy will work if you have the resources, processes and values to support the creation of an innovative product.
As a follower, you will be venturing into a field where others have already trod. You may be jumping on a bandwagon or trend set by the key players of the field. As such, you will be perceived as a challenger. The question you need to answer is: how best can you enter a market that may be filled with more dominant players than you are? What is the level of competition in your market? Your success as a follower will depend on your level of resources, ability to innovate, and the dominant incumbent’s perceived product quality.
Broad or Niche Category
You can also choose to offer a little of everything or a lot of something to your customers.
One strategy would be to offer a broad range of products or services in a category, but limited items in a specific category. A business positioned as an online store for baby gift items may include a limited number of infant stimulation products, musical toys, clothing, baby care items, and baby gifts. The goal is to offer the best possible item for each category.
Other business owners, on the other hand, prefer to focus on one category and offer everything in that category. Instead of the more general baby gift item store, you may concentrate on baby safety items and provide a wide range of products under this very limited category. Niches have proven to be an effective strategy for small business owners with limited capital.
High-end or Low-end Products
You can also set your strategy by determining the perceived quality and brand of your items. You can choose to provide customers with a brand name product or service, or offer low-priced generic product. You can be the Wal-Mart of your industry or you can be a Neiman-Marcus. And how high or how low you get will depend on your resources, skills and capabilities, as well as the market that you want to reach.
Setting your business strategy requires a lot of thought and planning. It entails knowing your own strengths, and more importantly, your weaknesses in identifying what you can or cannot do.
Recommended Books on Business Strategy:
- Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant
- Playing to Win: How Strategy Really Works
- Good Strategy Bad Strategy: The Difference and Why It Matters
- Business Strategy: A Guide to Taking Your Business Forward (The Economist)
- Best Business Innovation Ideas in 2020
- How to Make Money Teaching Baby Sign Language
- How to Optimize Category Pages to Ensure the Success of your E-commerce Store
- What Works on the Web? 12 Lessons From Successful Home-based Online Entrepreneurs
- Top 10 Growing Markets for Small Businesses (Part 2)