How to Build an Effective Business Strategy That Actually Gets Executed

What Is a Business Strategy?

Essentially, a business strategy is a plan of action to implement an enterprise’s vision and goals. Because businesses vary so widely in their operations and objectives, this strategy can take many forms.

It is important for every business to develop and implement its own strategies, as no two are alike. This will help with internal processes as well as external ones, such as acquiring funding, complying with regulations, and storing important data.

Why Would a Business Need a New Business Strategy?

Business strategies are most often associated with new businesses, but there are plenty of reasons why an established business owner would need to draft a new one.

There should never be a time when a business is not updating its strategy in some way, as it is always a work in progress. Trends change in marketing, business, finance, and within specific industries all the time. Business owners and executives need to keep up with those changes.

Getting Started

Before getting into the specifics, businesses need to clarify what type of company they are trying to build before they apply for a business loan, permit, or anything else.

Defining Mission, Values, and Vision

The first page of a business plan will display the company’s mission, values, and vision. Here, business owners have total control, so it is time to shape the company exactly as they want.

A clear vision, mission, and message are essential parts of branding. Developing a clear and recognizable brand identity offers plenty of benefits to a business, and the sooner this is developed, the better.

To understand how beneficial a clear brand identity is, consider a simple word experiment. Picture a white void with four colors: red, blue, yellow, and green. What brand comes to mind?

Most people would say Google. They have spent so much time solidifying their brand identity that a simple description reminds the average person of it.

It is not just giant companies either. There are thousands of makeup brands, rock climbing gyms, and other niche companies with specialized markets that benefit from the same instant recognition. Any company can achieve this with the right strategy, but it has to start early on.

Developing Products and Services

A business cannot meet demand without a supply. The easiest way to make sales is to have something good to sell.

By spending time developing the company’s products or services, a business can position itself best to make early sales and find what works.

While there are multiple approaches to product lines, the most common at the start are either to niche down or expand. For example, In-N-Out Burger offers only a few menu items, whereas McDonald’s offers dozens, but both are very successful in their own right.

Both strategies carry their own risks. If a business tries to offer 100 products or services and most don’t work out, it may have lost a lot of initial resources. However, if nobody likes a niche-down product or service, that is hard to recover from.

Proper market research and competitor research are certainly important to developing a proper supply. Whatever is favored, owners must choose wisely. From there, it is time to set reasonable prices relative to industry standards.

Defining Long-Term Goals

Both growth and financial goals are critical to understand well before launching a business. Once the owner understands the nature of their business, along with their products and prices, it is time to conduct market research and get a general idea of the business’s goals.

How much revenue should the business expect in the first six months? First two years? How is the business going to grow in the future? Answering these questions is crucial to a business strategy.

Acquiring Funding

No matter how successful a business is, changing strategies often requires capital. In many cases, that will require external funding for businesses to implement their strategies.

When an owner establishes a business plan, it needs to be solid for investors and financial overseers. Both lenders and investors need to see a strong business strategy to feel comfortable lending or investing.

Before launching a business, there needs to be a plan for acquiring funds. A lack of funding is the primary reason most businesses fail. Fortunately, there are plenty of ways to acquire these funds. A set amount needs to be identified first.

Crunch the Numbers

Before heading to a bank or looking for investments, businesses need to determine their budgets for the duration of their strategy. Add up all known expenses and account for the ones that are not yet visible. Plan for the worst and hope for the best.

For example, if a business needs thirty employees paid at a certain rate weekly, that cost should be factored in alongside equipment, rent, new locations or expansions, cleaning supplies, business and liability insurance, licensing and inspection fees, sales tax, and employee benefits where applicable.

Once all known expenses have been considered, always plan for the worst. Expect to pay on the high end for each cost and budget for unexpected expenses as well.

If operating costs for the next six months will total $100,000, plan for $120,000. Use cash on hand for as many expenses as possible, but it is not always enough.

