How Business Strategy Affects Small Businesses. Entrepreneur MBA Podcast 3.3
Summary: Today Stephen Halasnik and his guest Kiesha King-Brown talk about business strategies that affect small businesses. For a small business, having a proper strategy is really what will help you take your business to the next level. If you are looking to grow and expand into a bigger business, it is imperative to know your business strategy. Having the proper business strategy for small business owners will impact your company by serving as a tool to help during any circumstance, while also providing agility and survival mechanisms. Business strategies help tackle priorities in the correct order while being proactive about any future issues. Stephen and Kiesha go through three main points regarding business strategy; knowing where you currently are, creating a future blueprint, and engaging in partnerships.
1. Know Your Starting Point
It can be overwhelming knowing at first knowing where to start. The easiest place is to do an analysis of the current state of the business. For example, you want to look at current management decisions, as these play an important role in how things are run. You want to also analyze new customers, how they are coming in, and any metrics related to your customer base.
Bringing in an outsider or third party for observation can be beneficial to receive unbiased feedback. On top of this, ask your current employees and customers to give you feedback on how they think things are going. Any small business strategy that is effective always knows its starting point. If your small business is already established and needs refinement, this same process applies.
This could mean looking at your demographics, current strategic management, knowing where the U.S. economy is at, analyzing current competencies and competitiveness, gathering information about the economies of scale, profit margins, pricing, social media, respondents, economic development, and any other factors that affect the business. All of these are determinants of how your business is going to perform in the future, so being able to analyze and change them will pay dividends later on.
2. Put Together A Blueprint
This is going to look different for each individual small business, but the basic outline will be the same. After you and your team complete step one, you will be able to put together a plan for success. Any business with an entrepreneurial spirit will be able to make changes and be flexible.
Changes should attract potential customers, improve financial performance, make changes to solve any current issues, etc. For example, during 2020, lots of retailers suffering from the impacts of Covid-19 made quick changes in order to improve their business economics. Some changes in business practices included reducing hours, implementing social distancing, making online shopping more accessible for customers, etc. For some businesses, maybe your current products(s) are not performing as expected and you want to integrate a new product in your blueprint.
3. Engage in Business Partnerships
Engaging in strategic partnerships or investors can propel your business forward in ways it wouldn’t be able to do otherwise. Business partnerships are a collaborative effort between a business that benefit both parties in one or more ways. For example, if you are the owner/manager looking for ways to increase revenue, business partnerships can increase referrals and generate new customers. These partnerships can also be a great marketing effort and are much faster than SEO, or any other type of marketing.
When times are hard financially for example during a recession, partnerships can increase cash flow, increase market shares, and take off some financial burden. On top of the financial incentive that business partnerships bring about, they can also create better work/life balance, and bring more information and knowledge into your business. Business partnerships can be long or short-term, depending on what each business wants to get out of the deal. Consider using LinkedIn to expand your network and find partnerships.
In addition to business partnerships, at a later point, you might want or need investors in your business. Having investors also can increase motivation and support you in accomplishing your larger goals at a faster pace. However, you should make sure the basic outline for your business is set up before rushing into any big decisions.
If financing is an issue for your small business, consider consulting the SBA (Small Business Administration), as they provide loans for small business owners who need help.
Have a Tangible Competitive Strategy
For many small business owners and small companies, it is a common trend that business strategies never make it from their mind onto a piece of paper. It’s not because they are lazy or unorganized, but rather because they know they are a small business. Compared to larger corporations, small businesses are closer to the bottom line and more hands-on. This can turn into them not thinking or feeling like they have enough time to set aside for strategy. For others, you may need to consider implementing business partnerships in order to take your business to the next level. If your small business is very skilled in your industry, having a partnership will help give you a competitive advantage and differentiation.
Business Performance Without Having a Business Strategy
For new businesses and startups, it is inevitable that roughly 50% of businesses don’t survive. However, having a business strategy will enable you to reduce your chances for failure, and increase your chances of success. Any business is never too small to prepare for a pivot in its business. Pivoting or shifting in terms of strategy can come in many forms, but one of the hardest and uncomfortable is forced change.
Change in any business strategy can be abrupt and trigger more issues in many aspects. However, having a business strategy will give your business the agility and stability it needs in order to be quick to adapt to any situation. Even if your business is in the middle of decision making, or still learning about the business, a strategy doesn’t have to be extremely complex or formal. Your strategy can even be a page long, and that is better than having nothing.
Whether it is business or marketing strategies, if something unforeseen happens you can shift without detriment to your business. For example, a recession has a major impact on your business, and having no plan to deal with one can cause major harm. Without any plan, the impacts can be so negative that your business might not even recover. With this being said, strategy leaves room to be flexible for “what if situations.”
About the Guest, King-Brown, Differentiated Consulting
Kiesha is a Sr. Consultant specializing in Strategy, Profitability, and Leadership Development Consulting for Small Business Owners.
Kiesha has an MBA in Management, BSBA in Marketing, and holds certifications in Consulting and Executive Coaching. She is the author of “Differentiated Leadership.”
Kiesha has saved business owners an average of six-figures and increased cash flow to allow them to invest their financials in areas that actually grow their business. She has helped small business owners gain clarity around where they are in the life cycle stages and provided a strategic blueprint to improve their sustainability and enable improved profit.
About The Host Stephen Halasnik, Financing Solutions
Stephen Halasnik is the host of the popular, The Entrepreneur MBA Podcast. The Entrepreneur MBA podcast’s purpose is to help small businesses get over the $10 million per year in revenue mark. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to small businesses and nonprofits
Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik has started and built 6 companies over 25+ years with 2 of those businesses making the Inc 500/5000 fastest-growing list. Mr. Halasnik is a best-selling Amazon author on business and regularly tweets about his ideas about growing a business. You can also find Mr. Halasnik on youtube talking about Entrepreneurship.
Mr. Halasnik loves small business. He lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.
About Financing Solutions
Financing Solutions small business financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.
Small businesses use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding)
Please feel free to fill out the no-obligation, 2-minute business line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.
Note: Financing Solutions donates 10% of its profits to various nonprofit charities