1. Bank Loans

Business loans are the standard way to secure business funding, but they depend heavily on the owner’s personal credit history. Bank loans should be considered a form of self-funding, as the business owner is responsible for repaying that loan.

One major advantage of bank loans is that they are ideal for companies in need of new revenue: you know exactly how much you need to pay back. If you take out a loan for $100,000 at a 6% interest rate, you will pay $106,000 in return.

Contrary to investments, bank loans do not take equity from your business, allowing you to maintain full control if you rely primarily on loans. Once it is paid back, that equity is entirely yours.

However, bank loans are riskier for the business owner. If you do not pay them back, it could destroy your credit and, by extension, prospects for future business and personal loans. If you have poor credit, you may have a difficult time securing a loan at all.

You will often need to use collateral, especially for larger loans. Likely, this will be your house or the largest asset you own, so a failed business could be a significant personal loss.

2. Private Investors

Private investors are a strong option when you cannot get enough funding through loans or when you do not feel comfortable carrying that much debt. Investors can purchase equity in the business with cash for a mutually beneficial arrangement.

There is less personal risk when using investors to fund a business. A business owner will not destroy their credit rating or lose collateral if the business fails. Instead, it will simply be a loss for the investor.

The obvious downside of using investors is that they take equity from the business owner. As a business grows, you will owe them more when they decide to liquidate.

3. Crowdfunding

Crowdfunding is when you post your initial offering on a crowdfunding website, along with a detailed business plan, and small-time investors may choose to invest. Keep in mind, these are still private investments.

A major benefit of crowdfunding is its convenience and accessibility. If one investor says no, you do not have to continue looking for others. One post is all it takes.

However, similar to finding investors the traditional way, you will be exchanging equity for cash.

4. Incorporate

If the business really needs cash, the owner may consider incorporating the business, allowing for equity to be publicly traded. However, the initial public offering must comply with the SEC.

There comes a time when attracting private investors is no longer enough to stimulate growth. Incorporating is a major step for a business that can drive capital into the hands of companies in need from public investors.

In most cases, businesses will only incorporate once they have steady revenue and enough brand awareness to get on Wall Street’s radar. However, that is not always the case.

You will not have the same control over the business as you would with a sole proprietorship, but you will have easy access to potential investors, both large and small.

How to Build an Effective Marketing Strategy

After a lack of funding, a poor marketing strategy is the next most common reason businesses struggle to grow. Every business needs to develop an effective marketing strategy, one that is both effective in the short term and builds toward something greater for the long term.

If an owner lacks marketing experience, they may consider taking on marketing services or business consulting. They will have to sacrifice one of their most valuable resources: either their time or their money.

Build a Website

A business website needs to meet the standards of the time. A company’s website is easily the most valuable asset for growth, no matter the type of business.

No other asset affects advertising, organic traffic, email campaigns, social media activities, and every other tactic as much as a website. If a website is the center of a company’s marketing strategy, it needs to be designed properly.

With proper user experience design, a business will see higher conversion rates from ad campaigns and increased organic search traffic. The more that is put into it, the more you will get out.

Websites are also the best possible place to showcase a brand, including its mission, values, and aesthetics. Every page of the website should be on-message and on-brand.

Paid Ads

In terms of making short-term gains, there is nothing better than advertising. There are many great options to choose from, some of which offer a free boost to new users.

Target your ads as closely as possible. Initial market and competitor research is needed to prevent unintended waste in your campaigns. Use the right keywords and filters to maximize your ad’s efficiency and avoid losing money.

Set an advertising budget in advance and list it within your business strategy. Small businesses are typically advised to allocate between 7% and 8% of revenue to marketing, and advertisements will likely make up the bulk of that early on.

Use Free Marketing Tools

Social media and email marketing are free to get started and very effective for building brand awareness, driving traffic to your site, and retaining existing customers.

Both of these tools should be used to increase customer retention, as a 5% increase in customer retention leads to an average 25% increase in profits. It pays to keep your customers.

To build your email list, leave prompts throughout your website at the time of purchase, at the top or bottom of every page, or as pop-ups. It does not cost more to send an email to ten thousand people than to send to ten, so start growing your list as soon as possible.

To build a social media following, use organic options like hashtags, trends, and proper content timing. Comment on viral content, share user content, and run promotional content to help spread the word about your company.

Optimize These Tools

A plan for social media and email marketing should include proper timing and content creation. Marketing teams and planners should discuss, plan, and implement a schedule to time their content.

There are best times to post on social media and best times to reach someone via email. When businesses time their content correctly, they expand their reach for free.

Using the right templates, visual imagery, and trends will help expand your reach and improve the efficiency of a marketing campaign without spending an extra dollar.

Building Organic Traffic

With a little research and groundwork, organic content is a free marketing strategy that can drive traffic for years to come. The best way to do this is with a content marketing strategy focused on quality.

Once you have a quality website, the foundation is set. From there, you can build a blog, podcast, or any other type of content you want to promote. Do not just do it for Google. The only way to ensure long-term success for your content strategy is to promote quality content.

Use a healthy mixture of long-tail and short-tail keywords. Long-tail keywords will help you drive more incremental growth, but that growth will come sooner.

Your end goal should be to rank on the top page for relevant short-tail keywords, as these have the highest traffic but also the highest competition. A fitness center would use short-tail keywords like “gym” or “health club,” as well as long-tail keywords like “cycling classes in Providence, RI” or “personal training services near me.”

Using Proper Analytics Tools

Business owners need a way to track key metrics for their marketing campaigns so they can make adjustments as needed. For that, you need to use the right analytics tools.

Google Analytics is a great way to start, as it can measure key metrics on their website to determine how people land on their site, how long they stay, and how they interact with it. This insight will help business owners and marketers identify what is working and what is not, saving money in the long run.

Marketing Integration

One of the biggest mistakes business owners make is failing to integrate their marketing strategy. SEO, PPC, and other channels should not be viewed as separate categories, but rather as pieces of a much larger puzzle. Businesses large and small can benefit from integrating their marketing strategies to allow for maximum growth.

For example, if a business has a specific page they want to direct users to, using it as a landing page for PPC and email campaigns, sharing it on social media, and optimizing it for search engines will yield the best results.

Physical Marketing

For local businesses, especially, there are plenty of ways to use physical marketing to their advantage. Flyers, business cards, and word-of-mouth marketing are great ways to start.

Hosting events, affiliate marketing, getting listed on local directories, and any other type of marketing you can think of will go a long way. The best part of physical marketing for local businesses is that you can target the right people for little to no cost.

Another essential part of physical marketing is customer relations. Customers are a business’s best marketing tool, considering the effectiveness of word-of-mouth marketing. Improving a company’s customer experience will help grow customer base, but more importantly, retain existing customers.

Figure Out Staffing

Part of your strategy should involve improving your onboarding process, specifically involving both recruiting and training. Most businesses rely on their employees, who often play essential roles in business operations.

Whether full-time or part-time, with one job or 30, businesses need to determine how they intend to staff their operations.

Have a Recruiting Plan

Recruiting is a lot like marketing. There are many online job boards and freelance marketplaces to list jobs or gigs businesses have available, and most charge only a small fee.

Business owners must determine which positions need to be filled. Depending on the updated business strategy, a business may require significant new staffing.

From there, post available jobs. Highlight specific reasons why people will want to work with your company, including company culture, benefits packages, salary, time off, schedule, and mission.

Diligence is key with application screening. Take the time to thoroughly review resumes and applications, and only call qualified candidates. Once a business has consistent revenue, owners may begin taking chances on potential candidates, but not during the early days.

Properly Train Employees

Setting clear expectations with your employees upfront and providing proper training will ensure your daily business operations run at their best from the beginning.

It pays to continuously train your employees. Business owners should always seek to facilitate employee growth throughout their tenure, which all starts with proper training.

Training is also an ongoing process. Allocate funding for employee training and, if applicable, ongoing education, depending on your business.

Ongoing Evaluations

Performance evaluations are an excellent way to offer specific feedback to employees over time. When employees receive this individual attention, they are more likely to understand and retain the advice provided to them.

Once every six months or so, managers should sit down with employees and discuss their performance. Businesses should always keep a paper trail of these discussions and make notes afterward to follow up on the next evaluations.

How to Write a Business Plan

This knowledge will not go to much use without a written business plan. Planning in your head does not cut it. Not only do you want to write it out to show potential investors or lenders, but you also want to have an organized reference to return to as needed.

Have an Organizational System in Mind

There are plenty of important aspects of a business strategy that require attention. You need to develop a strong organizational system for your plan.

If you want a hard copy, get a binder with tabs and label each tab with the plan. Breaking sections into categories and subcategories is highly recommended. A “marketing strategy” category with “organic marketing” and “paid marketing” subcategories is one example.

If you intend to keep your business plan digital, use a program that allows proper organization. Either way, this will help investors and lenders review your strategy and make it far easier to use as a reference in the future.

Make Decisions Based on Facts

One of the biggest mistakes for business owners is operating on wants and dreams alone. A clear vision is critical to a business’s success, but it must be grounded in reality.

If a business is not generating any revenue, having faith that it soon will is not a concrete solution. The appropriate response is to accept that revenue needs stimulation and to work to address it immediately. Having a plan for that in the first place is the best solution.

Start With a Rough Draft

Structure your rough draft exactly how you want your business plan structured and fill in the blanks. Generally, start with an executive summary, which is the first page of the plan. Here, briefly summarize your enterprise’s vision, mission statement, and primary focus.

Next, list your business objectives and goals, both long-term and short-term. This is a good time to discuss funding, monetary goals, and how much money you intend to earn and spend.

After that, you will need sections on your business and management structure, products and services, marketing and sales plans, and financial projections and analysis.

Ask for Expert Help

If you are a first-time business owner, developing and implementing all of these strategies on your own can be overwhelming. Business consulting services can help you learn the ropes in as short a time as possible and help you develop your business plan. This is often the best way to set a business up for success, possibly before it is even launched.

Ongoing Performance Management

Once a business is launched, the work is not done. Business owners work hard, and ongoing performance management is what separates businesses that compound growth from businesses that plateau.

Analyze Performance

You cannot properly manage or change an existing strategy if you do not know how it is working. Continuously analyze financial statements, marketing strategies, and other key performance indicators to understand how to make appropriate adjustments over time.

Ask customers for feedback regularly. They are your most valuable asset when it comes to understanding business performance, so ask them to complete surveys or leave feedback, both online and in person.

Make Daily Processes More Efficient

Through proper process management, work to get the most out of your employees and day-to-day operations. The more efficient you make all of your business processes, the higher your profit margins will be.

Asking for employee feedback is a great way to generate ideas. They are the ones who experience the most inconveniences and challenges throughout daily operations.

For example, if a team of 3,000 employees experiences 10 minutes of interruptions each day, that is equivalent to losing 500 hours of work.

Consider Outside Help

Whether it is with your business strategy or the actual implementation, the business world is unforgiving. You can set yourself up for success with the right consulting services.

If you are uncertain which type of engagement is right for your situation, understanding the difference between strategy consulting and management consulting is the best place to start. The distinction determines whether you need someone to validate your direction or someone to rebuild the operating model that is supposed to execute it.

Build a Strategy Your Organization Can Execute

Strategic planning that produces a plan is the easy part. The hard part is building an operating infrastructure that can carry the plan through implementation, course correction, and the friction between what was designed in a conference room and what is actually possible inside the organization you have.

That gap between design and execution is where most business strategies fail. It is also where a fractional COO or business strategy consultant produces their highest value: not in the planning phase, but in aligning the operating system with the strategy the business has chosen.